By ARMANDO GAETANIELLO
The District of Columbia could soon be taking the lead as the region’s community solar hotbed. Our first blogpost described the Community Solar regulations in Maryland, and now we’re thrilled to be able to tell you a little bit about the District of Columbia’s initiative.
Indeed, there’s a fervent enthusiasm about the application of the Community Renewable Energy Act of 2013. Although DC formally legislated on the matter two years before Maryland (i.e. three years ago now), there’s no community-shared renewable energy project up and running yet. Developers have shied away because the rate structure didn’t fully recognize the full value of shared renewables projects.
Well, there’s a major update! The applicable credit rate for residential customers has been recently changed. This has been promulgated in the “Community Renewable Energy Credit Rate Clarification Amendment Act of 2016”, contained in the Fiscal Year 2017 Budget Support Act of 2016 (see page 105). This 2016 Act finally recognizes Community Renewables for what they are worth: the full retail charge applied by PEPCO to all ratepayers. DC-SUN and other solar advocates have argued for such improvement, and their views have finally prevailed. Moreover, the excitement about renewables has been fueled by the major boost of the District’s RPS (Renewable Portfolio Standard).
So now that the economics of shared renewables better reflect the value that these projects bring to the grid and to ratepayers, let’s delve into it… What do the 2013 Act and Public Service Commission’s regulations stipulate?
First off, it’s useful to draw a comparison with the neighboring state of Maryland, noting that this is not only Community Solar, it is Community Renewables! Solar power, as well as “wind, tidal, geothermal, biomass, hydroelectric facilities, and digester gas”, are all eligible technologies. In order to accommodate a diverse set of green energy sources, the maximum capacity for a Community Renewable Energy Facility (CREF) is 5 MW. In the case of solar, 5 MW is a very large project for D.C., which doesn’t have many large rooftops (or land!) to use. On the contrary, the limit is mostly suited for potential small Hydroelectric or Wind power facilities. Will we see small, low-impact dams on the two rivers in the near future?
The minimum subscription to a CREF is of 1 kW, and every CREF must have at least 2 subscribers. Project developers have therefore a wide variety of system sizes to consider. A CREF may supply energy to just a couple OR to as much as a thousand households (for multi-MW installed capacity). In the case of solar, bound to be the most widely used technology due to its flexibility, a 500 kW system will likely provide 100% of the energy annually consumed by 70 average DC households.
It is important to tailor the subscription’s size to the customer’s average yearly consumption. According to the DC regulations, a subscription cannot cover more than 120% of the household’s electricity consumption. Above that limit, subscribers will not be compensated for the power generated by their renewable energy block. It’s a sharp difference with Maryland’s regulations, where a household can cover up to 200% of the yearly electric consumption with a Community Solar subscription.
Summing it all up, the latest change in the applicable CREF Credit Rate to apply to subscribers’ bill fully reflects the spirit of the 2013 Act. The subscribers will gain credits for each kWh their blocks will produce and will be reimbursed for the generation, transmission, and distribution charges*. That means that Community Solar ratepayers will not be considered 2nd class citizens, but will have the same benefits as rooftop solar adopters. Neighborhood Sun aims to develop shared solar systems in DC and we will notify any interested persons as soon as projects get off the ground.
* For the record, PEPCO-DC has published its webpage related to interconnection and an application for a CREF earlier this spring. The utility still has to update the CREF credit rate to apply to subscribers under current regulations.
Armando is a member and frequent collaborator with Leaders in Energy. He is passionate about environmental policy, socio-ecological interactions, and international development. He earned his M.Sc. in Global Environmental Change Management at the University of Eberswalde, Germany.