I joined a community solar program, now what?
So you have signed a contract to receive power from a community solar program. Congratulations! This is a decision that comes with great benefits to both the environment and your wallet. Now it is time to take a closer look at your monthly electric bill to make sure that you are maximizing your benefits.
Fully understand your program and your bill
Your solar energy credit will show up differently depending on who your utility provider is and what type of project you have subscribed to.
In Colorado, there are three types of incentive models for community solar: a utility bill credit, a Renewable Energy Credit, and a one-time lump sum. In the utility bill credit model, your bill will show a credit correlated to the dollar value of your share of solar production. This model is the most typical and will be the focus of this blog.
There are also two models for payment with community solar: purchasing your panels outright or paying-as-you-go for energy produced. The pay-as-you-go model is similar to your monthly cell phone plan---you will never own the panels, you will pay for their energy like a service.
If you are partaking in a pay-as-you-go plan, in addition to your monthly electric bill, you should also receive a monthly bill from your solar developer. Generally, this bill should be for a lesser sum than your utility bill credit, leading to a net savings. If you paid for your solar array up front, you will not receive a bill from the developer.
Ask the right questions when looking at your bill
It is important that you thoroughly examine your energy bill after you sign up for community solar. You will want to make sure your panels are producing as expected, check that you are being compensated for production, keep an eye on utility rates, and confirm that you are making the most of all incentives (both financial and environmental) offered to you. Some specific questions you will want to ask:
1. Do my bill credits look right?
Your electricity savings will be influenced by a variety of factors (e.g. solar panel production, electricity use, base rate, and utility rates) and your utility bill costs may not be offset 100% by your solar program. Bill credits will cover a portion of your utility rate. In other words, if solar energy offsets 100% of consumption, bill credits could offset costs by 50% to 80%. While in the short term your savings will vary, over time a majority of your costs could be offset. With this in mind, it is important to keep tabs on whether your panels are under- or over-producing.
2. Are my panels under-producing?
If your bill credits look too low you should call your utility and solar developer (your utility can help with billing issues, but the solar developer is better for production questions). If the panels are indeed under-producing, you will need to problem solve together. Most are very happy to help!
Your first step will be to figure out why the array is under-producing. Weather, panel degradation, and broken parts are all possible explanations. Once you have identified the issue, ask your solar developer what they can do to fix it. They can’t do anything about the weather but ongoing monitoring, maintenance, and repair are their responsibility. They have a budget for this that is set aside from funds used to initially build the project and/or revenue from the array.
Comprehensive insurance is also typically covered by what you have paid for your panels to cover events like theft, hail damage, or low production due to weather. Further, some contracts specifically state that the developer guarantees that they will catch any abnormalities very quickly (typically within 24 to 48 hours) and ensure that arrays are performing as expected.
3. Am I over-producing? If I am over-producing, am I receiving roll over credits?
When you signed up for your solar program, you were likely given the option to purchase a maximum of 120% of your average energy consumption. Thus, it is possible that your panels will produce more energy than you use in a particular month. With community solar, when you don’t use that extra 20%, you are still generating bill credits.
Your contract may guarantee that excess production “rolls over” to cloudier months when you under produce. If your contract has this clause and it doesn’t look like your production has rolled over, call your utility provider or solar developer.
Any bill credits accumulated at the end of the contract period may also simply go away. It is best to appropriately size the system so that you are not left with an excess of bill credits after the contract period is over.
If you find that you are consistently over-producing due to efficiency or a move to a new home, it is sometimes possible to resize your subscription with your solar developer or apply your subscription to an alternate location.
4. How are utility rates changing?
The pace at which your utility rate increases from year to year can be very important in determining your savings from community solar. For most people, a high increase in electricity prices is unfavorable. For a community solar participant, an increase in electricity prices may be favorable. This is because one of the major financial incentives of community solar is that bill credits follow the rate of increase or decrease of utility rates. The higher your electricity rate is, the more bill credits you will receive and, over time, more bill credits means more savings. If your electricity rate is low, you will pay less for your electricity consumption, but you will also realize fewer bill credits and less long-term cost savings.
If you want to take a big picture look at your projected savings over time, the Clean Energy Resource Teams provides a calculator that allows you to compare price scenarios.
5. Are there tax incentives available to me?
Federal tax credits generally go to the company that developed your community solar project, however, it is worth checking with your solar developer to be sure.
6. Are there other financial incentives available to me?
It is also worth talking to your solar developer to ensure that you’re making use of all available financial incentives in your state, the Database of State Incentives for Renewables & Efficiency or your local utility can help guide your conversation.
7. What is happening to my Renewable Energy Credits?
You may have heard of Renewable Energy Credits (RECs). A REC is the legal representation of the environmental benefits of producing one Megawatt-hour of renewable energy. Typically the utility company will own the RECs (and therefore the environmental benefits) associated with community solar.
Community solar offers unique financial and environmental benefits and is simpler and more flexible than rooftop solar in many ways. Depending on the future of electricity prices and the length of the contract term, the long-term value of community solar can amount to thousands to hundreds of thousands of dollars. We hope this list of questions to ask while examining your energy bills under a community solar program helps you make the most of your solar program.
We are always available to help you wade through the world of community solar and RECs. Feel free to reach out anytime to our team at firstname.lastname@example.org, email@example.com, or firstname.lastname@example.org