RMI: Community solar market could reach $30 billion

Long rumored to be a market the industry needed to exploit, RMI says challenging – but fixable – barriers remain.

February 28, 2018 Frank Andorka

A community solar garden

Image: Minnesota SEIA

The barriers are incredibly close to coming down and when they do, commercial solar is poised to boom.

That’s the conclusion of the latest Rocky Mountain Institute (RMI) report, titled The Progress and Potential for Community-Scale Solar, says the reason community solar hasn’t quite taken off yet in all states is that barriers – encompassing cost, access, and demand – remain.

But RMI concludes that the institutional barriers in community solar’s way are coming down and predicts a surge in installations will follow. It predicts the market will eventually reach $30 billion, though it provides no specific timetable for when that might happen.

The report cites two primary reasons community solar projects make sense. First, they are large enough to benefit from economies of scale usually reserved for utility-scale projects. Conversely, they are small enough to connect to distribution systems efficiently, saving headaches for the utilities in areas where community solar farms are built.

Finally, community solar projects, typically sized between 0.5 MW and 5 MW per installation are sited directly within the neighborhoods they serve, which means that utilities and electric cooperatives can leverage local connections to facilitate the development process.

RMI says such connections also continue to drive down costs.

The data RMI uses in the report is based on the work it has done supporting co-ops in Colorado, New Mexico and Texas in their efforts to procure more solar electricity, focusing specifically on the community solar segment of the market. Previously, RMI has published research highlighting methods rural co-ops can use to reduce community solar’s costs by 40% and enable a 30 gigawatt community solar market — the equivalent of about 50 average-sized coal plants —by 2020.

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