Community-based solar farms the next big thing for Maine

Fortunat Mueller, a co-founder and managing partner of ReVision Energy, and Sue Jones, director of community solar farms for ReVision Energy, are seeing a surge of interest in a new business model for solar energy ownership in Maine that enables up to 10 individuals to co-own a solar array and use its power to offset the electricity bill for their individual home or business.

Last October, ReVision Energy completed the installation of Maine's first community solar farm at Sunnycroft Farm in Paris, with the help of a $40,000 grant from Efficiency Maine. Its second community solar project, completed this summer in Edgecomb, is designed to produce approximately 59,000 kilowatt-hours of energy per year and offset 27 tons of carbon annually. Other projects are under way in Freeport, Rockland, Wayne and Wiscasset.

Nationally, the U.S. solar market posted a record year in 2014, growing by 34% over 2013; Maine's solar capacity increased 43% for the same period. According to the Solar Energy Industries Association's second quarter report, solar installations posted 70% growth over the same period a year ago, bringing the total installed capacity in the U.S. to a record 22.7 gigawatts, enough to power 4.6 million American homes.

Mainebiz caught up with Mueller at ReVision's Portland office and Jones (via a conference call) to get their perspective on these trends and what they might mean for Maine homeowners and businesses. An edited transcript follows.

Mainebiz: Both of you participated in the Aug. 25 “Light the Way” roundtable discussion on solar power in Portland sponsored by Environment Maine and Maine Conservation Alliance. What were some of the talking points?

Fortunat Mueller: The event was organized as a follow-up to President Obama’s ‘Clean Power Plan.’ We wanted to talk more specifically how solar power could help Maine achieve the goals in that Clean Power Plan and even more specifically about how Community Solar Farms might do that, as a relatively new possibility in the solar power landscape here in Maine.

MB: What's driving the interest in 'community solar' projects here in Maine?

FM: Community solar farms are a natural outgrowth of the individual and commercial markets. When individuals and businesses have the motivation to do solar, but they don't have a good physical location for it at their site, historically there has been no good alternative for them. Community solar farms allow them to retain the benefit of owning a solar project, even if its location is remote from their physical site. It's something that's been growing in popularity in the country over the last several years, with a handful of states really leading the way.

MB: If you have nine to 10 investors signing onto a community solar farm project, is the goal to install enough panels so that each investor's yearly electricity needs are fully met?

FM: Yes. But I should clarify: They are not so much 'investors' as they are 'owners.' That's an important distinction, because in a lot of other states the 'community solar farm' model is more like an investment transaction. But in our projects, you're actually an owner of your fraction of the total project. You are a co-owner, so it's a true community ownership of the solar farm.

Most of the members are sizing their shares to meet the majority or all of their electricity needs. But they don't have to: Just like if you put a solar system on your roof, you could choose to put one that does 30% of your load, or 90% of your load.

BM: How does the power generated by the community solar farm get into the homes?

FM: The solar farm is connected to the grid and obviously all the homes are connected to the grid. So, in a sense, the solar power is going into one end of the pipe and the individuals are getting their electricity out of the other end of the pipe. In practice, that’s not all that different from a rooftop system, because residential rooftop systems are generating most of their power when people are not home using power any way: Most of it goes out to the grid and serves other loads, and you get your solar credit in the form of a net metering credit. It works exactly the same way on a community solar farm.

MB: Sue, what's involved in getting a community solar farm project up and running?

Sue Jones: After a site has been identified and a host is onboard, we market that site to potential members or owners of the array that will eventually be put on that property. We have a number of folks in our database who have expressed interest in solar but, for whatever reason, they can't install it on their own property. It may be they have too much shade, or they don't have a strong enough roof, or don't want the panels on their roof because they're in a historic preservation district. There are many reasons why people don't want to, or can't, put solar on their own property.

In those particular cases, a community solar farm is their next best option, because it allows them to own their power and their share of power generation for the life of the project, 40 to 50 years, which allows them to go forward with their goal of having green power.

BM: So you’ve lined up your nine owners, and they’re ready to sign on the dotted line. What happens next?

SJ: Two things need to happen. As each individual owner sizes their respective share, there’s what’s called an ‘iteration contract’that they will enter into with ReVision Energy. That’s the only thing that ReVision and the individual owners contract for. The rest of the documents have to do with forming and owning a community solar farm. So as part of that, we have documents that create what’s called a “mutual benefit nonprofit association” — it’s a nonprofit corporate body that sets up the corporate structure for the nine members. It’s just like a regular for-profit corporation in many ways, in that it sets up how they manage and operate their asset, which is the community solar farm.

BM: If a landowner offers to host a site, are they typically also an ‘owner’?

SJ: It’s about 50:50 so far, where the host is also a member. But we’ve got a couple potential projects in the pipeline where hosts are just going to be hosts and are not going to be members.

The benefit of doing both is that you’re involved in both the management and operation of an asset that’s on your property. You’ve got your hands on both sides of the process: You are the owner of the land, but you’re also a co-owner of the solar array. I do think over time most hosts will probably become members as well, just because when they offer use of their land typically they are also interested in having solar to meet their own energy needs.

MB: The two projects completed to date: Were the owners primarily homeowners, or did you have any businesses among them?

SJ: If I remember correctly, all of them are residential homeowners. In one of the projects coming up, there are opportunities for people interested in commercial solar options. So we’ve expanded our options for community solar farms so they can fit just about everyone’s needs who can’t do an onsite project.

MB: What’s the level of interest in Maine’s business community regarding solar power?

FM: We’re seeing more and more interest within the business community, and Doug Carter, the owner of Carter’s Auto Service, is a good example. He is motivated to do it by things beyond the economics —but he also found the economics of going solar were rather compelling for him. That’s because the price of solar has come down so much. By taking advantage of the federal tax credits and accelerated depreciation, Doug found he could borrow the money to do this project and the savings more than pays for his debt service: So it’s a cash flow-positive project for him, right from the very beginning.

MB: What’s the status of the federal tax credits for solar? Will they be continued?

FM: There is lots of discussion about that. Right now the federal tax credit is good through the end of 2016. It’s not something the president can do by executive order; it’s got to go through Congress. Congress has been considering it this year as part of the ‘tax extender’ package, extending some of the tax credits that expire this year, so we’re hoping a similar thing would happen next year for solar, but it’s hard to say.

MB: Is the uncertainty about whether those federal tax credits will be extended causing some people to sign up for solar power this year, to ensure that they will receive the credits?

FM: We are seeing a lot of interest, but it’s a little hard to separate how much of the urgency is based on that reason and how much is simply due to the overall growth in the market driven largely by the decrease in the cost of solar power and the increase in the cost of conventional power. It’s not always easy for us to tell how much the urgency we sense for our customers is based on the end-of-next-year deadline for the tax credits.

But definitely interest is picking up in a very substantial way for both residential and commercial solar, across the country and here in Maine as well.

MB: You’ve been at this for awhile. Are you feeling that solar power is starting to come into its own, or is on the verge of coming into its own. Could you characterize where you see solar power as an option for homeowners and businesses in Maine?

FM: Well, across the world and across the country there’s no question solar has reached the tipping point where it increasingly is being seen as the most cost-effective way to make power into the future and a really really important part of our future energy mix. We’re starting to see that reflected here in Maine as well.

Maine is a little bit behind the neighboring states and the rest of the country in terms of having a robust state solar energy policy. But even here we’re seeing a huge level of interest from homeowners and businesses in solar power. So I’d say we have reached the point where solar is really beginning to take off, and I expect it to only increase. There may or may not be a ‘hiccup’ in January 2017, depending on what federal policy does. But even if the solar tax credit is allowed to expire at the end of 2016, I think any disruption that happens in early 2017 will be relatively temporary.

MB: And that’s because the price of solar panels keeps going down?

FM: Even without the tax credit, solar power is cost effective over the course of its life. Most dramatically the prices have come downreally substantially over the past few years. Of course, the price of everything else keeps going up, notwithstanding the current ‘cheap’ oil, over the long term it will go up and the cost of transmission keeps going up. So, solar looks like a better and better option.

BM: Do you  have a FAQ page on your website that might explain the particulars of how all of that process works?

FM: We have a website that has information about completed projects as well as our upcoming projects, as well as a FAQ page.

MB: Are there questions I didn’t ask, or any other points you feel would be important to make?

SJ: I think one of the most interesting aspects of community solar power is how long the arrays generate power — meaning, this is an investment in an asset that is likely to last upwards of 40 years or longer. What I love about that concept is that the person who comes in as a member will have power being generated by solar for potentially the rest of their life. The flexibility of community solar farms is that they create the possible legacy of being able to transfer this power to your children or your grandchildren.

MB: Is the ‘transfer’ tied to the house where they’re living? What happens if they pass on or the house is sold? If the member or owner has a child living in Maine, can that child receive that member’s share of solar power and get credit for it on their electricity bill at a different location?

SJ: As long as the transferee, the person who is accepting the asset, lives in the same utility transmission service territory, then it’s a valid transfer. So, for CMP, which has such a large territory, the opportunities are virtually endless.

FM: To add to what Sue is saying about disposition plans and the fact that these solar assets are long-lived, the thing we talked about with the Allen Avenue church in Portland, which is now looking like it will happen next summer rather than this year, the members and owners there intend to — one by one as they move out of Maine, or recover their investment fully, or whatever — donate their shares to the church. So, at the end of the day, the church ends up with a solar system that’s going to meet a majority or all of its electricity use. And it becomes a lasting endowment, an energy endowment to the church, for 40 to 50 years. And the individual members will have recovered all or most of their investment in under 10 years. So it starts giving them in year 5 or year 10, a really huge benefit over time for a relatively small amount of initial investment.

As Sue said, one of the exciting things about this community solar farm model is how flexible it is. That’s a really neat idea that the church developed and we’re hoping to make happen.

Editor's note: This is a longer version of the "On the Record" interview appearing in our Sept. 21 print edition.