Written by Gary Skulnik on 4/14/2016
Community solar is being touted as a “game changer” for consumers who want to get solar energy but have been shut out of the current solar boom. What’s getting less attention is the door that’s being flung open to property owners for new opportunities to turn a dormant asset into a dynamic revenue stream. Community solar will be very good for consumers, but smart property owners can get a piece of the market with very little risk.
What is community solar? It’s a new and rapidly growing solar market segment that has a few different business models at work in a handful of states across the nation. In Maryland and other open competition states, the dominant model is where a company builds a solar project and then sells the power the project produces to consumers (called “subscribers”) in the area. The subscribers pay the project owner each month for their share of the power and get credited for that power on their electric utility bill. With full retail rate credit, as is the case in Maryland, the subscriber ends up most likely saving money while supporting solar. They don’t have to install any equipment or commit to a 20 year contract. As I said, it’s a game changer.
Currently, retail businesses in a strip mall can't practically get solar. They don't own the buildings they're in, and they pay their own electricity bill, so it doesn't make sense to work through the landlord. With community solar, however, it works. The landlord now has an incentive to work with a solar developer. First, as mentioned already, the landlord will have no legal liability, but instead will earn revenue from renting his commercial rooftop out. It gets even better, though. The landlord can work with a company like Neighborhood Sun to enroll his tenants as subscribers for the system he's hosting. The tenants get to have solar power and save money while the landlord now has an added perk in the extremely competitive commercial leasing space. He can attract and retain tenants with the availability of cheap, clean and predictable solar power. Additionally, if there's enough power left over for more subscribers, we can offer the power to the customers of the retail stores that shop at that mall, further cementing the link between the consumer and their favorite local brands. The public relations and marketing boost for the shopping center bring even more added value to the landlord and the tenants.
We're entering a new solar world in places like Maryland and New York where the rules for the new community solar market are taking shape. Just as previous new solar programs jump started an explosion in growth, so too will the community solar programs that are just starting. This time, the financial windfall will go beyond the consumer base. Landlords, and any company that owns a rooftop not being utilized finally have a chance to get a piece of the solar pie without having to obligate themselves for long-term purchases or do any marketing work. Studies predict community solar to be a multi-billion dollar market over the next five years. Savvy property owners should start lining up to join the market now.
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