DEFG Releases Final Report and Roadmap for Public Distribution
Washington, DC … DEFG, a management consulting firm focused on customer strategy and experience in the utility sector, (www.defgllc.com) released today the “Final Report of the Low Income Consumer Solar (LICS) Working Group.” The Working Group brought together over 100 stakeholder organizations representing utilities, developers, non-profits and the public sector as part of a consensus-building process that took place over a year to develop recommendations and a roadmap to promote low-income community solar development.
Community solar projects requiring 100% low- to moderate-income customer ownership are challenging to finance because the subscribers are viewed as high risk by most developers and financiers. Requirements for upfront capital or monthly fees and no missed payments are out of reach for many low-income households and communities. The Working Group developed recommendations and a roadmap on alternative models to consider, including not only how to structure these projects, but how to support low-income customers on an ongoing basis given all the intersection points, e.g., energy efficiency, arrearages, and energy assistance that need to be aligned with shared generation assets.
“What made the Working Group so valuable,” said Judith Schwartz, President of To the Point and Lead Investigator, “was the ability of experienced energy professionals from a range of disciplines to articulate how shared investment in solar projects could be adapted to serve broader needs of underserved communities. We also discussed our differences of opinion and reflected alternative perspectives in the final report.”
“Solar projects create opportunities to bring people together and facilitate access to human-scaled renewable technologies,” said Nat Treadway, DEFG Managing Partner and Project Lead. “Families can increase their sense of control over electric costs, and will be more likely to have conversations on how to wisely manage precious local distributed energy resources.”
Selected takeaways from the final report:
1. Increasing LI access to shared solar will take all stakeholders with a potential interest. Allow utilities, non-profits, and commercial entities to serve as developers, hosts, off-takers, administrators, and beneficiaries as long as LI consumers are ultimately served. This will also spur innovation and reduce costs.
2. If a fundamental goal is to increase access to solar for more LI residents in order to provide economic benefits, then recognize that more than subscription models currently in use will be required:
- Form factors other than solar gardens may allow greater access and lower costs in some situations
- Approaches that reflect cash flow realities can improve recruiting and participation
- Participation is one tool to reduce energy burden in the suite of LI energy services
3. Allow flexibility in commodity monetization options so financial benefits can flow through a range of designated assistance providers under clear guidelines and rules. For these projects upfront community input, involvement and ownership are pre-requisites.
4. If a goal is to increase compliance with RPS targets, “decouple” sales and ownership connection of a virtual 1:1 relationship between participants and a specific physical asset:
- Allow symbolic ownership of visible, local assets to reinforce the sense of pride and connection
- Allow all interested LI residents to have opportunity to participate independent of full cost recovery
- Enable larger, more cost-effective assets to be included in less-risky renewable portfolios which improves development and funding options and reduces churn
5. If a priority is to improve reliability and resilience, then facilitate projects that provide other community benefits so municipalities and utilities have reason to invest and subsidize LICS:
- Consider locational value of asset on grid operations
- Provide resilience insurance for the community in case of emergency conditions
- When appropriate, permit location of DERs to physically benefit disadvantaged residents and neighborhoods
“This Working Group brought together a variety of experts on how to successfully integrate solar projects with essential low-income customer services,” continued Treadway. “Energy assistance programs and community solar project may represent a perfect match to help people keep up with their utility bills.”
Download a free copy of the report.