Published on February 27th, 2018 | by Joshua S Hill0
Community-Scale Solar Fastest Growing US Solar Segment As Barriers Fall
February 27th, 2018 by Joshua S Hill
As barriers to begin to fall, the community-scale solar segment in the United States has shown itself to be the fastest growing segment, thanks to a 40% decline in the levelized cost of energy for these systems over the last two years.
These are the key points from a new Rocky Mountain Institute (RMI) report published this week, but despite significant momentum, the report is careful to highlight that institutional barriers remain and are inhibiting overall growth.
The new RMI report, Progress and Potential for Community-Scale Solar, highlights the impressive growth of the US community-scale solar segment over the past few years, but also offers new approaches that the authors believe will help drive further development in the sector and increase buyer adoption.
The community-scale solar (CSS) segment has grown so fast that it now exceeds other segments such as rooftop solar and utility-scale — as highlighted in a December report published by GTM Research and the US Solar Energy Industries Association (SEIA). Specifically, community solar has boosted non-residential numbers with strong quarterly growth.
The new RMI report is based on its work supporting cooperative solar procurement in Colorado, New Mexico, and Texas, and focuses primarily on community-scale solar for rural electric cooperatives. RMI currently believes that the segment currently sits in an “economic sweet spot” in the solar market and represents a tremendous economic opportunity worth as much as $30 billion. Specifically, according to RMI, community-scale solar systems are large enough (between 0.5 MW (megawatts) and 5 MW) to access low costs through economies of scale, but small enough to efficiently interconnect into distribution systems.
“In demonstrating the ability to already today deliver clean energy at or below 5 cents per kilowatt-hour on the distribution grid, CSS can be the ‘killer app’ for cooperatives, supplying a cost-competitive, locally sourced, clean energy resource that also provides resilience benefits to their members,” said Thomas Koch Blank, a principal at RMI. “Seizing on the additional cost-reduction pathways we identify will help ensure buyers access to the best CSS offerings and their range of benefits.”
According to the report, community-scale solar has seen its levelized cost of energy (LCoE) drop 40% in two years, and now rests at or below $50 per MWh across several parts of the United States. As such, CCS is now more cost-effective than purchasing energy from central power plants for many electric distribution utilities.
There still remain barriers, however, including “high interconnection and development costs, lack of trust, and strategic alignment, as well as gaps in staff capacity and sufficient policy support.” These barriers are therefore inhibiting utilities from engaging fully with the technology.