Community Solar Takes Off

As community solar was growing, the states were attempting to balance the competing interests of utilities, solar developers, and customers.


Colorado’s 2010 Solar Garden Policy Act created one of the most successful community solar programs to date and has served as a go-to policy model for other states. One groundbreaking feature of the program was the requirement that state investor-owned utilities (IOUs) purchase 6 MW of electricity from community solar projects (called “solar gardens”) by 2013. This level of commitment was unprecedented at the time, and encouraged a significant investment in project development from the private sector. To ensure that the benefits of the program would be felt throughout the community, the program required that each solar garden have at least 10 customers signed up for the energy generation. In the end, the program was wildly popular, and subscriptions sold out in 30 minutes.


In May 2013, Minnesota took Colorado’s approach and expanded on it. As part of a law that aimed to increase solar generation thirtyfold by the end of the decade, the state required its largest utility -- Xcel Energy -- to create a strategy to encourage community solar programs. Unlike Colorado’s 6 MW capacity limit, here, the state imposed no overall cap on the program size. Instead, the state placed a 1 MW cap on each project. Further, each community solar program was required to have at least five subscribers, with no individual subscriber owning more than 40% of the project. The program also placed a geographic restriction on participation by requiring that all subscribers live within the same county as the project or in a contiguous county. These program elements were aimed at maintaining local control and controlling costs. Notably, the absence of an overall capacity limit in Minnesota’s community solar program set the stage for explosive growth, attracting significant interest from developers and leading to an unprecedented number of applications to Xcel Energy. Additionally, ambiguity surrounding the 1 MW project cap would lead to future implementation challenges.


Building on the success of its virtual net metering program, in September 2013, California enacted the Enhanced Community Renewables program, as part of a broader shared renewable energy program aimed at delivering 600 MW of solar energy to customers. Here, California took a slightly different approach by placing a minimum project size of 500 kW on projects (necessary, it was said, to allow the projects to be scheduled in the California Independent System Operator’s wholesale electricity transmission system). Project sizes were capped at 3 MW each. The program also contained geographic restrictions that required subscribers to be located in the same utility territory as the project.

District of Columbia

Inspired to spread the benefits of renewable energy more broadly, in October 2013, the District of Columbia created a virtual net metering program. Like Minnesota, the rules did not create an overall cap on the program, but did limit the size of individual projects to 5 MW. Participants in community solar projects were compensated at the utility’s standard retail energy rate.

New Hampshire

Likewise, New Hampshire passed similar a community solar law in mid-2013. Like Minnesota and the District of Columbia, the New Hampshire program lacked an overall capacity limit, but limited individual project sizes (here, to 1 MW). Customers were credited at the retail rate, with excess generation charged at the avoided cost rate.

As community solar was growing, the states were attempting to balance the competing interests of utilities, solar developers, and customers. The goal was to build attractive markets for solar developers while preserving both community values and protecting non-participating ratepayers. As these early markets matured, so did the programs. Over time, states began to revising certain program elements to overcome unforeseen roadblocks to implementation.

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