Nederland to Apply for Highly Anticipated Community Solar Garden

Nicki Handy, Nederland

The Nederland Community Solar Garden Project takes a big step forward in the upcoming months as it applies for its official Community Solar Garden status with XCEL Energy. Forest clearings have been allocated for the project and Solar Gardener Greg Ching along with the Solar Panel Hosting Company will assist the community in deciding on a business model and implementing the installation of the array. After three years of organizing, starting with the Nederland Renewable Energy Project, which has contributed $1000 toward the project, Nederland may see some exciting progress in the coming months.

Local resident Kayla Evans, who contributed much of the initial vision for the Solar Garden project, has provided a host site. Nederland will likely begin with a .5 acre/50 kW garden up to a 5 acre/500 kW garden depending on how much XCEL approves and how much investment materializes. XCEL only accepts applications annually and only rewards 6 MW, only 3 of which will be allocated to the smaller CSGs. The site is located on sparsely treed forest area not visible from homes or roads, adjacent to the town’s water treatment land where an existing distribution line crosses the land. The Solar Garden project may eventually grow to cover up naked rooftops and asphalt but XCEL will offer far fewer awards than applications in the very competitive process, so the plan will have to develop further in the future.

In 2010, Colorado initiated legislation to allow groups to share the same benefits as individuals from using solar panels. Governor Ritter signed the Community Solar Gardens Act, which established a Community Solar Garden (CSG) as a community-owned solar array with 10 or more grid-connected subscribers, which may include individuals, companies, or a municipality. The minimum subscription size is 1 kW and the system size should be limited to 2 MW or less. No subscriber should own more than 40% of the solar shares and subscribers may be compensated for no more than 120% of their consumption. At least 5% of community solar garden capacity must be reserved for individuals or families at or below 185% of the poverty line. (Nederland hopes to reach closer to 40% in their system.) Renters and homeowners with inappropriate sun access or funding are now able to benefit from the tax credits and incentives that homeowners who have installed their own panels have enjoyed in the past. All XCEL customers currently pay into a rebate program which has historically only rewarded the owners of solar panels.
Although legislation has now been in place since 2010, XCEL has been slow to release their rules and guidelines along with Colorado’s Public Utility Commission (PUC). In an informal hallway session a few weeks ago, XCEL discussed their preparations for their Solar Gardens’ program at the Colorado Solar Energy Industries Association (COSEIA) conference. They also recently sent out an email notifying the solar industry and community enthusiasts throughout Colorado that the program was in its “refinement phase” and that they were testing the application software.  The Colorado PUC has yet to rule on XCEL’s 2012 Renewable Energy Standard Compliance Plan, which is necessary before the program can be implemented.  The process has been slow and citizens and industry alike are gearing up with eagerness to move to the next step, which will be the application process once it is fully established in the coming few months.
Communities who wish to implement a Solar Garden in the Boulder area will likely partner with a group called the Solar Panel Hosting Company which provides a comprehensive package to help groups coordinate planning, finance, construction, operations and maintenance, and subscriber management. The non-profit Solar Gardens Institute in Westminster provides public education and training to local leaders and volunteers. (They provide their services to any solar gardener, irrespective of location. In fact, they are training communities in California and working on a similar law in the California Assembly, SB 842). A CSG typically consists of a host, investors or anchor subscribers, a group of subscribers, and a utility like XCEL. The host site in Nederland happens to be forest land, but it could also have been located on a school, a church, or a community center. The host generally enjoys the benefit of discounted electricity from the CSG organization. The business model is yet to be determined but the Solar Gardens Institute has outlined a number of options that are likely to benefit the community and exist within the guidelines to be provided by XCEL and PUC.

Once a permit is granted to proceed with the SCG, the recipient will decide on funding and form a subscriber organization, which is an LLC or a cooperative that will manage the Solar Garden and its subscriptions. The Solar Panel Hosting Company has developed two plans that generally suit the purposes of these groups: the Solar Savings Now Plan and the Community Power Plan. In the Solar Savings Now Plan, arrays are funded through a power purchase agreement predominantly by a third party investor so that subscribers may receive the benefits more quickly without up-front payment. Subscribers would receive 5-10% off their electric bills. In a Community Power Plan, , crowd funding will finance the arrays, which means a small group of investors within the community invest upfront in their own panels and perhaps panels for low or mid-income subscribers to purchase over time. In this system, a kilowatt would cost $2000-$2500 and subscribers would receive a monthly credit for the life of the panels. Crowd funding requires compliance with federal and state securities laws and qualification for tax benefits.
Greg Ching, Nederland’s Solar Gardener who also works with both Solar Panel Hosting and the Solar Gardens Institute, has prioritized the inclusion of low income groups in Nederland’s Solar Garden project. He has worked closely with lawmakers as well as the Nederland community for three years and is credited with inspiring the Colorado Community Solar Gardens Act by State Representative Claire Levy. He believes the best way to move forward is to develop a business entity for the subscriber organization that will allow for investment from a third party and invite lower income groups into the fold right away. Anyone who currently uses XCEL can apply to be a subscriber, whether they live in Nederland, Boulder County, or Gilpin County. He hopes for 40% low income subscribers even though the law in Colorado requires only 5%. An initial third party investor may find it beneficial to receive accelerated depreciation and tax credits then flip the ownership after 6 years to the subscriber organization, which would assume ownership. A local non-profit would be a great initial investor if they wanted to eventually own the CSG with future revenue stream. A town, municipality or company could also become an anchor subscriber, buying up to 40% of the power and selling it to other subscribers. There are many possibilities for designing the business model to support the Solar Garden so it’s critical that everyone interested be involved in this decision making, which should commence as soon as the rule making is complete. Greg will speak to the community in Nederland on Thursday, March 22nd at 7.pm. at the Nederland Library and at the Nederland Community Center on March 29th at 7 p.m. where he welcomes both individuals and businesses to participate. He will also speak to Nederland Seniors on February 29th and the Peak to Peak Rotary in Gilpin County on March 1st.
Interested subscribers should sign up at http://www.solargardens.org/colorado/nederland-solar-garden/

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