Prioritizing middle-market energy development opportunities like community solar opens up straightforward project financing and new revenue streams for commercial property owners and solar project stakeholders.
Community Solar Past, Present, and Future
Community-scale solar, commonly referred to as community solar, was pioneered more than a decade ago. Today, the community solar model is market-tested, well-established, and positioned for rapid expansion.
According to the Solar Energy Industries Association (SEIA), 41 states, plus D.C., have one or more community solar projects online with a total cumulative capacity of 5.3 gigawatts installed through Q3 2022. Additionally, at least 19 states and D.C. have implemented policies and programs recognizing community solar’s social, financial, and environmental benefits and encouraging its expansion.
While the deployment of community solar projects has long been on an upward trajectory, the Inflation Reduction Act in 2022 and numerous state-level incentives have accelerated the sector like never before. Notably, SEIA projects that the U.S. community solar market will add more than 5 gigawatts of new generation capacity in the next five years.
The Community Solar Advantage
Many U.S. households and businesses need help accessing the benefits of onsite solar because they rent, live in multi-tenant buildings, or have rooftops that are not conducive to solar due to shading or other mitigating factors. Community solar removes these barriers by developing local, medium-scale or middle-market solar facilities shared by multiple community subscribers, each receiving credits on their electricity bills or payments for their share of the value of the solar energy produced.
For property owners and developers, community solar offers new revenue streams, tax and financial incentive opportunities, and the power and efficiencies of scale. For example, developing one 5 MW centralized community solar project rather than 10, 100, or even 1,000 smaller distributed installations drives cost out of virtually every step in the development process, from siting and permitting to design and engineering, equipment procurement, construction, and operations and maintenance.
Ramping Up the Value Community Solar
Forward-looking states, municipalities, and communities are implementing progressive policies to expand the community solar model and accelerate the deployment of these projects. Concurrently, community solar project stakeholders are unlocking new revenue streams and supporting resilience and electrification goals with the integration of battery storage and electric vehicle charging assets, as well as energy efficiency measures with community solar generation systems.
For many commercial real estate owners, community solar offers stackable benefits across their portfolios. Potential long-term benefits include increased property values, lease revenue from onsite solar facilities, access to tax credits and accelerated depreciation, low-cost electricity, methodologies to meet or exceed ESG goals, as well as energy efficiency and operating cost reduction opportunities. In addition, power purchase and production guarantee agreements and third-party ownership options de-risk community solar projects.
Assessing and De-Risking Community Solar Opportunities
Determining and optimizing the potential benefits of community solar is property-specific and new territory for most commercial portfolio owners. Luminia offers a market-tested, straightforward path to assess and de-risk community solar projects.
Luminia’s community solar expertise combines a full suite of innovative financing solutions, an advanced technology platform purpose-built to analyze commercial property portfolios, and a national network of established, best-in-class development partners. As developers ourselves, we understand origination strategy, development best practices, entitlement, and interconnection challenges. We provide the ongoing support our partners need to do what they do best.
Doing Well By Doing Good
Community solar is a win-win scenario. It offers significant financial benefits to commercial property owners, developers, and other project stakeholders. It also provides substantial benefits to the communities themselves. Community solar expands access to solar energy, especially for low-to-moderate-income customers, adds clean electricity and resilience to the grid, and helps the nation reach its electrification and decarbonization goals.
Luminia is ready to generate a data-driven analysis of the value that community solar will bring to property owners and developers from a single commercial property to a regional or nationwide property portfolio.
Contact our project team to get started. There’s never been a better time to leverage the value of solar.