Realizing a future powered by clean cost-effective renewable energy will require more than just the expanded deployment of utility-scale solar and wind projects. It will require a broad adoption of clean energy solutions at all scales. In particular, it will be critical that individual energy users have widespread access to more sustainable energy supply options. Common Energy is one of the nation’s leading providers of community solar energy, an increasingly popular option that democratizes access to clean energy. The mission of Common Energy is twofold: To accelerate clean energy adoption, and to inspire the public to make cost-effective low emission energy choices. We are excited to announce our recent investment in Common Energy and to partner with the team in helping accelerate adoption and broaden access to clean and cost-effective solar power for everyone.
Community Solar 101
Growing consumer awareness regarding accelerating climate change and the need to move away from a reliance on fossil energy sources is resulting in consumers increasingly looking for more sustainable energy options, with solar power being a particular focus. A recent survey conducted by Rocket Homes, a national platform for homebuyers, found that 66.5 percent of people who don’t have solar on their homes are interested in installing them. But owning or leasing a home solar panel system is just not an option for everyone. Constraints on residential solar access can include not owning your home, living in an apartment, having lower quality credit or living in a state that does not have net energy metering policies (a billing system that credits solar energy system owners for the electricity they add to the grid). Indeed, even if these are not barriers for a customer, their rooftop might just not be suitable for a solar installation. An April 2015 report from the National Renewable Energy Laboratory estimated that at least 49 percent of houses are unable to host a 1.5kW PV system because of roof size, orientation or shading. With all these constraints, 77 percent of US residential households are likely ineligible for rooftop installations, according to Greentech Media’s US Community Solar Market Outlook, 2015-2020 report. As a result, utility customers are looking for other cost-effective ways to incorporate solar energy.
The community solar model, born out of the need to address the financial and logistical barriers inherent to rooftop solar access, enables anyone to support clean energy while saving on their electricity bill, without the need to install their own rooftop solar system. Community solar programs are passed through state legislation and enable energy customers to “subscribe” to a portion of the output from a solar project located in their utility service territory. They then receive a credit for electricity generated by their share of the community solar project on their electricity bill. The projects in turn generate clean energy that flows to the power grid, thereby lowering emissions in the community.
Community solar allows utilities to expand their energy offerings while giving more customers the chance to support new, local solar projects. And by detaching consumer consumption from asset installation, community solar is able to dramatically accelerate clean energy adoption. For these reasons, community solar is becoming an important growth opportunity for distributed solar resources. In 2010, only 2 shared solar projects existed. According to the National Renewable Energy Laboratory, as of December 2021, there are over 2,000 community solar projects in 41 states, plus Washington, D.C., representing more than 5,200 megawatts alternating-current (MW-AC) of total installed capacity.
The Missing Link in the Community Solar Equation
Richard Keiser, the founder and CEO of Common Energy, was working in residential solar for several years and became interested in community solar as it was emerging as a concept. But the real catalyst for starting the company occurred when he helped arrange financing for a large portfolio of community solar projects. After raising the money the developers quickly realized that they would need help managing the thousands of subscribers which would require everything from a call center, to methods to manage consumer compliance and a scalable software. The partner went back to Richard and asked if that was something he could help with–which is how Common Energy got its start working closely with an early-stage New York portfolio of community solar assets.
In addition to getting the legislation to enable community solar, the biggest obstacles to realizing these projects are the logistics and outreach that are needed, which is where Common Energy comes in. It adds a lot of complexity for utility companies to go from single to multiple off-takers because they need new tools for things like remote meter program tracking, billing, and customer acquisition. These added layers have been one of the most significant barriers for developers hoping to enter the community solar market and there is a huge opportunity for services that address these obstacles. As these services become more widely available, large-scale solar developers could access previously unreachable demand for solar energy.
The way Common Energy fits into that equation is that it enables utilities without previous experience to offer shared solar through an energy platform that connects households to local clean energy products. From the customer's perspective, their existing electricity account is directly connected to a local clean energy project. Enrollment is free and can be completed within minutes on Common Energy’s website. Once they are enrolled, customers receive clean energy credits which saves them between 5-15 percent on their electricity bill, while lowering carbon emissions in their community. How many credits a customer receives will depend on how much electricity they use in a year. But as an example, an average household uses 12,000 kilowatt-hours a year and would save about $100 annually just for signing up. They will also prevent over 4,000 pounds of carbon emissions per year.
The value proposition for project owners is that Common Energy will manage their clean energy projects, similar to how a property manager would manage a building. Common Energy’s SaaS platform manages subscriber acquisition, billing and management on behalf of owners. It also enables them to monitor key operational and financial metrics in one place that can be customized to facilitate reporting and accounting, providing incredible visibility into each project’s financial performance and resulting in higher ROI.
Generating Clean Energy and Customer Buy In
The company has grown to over 70 community solar projects in 4 years, representing over 250 megawatts of projects under management. They have enrolled over 10,000 homeowners, renters and businesses who are now helping the transition towards a lower-carbon future while simultaneously saving money on their energy bills. They have also brought some of the largest corporations into the community solar space through partnerships with Microsoft, Linkedin, Corning, Bloomberg, Akamai Technologies and VMware who supported these projects in their early stages to offer sustainability benefits to employees. These companies have helped bring credibility to the entire community solar sector.
While community solar delivers many benefits, perhaps its most significant is that it provides everyone with the ability to support a cleaner energy supply and benefit from the cost saving that delivers. When a utility buys power from a renewables facility it is usually completely out of sight to the general public. But with community solar, each customer takes the step to enroll in a project which is likely in their neighborhood. When they enroll they learn the name of the project, where it is located and how much energy it generates each month. Common Energy takes it a step further by measuring the emissions impact of each subscriber’s community solar subscription and presents the cost and emissions saving to the customer. Community solar thereby connects energy users with the mission and transition to clean energy in a very visceral way–by making it part of their daily experience.
“Addressing climate change is an enormous challenge, and one that requires everyone to make changes to how we power our lives. Community solar is about taking down barriers and providing everyone with the opportunity to support and benefit from clean electricity.”
- Richard Keiser, CEO and founder of Common Energy
In 2021, the US Department of Energy announced a new National Community Solar target: to enable community solar systems to power the equivalent of 5 million households by 2025 and create $1 billion in energy savings. As more community solar projects come online, companies like Common Energy will be the key to ensuring they are accessible and running effectively. We are excited to partner with Common Energy and have invested $16.5 million to help them expand consumer access to local, community solar projects across the country, scale Common Energy’s industry-leading energy management platform, and grow the company’s management and operating teams.
As the United States energy system becomes more and more electrified, models like community solar will facilitate a more equitable and widespread transition to clean power. We look forward to working with Common Energy to enable more community solar projects, and to bring the financial and emissions implications for energy use to the forefront of the energy transition.