Community Solar -- Frequently Asked Questions
How many kWh one would expect to get from a kW solar panel?
The short answer: 1,100 to 1,200 kilowatt hours per year per kilowatt
The long answer: You can tell how much electricity a kilowatt of PV will produce by multiplying the maximum amount that could be produced with sun shining 24/7 by the percentage of time the sun actually shines in Massachusetts.
You find the maximum amount of electricity that can be produced by multiplying a kilowatt (1) times 24 hours per day (24) times 365 days per year (365). This will give you the highest number of kilowatt hours a kilowatt can produce with the sun shining all the time, with the panels at a perfect tilt and orientation with no shade. 1 times 24 times 365 equals 8,760 kilowatt hours a year for each kilowatt of production.
In Massachusetts, the sun doesn't shine 24/7. According to the Massachusetts Department of Energy Resources (DOER), it shines 12.8% of the time.
So multiply 8,760 kilowatt hours per year times 12.8% to get 1,121.28 kilowatt hours per year - the actual amount of electricity that a kilowatt panel in Massachusetts can produce.
I have heard that people have been penalized by Eversource when they try to sign up for a different provider. Is there a possibility that Eversource will somehow penalize or charge some extra service charge to people who sign up for this.
Based on current regulations, there aren't additional charges for community solar customers. This program is different from the competitive electricity provider programs where you switch to a different provider. Eversource is still your provider. They'll just be giving you a credit for the power produced by your part of the shared array.
What happens after 25 years?
The system will be owned by Co-op Power on behalf of the members. If the system is still running (which is likely), we’ll be able to generate funds by selling the electricity to raise money to re-commission or decommission, or do something else with the system.
Will I receive the Solar Renewable Energy Credits (SRECs) from my share of the array?
Not directly. We’re taking out a loan and paying it back with the SRECs. This allows us to offer a lower cost. Our $2/watt rate is among the lowest being offered. Note: If the SREC market performs well, members of the Co-op can recieve profit distributions. Co-op Power acts a non-profit on behalf of its consumers.
How does this compare to owning a system on my own roof?
The short Answer: Owning a system on your roof frequently has a 5-7 year payback in MA; our community solar has ~10 year payback, with conservative modeling. If rooftop works for you, it will always be the best value for homeowners.
The long answer: Our $2,000 per kilowatt share of the array's production would compare to a price on your house of $3,750 to $4,250 for a kilowatt installed. You'd also have to pay for any operating or maintenance costs and pay to replace the inverter sometime after 10-12 years. You would, however, also get the SREC's and tax credits. If you can install a system on your own property, that will likely be a better deal, depending on what the SREC prices do. If you can't, or if you don't want panels on your roof for some reason, we believe this is the next best financial deal, with a system you'll own cooperatively with other members of Co-op Power. Local ownership and the lowest price.
How do I know how many kilowatts I’ll need?
It's a little complicated. The easiest way to figure it out is based on bill value rather than price because of the MA net metering laws. The two pieces of information you need are how many kWhs you use on average in a month and how much you pay on average. Based on current prices, 1 kW of Community Solar in Eversource territory wil produce $13-$15 per month as an annualized average. Example: If you pay $100/month, you'll want 6 kW, to credit you with an average of $78 - $90 each month. It's always better to undersize than oversize.
Can I sign up if I don’t live in Franklin County, near the array?
Yes, anyone in Western Massachusetts with Eversource can sign up for our first Community Solar project. As long as you’re in the same “load zone” as the array, the utilities will assign virtual net metering credits to your utility bill. We can help you figure out if you're in the same load zone as the project you're interested in.
What is virtual net metering?
Virtual net metering allows customers of certain electric distribution companies to generate their own electricity in order to offset their electricity usage. Common examples of net metering installations include solar panels on a home or a wind turbine at a school. These installations are connected to a meter, which will measure the net quantity of electricity that the customer uses. The virtual aspect is what allows those net metering credits to be moved from one site to another, as is done with community solar. It's virtual because the utility takes the excess production credit where the solar is being produced and applies it to the meter of an off-taker at a different location. The electrons to literally move from A to B, but the utility allocates credits as if they did.
What if I want community solar, but I don’t live in Western Mass and get my electricity from Eversource?
We are in the process of developing projects in other regions and utility territories. Stay tuned (or contact us) to learn whether be able to participate in one of those projects. We have projects under development in New York State, Vermont, and parts of Eastern Mass.
Is it possible to get financing to cover the cost of the shares?
For those that are income eligible, shares in the Community Shared Solar program are eligible for the Mass Solar Loan program. Click here to learn more http://www.masscec.com/programs/mass-solar-loan.
Can this be included as part of a MassSave HEAT loan?
The HEAT loan targets energy efficiency investments typicallly. Better to consider the MA Solar Loan Program. http://www.masscec.com/programs/mass-solar-loan.
Will my electric bill change?
Your monthly bill from your utility provider will look almost identical to your previous bills. The only difference is that you will see a deduction of the price you pay based on the Virtual Net Metering Credits that we allocate to your bill.
If I use less energy in a month than my shares generate (ex. 2 kW), what happens to the extra energy?
The value of that energy carries over onto the next bill. Since PV systems generate the most electricity during the summer, it's possible that you will have outstanding credit during the warmer months that will get used up through the winter.
What if I move?
If you move to a new home in the same load zone, we can easily transfer your share to the new home.
What if I move and leave the load zone?
Your shares are transferable and can be sold to another co-op power member in the load zone. The thing to keep in mind is that we can only reassign Virtual Net Metering Credits twice a year so you may have to wait a few months depending on when you move.
What if I no longer want my share?
It is transferable and we will help you sell it to someone else. See answer above.
What is the return on investment if I buy 2 kW?
The payback time is around 10 years, depending on pricing factors and weather conditions.
Can I buy just one share?
Can I buy more than 2 shares?
Yes, but to get the full benefit of of the savings, we reccommend that you don't buy more shares than your home uses.
What is Co-op Power's Siting Policy?
All projects must be located on marginal land or rooftop areas. Projects must be abbutter-approved, meet setback and slope requirements, not be on a wetland, etc. We will never put solar on prime agricultural land.
How do I qualify for the solar loan program in MA?
Click here to learn more http://www.masscec.com/programs/mass-solar-loan.
Does this offer include people having partial ownership in the array?
Yes! The array is owned cooperatively by all the people who subscribe within an allocation unit in Coop Power. In other words, in exchange for an upfront investment (and therefore partial ownership) in the array, they would receive income from SRECs and receive electricity at no cost or close to no cost in order to pay back their initial investment.
Participants get the virtual net metering credits from each 1 kW share in exchange for their upfront payment for 25 years. They don't have other costs to pay for those credits.
We can offer the shares at $2/w because we use the SREC income to pay off a loan, in effect, giving participants no risk access to the tax credits (which many couldn't qualify for). Compare the $2/w with $3.50 to $4.50/w for other ownership models and it will be clear our financing system is the most ideal for most consumers, businesses and organizations.
Do you offer a contract for net-metering where Coop Power or a third party cover most of the initial investment and retain actual ownership?
Co-op Power is 100% owned by its members. Legally, Co-op Power is just a vehicle for members to own things together. All benefits, profits, etc. pass onto the members. So the answer to your question is no. No third party entity or entity connected to Co-op Power owns the array. The members own it collectively.
Do the investors retain the right to a federal and state tax credit?
No. Those credits go to the tax equity investor who has also given us money to build the system.
Does each individual "own" a portion of the array that is proportional to their investment, or they do co-own the entire array with other members of a Coop Power? What am I actually paying for? What is an allocation unit?
We are offering people a 25-year net-metering agreement at $0.00/kWh for an upfront price of $2/W in an array that subscribers cooperatively own after 5-7 years.
An allocation unit is a term used in cooperative law that creates subgroups in the cooperative for different products and services. Essentially, the people subscribed for each community solar array own the solar LLC together after the initial period. (We won't have the details finalized until we have signed an agreement with a tax equity investor.)
The reason people are interested in ownership is because it gives you the benefits of ownership - governance decision making, control over the resource, and a share in the profits. The other community shared solar projects that advertise that people "own" a portion of the array are selling ownership in a very misleading way. People don't actually own anything of value. They do not have an ownership stake in the project at all. They have no governance rights to vote at a shareholders meeting, for example. They have no control over the array. They have no share in the profits. They have a "special interest" in the LLC that gives them no rights, no benefits, no profits. It's a greenwashing marketing strategy that takes all the value we've built up about local ownership and translates it into nothing of value. It's like telling people they can purchase a shelf at River Valley Market for $500 versus purchasing an ownership share and becoming one of the owner-members in the cooperative for $250. The first costs more and has no value. The second gives you governance rights, member benefits and a share of the profits. One of the companies claiming ownership is charging $3.50/w for the VNMC's and ownership of a panel. We're charging $2/w for the VNMC's and full cooperative ownership of the array with entitlement to governance, benefits, and a share of the profits generated.
I'm still confused on how Coop Power owns the array and manages to access the federal tax credits given that you are a not-for-profit. (Or aren't you?) Does a tax-equity partner build the array, take the tax credit and then sell the array back to Coop Power? If so, how long do they have to own the array to access the tax credit?
Co-op Power will access the federal tax credits through a Partnership Flip Model. Co-op Power is incorporated as a consumer-owned cooperative. There are three types of corporations according to the IRS. For profit where profits are distributed to their shareholders. Non profit where profits are kept within the company. Cooperative where profits are distributed to the people who are the customers. As a cooperative, we are able to serve as the sponsor in an LLC for the Partnership Flip Model and secure the tax equity benefits for our community solar projects. Co-op Power operates on a not-for-profit basis, where profits are shared with our customers if we charge them prices that generate a profit.
In our model, Co-op Power builds the array. We get 1/3 of the money to build the array from tax equity partners, 1/3 from a loan, and 1/3 from the subscribers. The tax equity partners have a 99% ownership share for 5-7 years. The tax equity fund we're negotiating with may stay in with a partial ownership until year 10. After year 10, Co-op Power will be the full owner with all the benefits of ownership assigned to the subscribers.
How much of the economic benefits flow to the individual directly and how much to the Coop Power allocation unit (and how much to the tax equity partner if there is one)?
There are many ways to get at an answer to this.
First, you can see the basic anatomy of a community shared solar deal by looking at what people are paying and what benefits they receive. At Co-op Power they pay only $2/w. That's essentially the price if benefits are driven to the consumer. In for-profit companies, consumers pay $3.50/w. That's essentially the price if benefits are driven to the tax equity investors and developers. Our model provides the tax equity partner with the minimum required by law, in a socially responsible investment.
The question assumes that there is a difference between the individual participants and Co-op Power. Cooperative law is based on the principle that a group of people are operating together as one person to accomplish something together that they can't do as easily on their own...cooperative purchasing, cooperative marketing, cooperative education, cooperative production, etc. Cooperative law treats a group of individuals in the same way that individuals are treated. There is no difference between the members of River Valley Co-op and River Valley Co-op. If River Valley Co-op makes windfall profits, they're distributed to the members based on how much they've purchased (cooperative law requires distributions to be made in this way) at the Co-op or the members decide to keep some of them in the co-op to do something else they want to do together. It's the same for Co-op Power. We are not different from our members. We are hoping to be generating profits soon. The members will decide whether to distribute them back to members based on their purchases or reinvest them in new products, services, or business development projects.
If my solar share generates more kWh than I use, would the extra be credited to my bill? Could that credit apply to the delivery rate charged by my utility, or just the generation rate?
You'll receive the virtual net metering credits that go with the kilowatt hours your 1 kilowatt share produces. The utility isn't working in terms of kilowatt hours at all. They're just giving you the credit on your overall bill and the credits go to pay the overall bill, including the delivery rate.
We are Eversource customers, but we are currently using an alternate supplier, which has lower generation rate. Do we have to switch to Eversource for the generation service before starting this program?
The information we have is that the credit just applies to your bill, no matter who your generation service is.
Do you have an approximate idea of what Eversource's rate to their customers is expected to be, for the electricity generated by Project 1?
Eversource will credit us the commercial virtual net metering rate which is now 11-12 cents per kWh. Your residential rate is higher, so you'll have to purchase more kW's in a community solar project than you do in a rooftop solar installation to cover the same portion of your bill. We're estimating you'll need 1/3 more kW's in a community solar project...So if you'd need 6 kW's for your home in a rooftop solar installation, you'd need 8 kW's in a community solar project.