Community solar market expected to grow by at least 7 GW by 2027

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The US community solar market will continue to grow over the next five years, growing at least 7 GWDC from community solar is expected to come online in existing markets between 2022-2027.

New program guidance for community solar programs in existing markets and potential new community solar markets will deliver significant growth for the U.S. community solar market, according to new research released today by Wood Mackenzie, a Verisk company, in collaboration with the Coalition for Community Solar Access (CCSA).

Wood Mackenzie has increased its forecast for 2022-2026 by 477 MWDCan 11% increase from previous forecasts and extended the outlook through 2027. This increase is due to the addition of new community solar markets, such as New Mexico and Delaware, and adjustments to existing state forecasts as state-level programs expand and regulations update .

Illinois and New York are responsible for the largest state-level changes in the forecast. New York is expected to remain the leading community solar market, with 1.3 GWDC will be online between 2022-2027.

“The community solar industry is a growing solar segment in the US, with several proposed new programs pending state legislature. As of the start of Q2 2022, 4.4 GWDC installed nationally and we expect to see more growth over the next five years as legacy markets expand their community solar programs and new states adopt community solar programs,” said Rachel Goldstein, US Solar Research Analyst for Wood Mackenzie.

“There continue to be significant tailwinds for the community solar industry as lawmakers in existing and new states view community solar as a way to achieve energy policy goals,” said Jeff Cramer, CEO of CCSA. “The numbers released by Wood Mackenzie represent a conservative prediction of what’s in the pipeline in the coming years. We call on all federal and state policy makers to help break down barriers and drive community solar deployment to lower energy costs and help more people access these programs.”

In this report, Wood Mackenzie and CCSA collected customer acquisition cost data for the U.S. community solar market and found that the cost of acquiring large customers per watt is lower, but more variable, than the cost of acquisition for residential customers.

“Customer acquisition data shows that cost per customer is inversely proportional to cost per kilowatt subscribed. Anchor tenants such as municipal or large commercial clients are expensive to acquire, but subscribe to a large portion of the projects, so the cost per kilowatt is lower,” Goldstein said.

Data from surveys on the cost of acquiring low- and middle-income customers (LMI) is limited, but shows that these costs are slightly higher than for non-LMI customers. Developers report that directly billed LMI customers can be significantly more difficult and expensive to subscribe than retail customers.

The report’s findings also found that solar and community storage can provide grid flexibility, but regulatory models currently fail to recognize how these projects can manage the load.

“As community sun becomes an increasing share of non-residential projects, developers face high grid upgrade costs to manage this new load on the distribution side of the grid. Community solar-plus-storage could help manage this load and provide network flexibility, but so far its scope has been limited to a few states, and current rules don’t necessarily value storage because of the network’s resilience,” Goldstein said. .

Massachusetts now requires SMART-qualified facilities above 500 kW to be co-located with storage, while New York’s Value of Distributed Energy Resources (VDER) offers financial incentives for co-location of community solar with storage.

New California regulatory proposals could help the state deal with new grid metering rules while delivering financial benefits to community solar and storage projects.

Right now, community solar is taking root in a third of the states. The Biden administration wants community solar to reach 5 million homes by 2025 and deliver $1 billion in energy bill savings.

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