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New announcements reaffirm Federal Government’s commitment to community solar

Latest projections show continued growth of the industry, but growth in third-party programs must accelerate to meet these ambitious goals and technical potential

WASHINGTON — This month, two prominent federal organizations released reports reaffirming the technical potential and commitment to community solar as part of an all-of-the-above renewable energy strategy.

Last week, the National Renewable Energy Laboratory (NREL) released a seminal report that estimates the technical potential of community solar and found it could reach nearly one terawatt of capacity, enough energy to serve more than 53 million households and more than 300,000 businesses in the U.S. that cannot access rooftop solar.

According to the report, “if all technically viable potential community solar is deployed, it could save customers billions of dollars on their electricity bills, serve tens of millions of LMI households, generate billions of dollars in grid resilience and grid service values, drive billions of dollars of economic benefits into host communities, and support hundreds of thousands of jobs.”

Also in February at its annual summit, the U.S. Department of Energy’s (DOE) National Community Solar Partnership (NCSP) challenged the community solar industry to meet a target of 20 gigawatts (GW) of community solar by 2025, enough energy to power 5 million households and create $1 billion in energy savings for subscribers.

To meet these ambitious goals, policymakers, regulators, and stakeholders from across the country must work together — and quickly — to enable third-party community solar programs, by far the largest source of community solar deployed on the grid today.

“These announcements further demonstrate the immense potential of community solar and its ability to build a more equitable, affordable, and modern electric grid while harnessing both small and large resources to reach our goals,” said Jeff Cramer, CEO of Coalition for Community Solar Access (CCSA). “The community solar industry and billions in private capital stand ready to build capacity right now to meet this potential. But to unlock the tremendous promise that community solar holds, we need state policymakers to open new markets and expand existing ones.”

The industry is making progress as Wood Mackenzie’s most recent market outlook shows US community solar installed capacity is expected to break 14 GWdc by 2028. Annual installation volumes landed around 1 GWdc for the third consecutive year in 2023, and 8% average annual growth is expected through 2028. To meet the goals set by the Federal Government and the industry, however, more enabling state legislation must be passed and utilities need to view third-party developers as partners in deploying clean energy, not opposition.

Perhaps most significantly, community solar capacity serving residential customers is increasing rapidly, highlighting an important shift in focus for the industry. The share of community solar serving LMI subscribers has grown from 2% in H2 2022 to 10% in H2 2023, with the cost to subscribe LMI customers declining 30% year-over-year.

NREL’s report found that achieving 20 GW of community solar capacity by 2025 is projected to yield substantial benefits, including:

  • Electricity Cost Savings: Community solar could reduce subscriber electricity costs by approximately $110 million to $330 million per year.
  • LMI Household Service: The deployment could serve 210,000 to 630,000 LMI households.
  • Grid Resiliency and Service Value: It could generate $50 million to $160 million per year in grid resiliency and service value.
  • Economic Benefits to Host Communities: The economic benefits driven into host communities could range from $20 million to $160 million per year.
  • Job Support: The deployment is estimated to support around 7,000 permanent jobs.

Over the past decade, the number of states that have enacted policies to support third-party shared or community solar has expanded from just a few to 18 states, including Washington, D.C. A collective 6.6 gigawatts (GW) of generation capacity has been installed to date.