The community solar market is set to take off. According to SEIA, 1,294 MW of community solar were installed in the United States through Q3 2018, with much more coming thanks to favorable legislation in progress across the country. For every megawatt, there are numerous off-takers, from a few large businesses to hundreds of individual residents. Those subscribers need to be acquired, screened, signed up and sent a monthly bill like they’d get from their investor-owned utility.
Developers who don’t want to perform the new administrative tasks that come with community solar can turn to customer management software solutions instead. Software platforms have to serve the needs of the two major stakeholders in community solar projects — both the project developers and the subscribers.
Taking burden off developers
Jason Kaplan, general counsel and director of operations for community solar customer management marketplace Powermarket, said customer management software is crucial because community solar comes with many challenges that developers aren’t used to in traditional commercial-scale solar projects.
“When you convert a 2-MW solar project into a 2-MW community solar project, it brings forth a large amount of administrative and management hurdles that they had not previously experienced,” Kaplan said. “There’s a need for the management of the off-takers in community solar that you don’t see in other segments of the industry, and that’s where we really see we play a great role.”
Some developers may choose to internally manage customers, but it’s often advantageous to leave that work to experts. A representative from customer management software provider Ampion identified three reasons a developer might wish to outsource this aspect of community solar farms: They may lack the internal resources needed to develop their own software due to either expertise or expense; they may want to devote their time to expansion and new development instead of administration; or they may just prefer to outsource these duties to specialized companies to ensure it’s cost-effective and scalable.
Kaplan said companies typically come to Powermarket for help filling subscriptions, but they soon realize that Powermarket can also take care of customers through the life cycle of the project. It’s important to help subscribers feel connected to the project, even if it isn’t physically on their roof, so they’re motivated to remain subscribers.
“It’s engaging them in a way in creating a sticky subscriber so they feel really connected to the project, and then it’s just the ongoing management of those subscribers,” Kaplan said.
Right now, Powermarket manages 40 MW of community solar mostly in New England, but the team is paying close attention to other states primed for community solar growth.
Customer management platform Solstice, which manages community solar projects in New York, prides itself on having a high level of transparency with its developer clients. Developers can easily view the status of subscriptions at any point via their online dashboards. Andrew Alayza, director of marketing, said he’s heard “horror stories” of solar developers being sent subscriber information over unencrypted mediums like email or Google Sheets, or only receiving subscriber updates during weekly phone calls. The dashboard ensures developers are up to date at all times without compromising the cybersecurity of subscribers.
Powermarket, Solstice and Ampion are all stand-alone software providers. Another customer management platform called SunCentral was created by solar developer Pivot Energy. Pivot builds commercial-scale and community solar projects.
“Although this is a relatively new service offering for Pivot, we come at this with hundreds of megawatts of experience where projects didn’t work and subscribing was hard and management was difficult. So everything that we do is with an eye to that,” said Kacie Peters, director of business development for Pivot Energy. SunCentral currently manages about 20 MW of projects in Colorado.
Daniel Merkle, business intelligence manager for Pivot Energy, said knowing these pain points helped him and the team develop the ideal software solution to use internally and sell to other developers. Peters said having a development arm also helps SunCentral price its software more competitively. The company is hyper-aware of the economics of community solar at all times, so it’s always trying to align its software with the return on investment that developers need to see.
Some solar developers may instead prefer to contract with standalone software companies to avoid doing business with their competition, but Peters said Pivot adheres to the “rising tide lifts all boats” philosophy and is dedicated to doing a good job for all clients.
“People ask me, ‘Hey, are you going to fill up your own project before you fill up ours as far as acquisition? Or are you going to be more responsive to your customers versus ours?’ and that’s not the case, because we know we need to do a good job in order to continue to make money with SunCentral services. We can’t afford to be a bad product,” Peters said.
Kaplan, however, thinks stand-alone software providers have an advantage over developer-run platforms like SunCentral. He thinks Powermarket’s singular focus makes the company the best at what it does.
“We know there’s a need to provide really a core functionality around the management of subscribers and these projects,” Kaplan said. “We serve in that role distinctly for our developer clients.”
The fees developers must pay vary among the platforms. Solstice charges developers on a cost per watt basis while SunCentral charges per project. Kaplan said Powermarket typically charges per watt because that’s how developers model project financials, but it’s flexible and can charge per project or per subscriber if the developer prefers.
Community solar is still a relatively new concept for many people. Kaplan said consumer education is an important part of the job when Powermarket sets out to recruit subscribers to an array. The menu of possible subscription options on its website strives to break down the different community solar project offerings into the simplest terms possible. Consumers can scroll through the most important traits of the projects as if they were browsing a car dealership’s website, including a photo and developer name if the developer so chooses, subscription status, contract type, utility territory and cancellation fees.
The other two platforms do most of the subscriber matching behind the scenes in an effort to simplify the customer experience. Solstice was started with the goal of making community solar simple for customers.
“At the end of the day, we’re charging someone. That’s never a fun thing to do. So the least that we can do is make that a bit more seamless,” said Alayza.
Solstice is a mission-driven software company committed to making solar accessible for every American. Along with taking on the technical and administrative duties of community solar farms, the company dabbles in policy and advocacy work. When Solstice first launched, the norm for community solar contracts was a 750 FICO score, 5% bill savings and very long-term contracts.
“The average marriage in America lasts about eight years, but I think the weird thing is developers expected folks to sign up for a 25-year contract,” Alayza said.
The company makes every effort to only manage community solar projects that are fair and reasonable for customers.
“We have to be the biggest advocates for our customers,” Alayza said. “We actually won’t work with a project if we don’t believe it’s good enough for the customer.”
Solstice also created an alternative to the FICO score to help expand access to community solar. Its solution, called the Energy Score, assesses many data points, including utility payment history, in order to see whether prospects reliably pay their utility bills. It offers this alternative Energy Score assessment to all developer clients in lieu of a FICO score and has found that about half choose to use it. Solstice only currently manages projects in New York but hopes to bring the Energy Score into new states as it expands.
Since Solstice is picky about the clients it takes and prioritizes the best deals for customers, the matching process should be relatively simple.
“We do acquisition at a very hyper-local level, so by the time they see an offering, we already have pre-matched them with a solar farm near them,” Alayza said.
SunCentral also automatically matches subscribers to projects using an algorithm after they indicate preferences on contract length, percentage of cost savings and more. Project owners can also identify their preferences for the types of subscribers they’re looking for — for example, a certain number of short-term and long-term contracts.
“There’s a lot going on behind the scenes, but to the customer, it’s intended to feel very smooth. To the admin, it’s intended to ease a lot of what would otherwise be manual challenges,” Merkle said.
As more community solar projects come online thanks to favorable policy measures, customer management software will become increasingly necessary. The best software solutions will be those with the greatest understanding of the different community solar regulations across the country.
“Right now, we’re at 19 states with programs. What happens when we’re at 30 states with programs?” SunCentral’s Peters said. “You’re really going to need to know more from an in-depth policy perspective — how the programs work, how the credits are allocated, what kind of risks are there, what kind of products can you even offer and how [to] price the management.”
The early entry software providers may have an advantage in this growing market, but there’s sure to be many more customer management software solutions popping up to compete for developers’ business in the coming years.