Energy storage boosts community solar adoption nationwide

Community solar, a “solar for all” model that allows businesses and individuals to subscribe to electricity credits generated by locally sited solar projects, is a quickly growing market segment in the United States. Midway through 2023, the installed community solar market reached nearly 6 GW, with projects in 41 states and Washington, D.C. A helpful driver for even more community solar to get adopted nationwide might be just adding energy storage.

Pairing energy storage with community solar doesn’t have much impact on the solar project’s design or installation, but it can push the solar project over the finish line. Georgina Arreola, VP of policy for community solar customer manager Perch Energy, said storage helps community solar by improving project economics through additional incentives from utilities and states.

“Certain states enable projects to receive compensation for releasing storage electricity at peak demand times (peak shaving). This compensation impacts financing and revenues, which makes a difference,” she said. “Pairing community solar projects with storage helps to improve grid resiliency even more than local generation would alone. Consequently, many markets encourage paired storage with additional incentives.”

Solar contractor Nexamp, ranked No. 1 on the Community Solar market segment of the 2023 Top Solar Contractors List, said incentives for energy storage let Nexamp accept more subscribers on its community solar facilities located in the Northeast and Midwest.

“In any given market, our offering to community solar subscribers is pretty consistent. But the energy storage revenues will help the overall financial picture of the project and allow us to move it forward,” said Rob Ritchie, energy storage director at Nexamp. “You might have a solar-only project that might not benefit, but if you add storage, you add the revenue streams in multiple programs that can enable projects to go forward and unlock those community solar benefits.”

Many markets are moving toward making community solar + storage a requirement. For example, California has a proposed net value billing tariff program that would require community solar projects to have a minimum four-hour battery attached. Besides the monetary incentive benefits to the projects themselves, Arreola said using energy storage benefits the subscribers too.

“Adding storage makes community solar projects more efficient. For Perch, more efficient systems enable us to offer more subscriptions per project,” she said.

Ritchie explained this as getting more usage out of the solar project’s generation window.

“Energy storage assets shift solar generation from the middle of the day to afternoon peak periods in the summer. That increases the credits that Nexamp receives, so we have more in our bucket to pass along to subscribers through the community solar program,” he said. “It doesn’t generate additional kilowatt-hours, but it shifts that solar generation and shifts the value of it to allow us to pass along that value to our subscribers.”

As the separate community solar and energy storage markets continue to evolve, there are growing opportunities for retrofit situations. Massachusetts and New York recently tweaked their storage incentive programs, and Nexamp is looking back at its existing portfolio of community solar projects to find where adding energy storage would further improve a project’s financial and community impact. Ritchie said the company takes the “community” signifier of its work seriously.

“We look at these communities as a long-term partner,” he said. “If we did a project on this side of town, instead of doing [storage] on [the other] side of town, it’s easier to come in and continue to work on this existing parcel of land. How can we work together as a community, taking into account the feedback we received three years ago before we did the solar project? How can we partner to continue to make this a good fit for the local community?

“We’re trying to keep an eye out for new market opportunities to continue to add value to our existing fleet for our customers and Nexamp as well,” Ritchie said.