D.C. Releases Proposed Community Solar Regulations

26 Sep 2014

 On October 1st 2013, the D.C. legislature passed the Community Solar Renewables Energy Act (B20-007)

On October 1st 2013, the D.C. legislature passed the Community Solar Renewables Energy Act (B20-007)

On October 1st 2013, the D.C. legislature passed the Community Solar Renewables Energy Act (B20-007), making D.C. the tenth state to pass community solar legislation. However, the waiting game was only just beginning as D.C. solar stakeholders awaited instructions from the D.C. Public Service Commission (PSC) on how the program would be implemented.

This fall, after numerous meetings between industry stakeholders, local utilities, and government officials, and after significant urging from MDV-SEIA the D.C. PSC released their initial proposed District of Columbia Municipal Regulations (D.C.MR) for implementing net-energy metering and the community solar program on September 15th, 2014. The PSC intends to adopt these rules within 30 days, after comments have been submitted.

What is Community Solar?

Community solar allows a utility ratepayer with a meter located in Washington, D.C. , but who cannot install a solar system on their own roof, to access solar. Typically, these customers are renters, have roofs that are unfit for solar, or cannot access solar for financial reasons. By buying a subscription to a Community Renewable Energy Facility (CREF) that can be owned by a third-party, subscribers receive a Community Net-Metering Credit (CNM) on their electricity bill to offset their demand for the month. The CNM is calculated by multiplying the energy produced by the percentage of the CREF the customer owns, by a previously agreed upon rate. If the CNM credits exceed the customer’s consumption for that month, they will rollover from month to month, but not beyond 24 months, until they are fully utilized. Similar programs in Colorado and soon in Minnesota have opened up solar opportunities for a variety of ratepayers. We also feel that there will be significant growth in the model over the coming year in Massachusetts, as “stranded” larger projects work out the mechanics of finding individual subscribers . However, the bill will have particular relevance in DC, where there is a particularly acute shortage of rooftops, intense residential demand, and a very large proportion of renters. Many community solar projects, in fact, may take the form of modest condo rooftop systems of well below 50kW, serving only the residents below.

Criteria for D.C. Community Solar

Each CREF must meet the following criteria:

  • Each project must have no less than two subscribers
  • Additional subscribers can only be added once per quarter
  • A given project cannot exceed 5MW in size
  • A CREF cannot provide more than ten percent of the energy at one specific distribution feeder, when combined with other net metering facilities
  • A CREF does not have to be fully subscribed; If the capacity of a CREF is not fully subscribed, the Electric Company has to purchase all unsubscribed energy up to the 5MW limit
  • Any CNM credits for unsubscribed energy will be distributed amongst the other subscribers; Any credits for unsubscribed energy not immediately credited to the subscribers, must be fully utilized within 24 months
  • At no point can a subscriber or all of the subscribers combined, offset more than one hundred and twenty percent of their billed electricity consumption over the previous twelve months.

In addition to describing the function of how credits will be paid for and allocated, the regulations also provide clear guidance on third-party ownership of CREFs and leave business matters outside of the realm of the PSC. For example, pricing and contractual matters are to be handled by the CREF owner and subscribers. CREF owners will retain ownership of all environmental attributes including SRECs.

The D.C. Solar Market

The D.C. solar market has seen tremendous growth over the last few years with 30MW of installed capacity by the end of 2013. In 2011, the District adopted an aggressive renewable portfolio standard (RPS), shooting for 250MW of installed solar capacity by 2021. With limited space and aging buildings, this target would be difficult to meet without the Community Renewables Energy Act. Thanks to community members and groups like DC SUN working with the D.C. Council, the District will continue to be a leader in the solar market.

Financing for D.C. Solar Projects

As the largest and oldest SREC aggregator, Sol Systems is equipped to provide SREC solutions for community solar facilities. Additionally, Sol Systems’ project finance team can provide developers working on community solar projects access to financing. Contact us at 888-235-1538 x2 or finance@solsystemscompany.com to get started.

About Sol Systems

Sol Systems is a solar energy finance and investment firm. The company has facilitated financing for 165MW and over $600 million of distributed generation solar projects on behalf of Fortune 100 corporations, insurance companies, utilities, banks, family offices, and individuals. It has over $300 million in assets under management as of September 2014.  Sol Systems provides secure, sustainable investment opportunities to investor clients, and sophisticated project financing solutions to developers. The company’s tailored financial services range from tax structured investments and project acquisition, to debt financing and SREC portfolio management. For more information, please visit www.solsystemscompany.com.

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Victoria Ngare

Victoria Ngare