For community solar buyers, a market of choice and confusion

Robert Caverly and his wife reflected on the potential benefits of a community solar farm. They like the idea of ​​saving money while supporting green energy, but don’t have a roof suitable for solar panels.

So it was about time a man from a group called Community Solar Advisors came to their home in Chelsea recently. He asked if they wanted to subscribe to electricity from a project under development in the nearby town of Augusta.

The Caverlys have been told they could save up to 15% on their electric bills for 20 years, depending on their credit rating. They could also cancel the contract at any time, with 90 days notice.

Robert Caverly said last week that the couple are considering the offer. But they want to study the fine print, especially the cancellation policy.

“It’s one thing to take your word for it,” he said. “It’s another to see the paperwork. This element, the exit policy, can have the most influence on our decision. “

Individuals and small businesses in Maine are responding these days to multiple solicitations from businesses wishing to subscribe to community solar projects. They receive emails, see offers on social media, and, as pandemic restrictions ease, come face to face with salespeople.

And although there is no official count, it’s a safe bet that tens of thousands of Mainers have already signed up for community solar. A benchmark: Boston-based Nexamp Inc., which has at least 10 projects under development in Maine, told the legislature last March that it has more than 9,000 subscribers.

But for the Caverlys and thousands of other Mainers, the winning double message of paying less on your electric bill while supporting local, clean energy raises many questions. Among them:

Are these community solar offers some kind of scam?

What is the difference between a competitive energy supplier and a community solar project?

Why do some projects offer 10% savings, while others say 15%?

What happens if I want to cancel my contract?

What’s the best way to compare different offers?

In short, community solar is not a scam. For many Mainers, this can be an opportunity.

But subscriber-based projects, like the one marketed to Caverlys, represent a new business model in Maine. And while marketers try to make the process easier, the people who sign up enter into a legally binding contract.

Unlike a competitive energy supplier, which becomes your home’s electricity supply, a community solar company applies a kilowatt-hour charge credit to your monthly utility bill. The credit reduces the payment you owe your electricity supplier, which for the majority of homes in Maine is coordinated through the Utility Board’s Standard Offer Provision process.

Discounts in Maine range from 10% to 15%, based on market competition and proprietary financial calculations. They only apply to kilowatt-hours used and not to fixed charges. The duration of the contracts varies from month to month up to 20 years. Cancellation conditions also vary; many have no fees but require specific time notice, say 90 days.

CONSUMER PROTECTION RULES

To give some bite to the state’s oversight of these provisions, a bill going through the Legislative Assembly, LD 507, would give the PUC the power to adopt consumer protection rules around community solar energy. These rules would mirror those in place for competitive energy suppliers. They would require certain disclosures and empower the PUC to impose penalties for violations.

Maine policy makers have been made aware of the potential for abuse by recent years’ experiences with the competitive household energy market. Last year, Electricity Maine agreed to a $ 14 million settlement in a class action lawsuit alleging fraud and deceptive practices in marketing power contracts to state electricity customers.

And as consumer protections and online tools evolve to help Mainers assess community solar power, there is no central resource or clearinghouse. There’s no one-stop-shop for finding the best deal, according to Kiera Reardon, consumer advocate at the Office of the Public Advocate.

“I think there’s a lot of interest,” Reardon said. “I also think there is a lot of confusion.”

These factors led the public defender to create a information page to help residents navigate community solar. It includes a link to the PUC webpage where solar sponsors and marketers need to register with the agency. However, the list is an imperfect tool – mostly simple contact information for hundreds of people. A question of whether a company has been the subject of enforcement action elsewhere in the past five years receives an overwhelming “no” answer.

A new online tool called Community solar market allows users to search for available projects by zip code. It offers a unique way to compare features, like when a project will go live and an estimate of monthly dollar savings. But his presentation is limited to projects currently working with Energy Sage, the Boston-based company that runs the website.

“It’s a useful tool, but it’s a for-profit website,” Reardon said. “It comes down to what you expect from community solar power. “You have to do the work to verify the companies. This new market will involve steps on the part of the consumer. “

AVALANCHE OF PROJECTS

All of this activity is tied to two-year laws designed to encourage and develop solar development in Maine. While some aspects are currently under consideration by the legislature and could ultimately reduce the developer incentives that drive the market, the net effect so far has been to trigger an avalanche of community solar projects.

Until recently, these companies depended on people investing thousands of dollars up front in part of the project and receiving all the benefits of power generation. But today’s explosive growth is driven by an increasingly popular business model, in which clients do not invest. They simply agree to receive a kilowatt-hour credit on their monthly electricity bills for a share of the electricity produced, often the production that matches the annual demand of their home. As a reward, they get a reduction in the cost of their existing supply.

Developers and marketers must register their clients months before projects launch. This gives the project investors confidence that there is a large enough customer base to support production. That’s why Mainers is getting all of these solicitations now, even though some subscription projects might not go live for about a year.

HELP ON THE SITE

One way to see how this dynamic is playing out in Maine is to explore the Community Solar Marketplace website.

For example: a person lives in Portland. Their average electricity bill is $ 100 per month or $ 1,200 per year. Entering this information brings up a screen with five potential projects to choose from in the Central Maine Power service area.

A project in Rumford is already operational. It has a production capacity of 3,900 kilowatts and is 59 percent subscribed, with 1,600 kilowatts to fill. A banner reads: “Fill quickly.” Typically, according to Energy Sage, 150 homes can be powered by 1,000 kilowatts (1 megawatt) of community solar power.

This project offers a 10% credit on the kilowatt-hours used, an estimated savings of $ 96 per year. There is no cancellation fee, but the developer will need to be contacted for specific conditions.

The other four projects are located from Poland to Waterville. Each offers a better discount, 15 percent, or about $ 144 per year. But none are operational yet. The estimated launch dates are four months to one year.

The website offers advice on how to compare projects. He notes that customers will start receiving two monthly bills – their typical electric bill plus the new solar project.

The site also contains reviews from customers, including those from other states where the developers have an operating history, such as New York and Massachusetts. Some companies get a badge called “top rated”, although not all reviews are positive.

“Historically,” said Spencer Fields, director of market strategy at Energy Sage, “the community solar market has been very opaque. We want to make it accessible, but also transparent. So you can compare several options. “

But Community Solar Marketplace has limits. Energy Sage makes money every time they connect a buyer to a project on their website. But this Portland resident who saw five options likely has several other choices. Because Energy Sage has not yet established a relationship with all active developers, these options are not displayed on this website.

Fields said he expects offerings to become more competitive as the market evolves. Some companies already have promotions, like $ 50 gift cards, to attract customers.

INCREASING COMPETITION

If Robert Caverly enters his Chelsea zip code on the Energy Sage website, he’ll see the same handful of options a Portland resident offers. But the fact that a living person knocked on their door promoting a project not listed on the site is a testament to the growing competition for clients in Maine.

Seth Reynolds was that sales rep. He said he was a private contractor working on commission for Community Solar Advisors USA, a national marketing company specializing in selling subscriptions to local projects.

For the Caverlys, Reynolds started a solar farm off Route 3 in Augusta through a subsidiary of Syncarpha Capital, a New York-based private equity fund that finances and builds solar projects. The 7,000-kilowatt project offers a 15% savings on a 20-year contract with no cancellation fees, according to Syncarpha’s website. It shows 544 remaining customer places.

Reynolds said he’s been more successful selling solar power in areas where other neighbors have already subscribed, perhaps a reflection of word-of-mouth. A constant challenge, he said, is that many people remain confused as to the difference between this offering and competing electricity providers. Others remember the media coverage of Electricity Maine and are suspicious.

“It’s a big obstacle,” he said. “But I love my job. I try to guide people as best I can. “


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