A single sentence in the RCA’s Community Solar Regulations breaks the whole thing
We have until May 30 to comment
I’ve written about rooftop solar a number of times here. Community solar is rooftop solar’s cousin. It’s basically a way for people who can’t put solar panels on their houses (because they’re renters, live in the trees, or don’t have the up-front cash) to be part of a similar structure. A developer or a utility builds a small solar farm, people subscribe to be allocated a portion of its energy production, and then that energy production gets deducted from a bill, as if the panels were on the subscriber’s house. A large part of the rationale for community solar is that it’s easier for lower income people to participate.
Last year, the legislature passed the SAVE Act (Saving Alaskans Money with Voluntary Community Energy, SB 152), which allows community solar farms to exist. But basically nothing about how they should exist was written into the bill -- it was all pushed to the RCA to create regulations.
And hidden in those draft regulations, in the definition of a community energy facility, is this sentence:
The capacity of the community energy facility shall not exceed ten percent of the energy requirements of the subscribers.
This requirement is unmeasurable, and to the extent you can determine it, is far too tiny to be useful, especially for the low-income households that community solar is meant for.
The first problem is that the sentence doesn’t make sense. Capacity is the maximum amount of energy a power plant can produce at once; measured in kilowatts. Energy is how much energy you use over time; measured in kilowatt hours. This is undefinable, since those units can’t be compared directly.
However, it seems reasonable to assume that they mean the energy produced by the facility across the year shouldn’t be more than 10% of what the subscribers use in a year. This is also problematic to define. Energy production and use both vary. You can model energy production, but what about energy use? Do you use an individual consumer’s past energy use? Over what period? What if they’re a new customer? Or buy an electric car? Or their kids move out and go to college? Will a facility dip in and out of compliance as their consumers’ behavior changes?
Most importantly, 10% is tiny. For an average Railbelt household, 10% of energy consumption is equal to $10-$16 dollars on a monthly bill. If each person is only allowed to subscribe to enough panels to equal 10% of their energy, then all they can get is around $13 in credits. Since they will have to pay something for the subscription (this is how the solar panels get paid for), the most they could save would probably be a few dollars per month.
If a developer wanted to build a 1 megawatt solar farm, they’d have to find nearly 1500 households willing to subscribe, all of whom were willing to go through the trouble of signing up to see their bills basically unchanged. And there are costs to administer those subscriptions. Who would ever do that?
People with rooftop solar usually have systems around 7 times this size. Chugach’s community solar project (which got RCA approval before the community solar bill was passed) allows people to subscribe to enough panels to get 13 times more energy than this would allow them to.
Is there an alternative to selling a lot of mostly useless tiny subscriptions? The only one I can see is selling some extremely useless subscriptions to allow you to size up the other ones. The provision does say that it’s the aggregate 10% that’s important, not the individual 10%. So, I suppose you could beg a large consumer like a refinery or a mine to subscribe to a panel or two, which would instantly jump the allowed capacity to a level that would allow it to be useful for everyone else. But that seems crazy.
This provision is especially bad for the lower income people community solar is intended for. Since it costs money for a developer to administer a subscription, it makes sense to try and sign up the biggest consumers possible -- those where 10% of their energy use is a big number. Low income families often live in small spaces and use significantly less electricity than average.
The RCA should just delete that line. The regulations have other provisions that allow the utilities to set the maximum allowed capacity of community solar farms, and define that these facilities are supposed to produce within subscribers’ needs, and that excess unsubscribed power should be compensated at a utility’s avoided cost. Therefore, there are already plenty of guardrails to make sure this isn’t creating a backdoor way for developers to build utility scale power plants and get a rate intended for consumers.
Smaller Problems:
That one sentence is the only thing that renders the whole program useless, but there are other things I’d change. The utilities can set the maximum size of facilities, but there aren’t any limits on the number they can choose. It makes sense to let different sized utilities decide whether they want say, 1 or 2 megawatts as a limit, but it makes no sense to allow them to kill the program in their tariff by setting a 1 kilowatt size. Also, all the language about bill credits and excess power mirrors the current language on monthly net metering for rooftop solar. This makes sense now, but there is a bill that might change that to annual net metering. If that happens, the community solar rules should change to match, rather than having two different credit frameworks. It should be defined as working equivalently to net metering, so they can switch, or not, together.
To comment, go through this form, or email the RCA at rca.mail@alaska.gov, and reference docket number R-24-004.