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Forthcoming Project in Washington State Illustrates Complexity of Community Solar

| Written by John Farrell | 2 Comments | Updated on Aug 27, 2012 The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/forthcoming-project-washington-state-illustrates-complexity-community-solar/
Complicated rubber band ball

Colorado just launched their long-awaited community solar gardens law (program subscribed in 30 minutes) and California is progressing on a virtual net metering law that could remove one of many roadblocks to community solar.  But the Vashon Community Solar Project in Washington State shows that doing solar community-style hasn’t become easy.

The Vashon project will be a small commercial scale (50-66 kW) solar array located at a recycling transfer station, with electricity generation reducing bills for King County and the state’s production incentive accruing to local investors (organized by a local nonprofit called the Backbone Campaign).  The project wouldn’t happen without Washington’s community solar production incentive, worth $1.08 per kWh (for community-owned projects with Washington-made solar modules, located on public property).

Prospective investors are forecast to make about $135 per year off their $1000 invested, enough to come out ahead by about $75 by the time the state’s incentive expires in 2020.  At that point, the project may be sold to King County, a third party (that may lease the system to the county), or donated to the county or a nonprofit organization.  Any of these options would result in some recompense for investors.

Some interesting twists for the project:

  • The nonprofit status of the project makes it ineligible for federal incentives, like the 30% tax credit.  On the flip side, it also means the project does not need a tax equity partner.
  • The use of Washington-made solar modules doubles the effective incentive to $1.08 from $0.54, but at the expense of a very high installed cost (over $8 per Watt).  This is likely due to the cost of the modules, as a typical installed cost for a commercial solar array of this size is closer to $4 per Watt.
  • Owners have to have a previous relationship to the Backbone campaign.  This probably means it is considered a “private solicitation” and not subject to securities regulation (indeed, the Q&A declares [pdf] “The CSP is not registered as a security with the Washington State Department of Financial Institutions”.

The Vashon community solar project shows – like the other projects featured in our 2010 report – how community solar happens for innovative citizens, but always against the odds.

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About John Farrell

John Farrell directs the Energy Self-Reliant States and Communities program at the Institute for Local Self-Reliance and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. More

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  • http://BackboneCampaign.org Bill

    John – thanks for the great article. Yes, this type of project is not for the faint of heart. BUT – if others are interested in utilizing the work we have invested in to replicate or produce a variation on our effort, we are more than happy to share documentation to save others time and money. Download documentation here: http://VashonCommunitySolar.org and for additional documentation, I can be reached at bill@backbonecampaign.org

    Bill Moyer
    Backbone Campaign
    206-408-8058

  • http://www.tangerinepower.com/edmonds Stanley Florek

    Big Congrats to the Vashon team that put this project together. It is hard, but it sets the stage for even bigger community energy action. I wanted to share with Bill and your readers another creative model, using the Cooperative structure common in Europe for community energy projects. Edmonds Community Solar Cooperative, just north of Seattle, is putting in another 20 kW of Washington-Made solar panels this month, adding on to a starter system they put on their town recreation center last year. They can keep on building new phases as long as there is community appetite and roof space left. See project info at http://solarwa.org/potm/october-edmonds-community-solar-cooperative-pioneers-new-cooperative-solar-model. Creative solutions are possible when these projects are funded by a feed-in-tariff-type program – and are nearly prohibited by the tax-credit based financing model common for most 3rd party owned systems in the US.