Analysis from the Washington Urban Infrastructure Lab finds that a community solar program similar to New York or Minnesota could create thousands of jobs and over a billion dollars in economic impact.
Under a community solar program, a third-party, neither the utility company nor the homeowner, owns a solar asset, and a homeowner or business is given access to subscribe to the solar energy output of the asset through their utility.
A report from the Washington Urban Infrastructure Lab assessed the potential economic impact of establishing a more robust community solar program in Washington state.
The report said corporate-owned community solar systems increasingly fill a neglected niche in the market for systems sized between 100 kW and 5 MW. It also enables dual uses of land, such as the co-location of agriculture and solar production, or the development of solar on a reclaimed brownfield site.
The report modeled a ten-year economic impact, following a “business-as-usual” 60 MW growth, a “modest policy changes” scenario leading to 220 MW of growth, and a policy and incentive structure like that of New York, resulting in 500 MW of community solar installations over the next ten years. The highest of the three scenarios would represent about a 2% growth of the residential electricity market in Washington.
Washington state currently limits community solar certification for incentive payments to systems with a direct current nameplate capacity of no more than 1 MW. The report recommended that this cap is raised to 5 MW to achieve greater economies of scale and lower electricity costs. In 2018, for example, New York state raised its community solar project cap from 2 MW to 5 MW, and annual installations exploded from about 10 MW in 2018 to over 180 MW in 2019.
Furthermore, the report recommends forming a program that creates long-term incentive structures, like NYSERDA’s NY-Sun MW Block structure. It also recommends improved bill transparency for customers, standardization of interconnection cost sharing structures, and high levels of community engagement during site selection processes.
Based on a business-as-usual policy scenario, 60 MW of community solar is forecasted over the next 10 years, creating 200 jobs annually, generating $148 million in labor income and $214 million in gross state product (GSP).
In the modest policy scenario, 220 MW of community solar could reach 733 jobs annually, generating $544 million in labor income, and $784 million in GSP.
Finally, if the state were to implement a program in-line with top community solar states such as New York, Minnesota, Massachusetts and Illinois, 500 MW of community solar could be built over the next five years. The report said this would lead to 1,652 new jobs annually, generating $1.23 billion in labor income and adding an estimated $1.76 billion to GSP. Additionally, such development could yield $74.9 million in state tax revenues and provide $4.66 million in lease payments to farmers and rural landowners.
The report noted that in addition to these economic benefits, community solar subscribers typically save about 10% to 15% on their electricity bills, with low-income customers saving up to 20%.
“There is a latent demand in Washington state for community solar, including corporate-owned community solar, that may be prompted by enabling legislation,” the report concluded. “Developers surveyed and existing studies refer to legislative and policy barriers—such as a lack of consolidated billing with itemized community solar subscription expenses and credits, the need for robust credit rates, the presence of restrictive program caps, and inconsistent siting and permitting guidelines. Under existing systems in Washington state, separate bills made it complex for consumers to understand and navigate the benefits of community solar.”
Find the economic analysis and methodology here.
