By Larry Aller, managing director, BlueWave Solar
At the start of 2020, the macro outlook for solar in the U.S. was strong. But then almost all 2020 market predictions were upended by the COVID-19 outbreak that continues to disrupt global markets and has caused hardships and massive levels of uncertainty for businesses, governments and individual families across the world. The impacts of COVID-19 on the solar industry have been widespread, leading to massive layoffs by residential solar companies and a downgrade of nearly 50% in commercial solar demand.
Despite these challenges however, community solar has remained an important and resilient segment of the U.S. solar landscape, continuing to provide a path to clean energy for residents, local businesses and investors in several states that have effective free-market community solar programs like Massachusetts, Minnesota, Colorado and New York. Given the flexibility, reliability and digital access afforded by community solar customer offerings, it has been especially well-equipped to handle the fallout from the pandemic. In fact, it may even emerge as a critical mechanism for residents and businesses to save money while helping states continue their march toward a clean energy future.
At BlueWave, we have seen several trends emerge in the wake of offices closing, community meetings being canceled and customers losing jobs, closing shops and changing their electricity use patterns. As a community solar service provider for several hundred megawatts of projects and a community solar project developer as well, we’ve seen the impacts of COVID on the community solar customer experience and the project development process. In both areas, there have been impacts, and many of those impacts are still being realized across the ecosystem. But we’ve also been strongly encouraged on both fronts by the adaptability and resilience of community solar during these unprecedented times.
Despite the drastic changes to everyday life that social distancing has created, community solar has matched well with several of the changes people and communities have had to make over the past few months. Some examples:
- More people are shopping online, which matches well with community solar’s digital, “from the comfort of your home” sign-up process.
- People who are hesitant about having workers come to their homes to install solar can still sign up and benefit from solar thanks to community solar’s “touchless” customer experience.
- Community solar gives people a straightforward, hassle-free way to save money while supporting non-polluting, local energy. That’s especially important as people tighten their budgets and spend more time at home.
- Community solar is community-centric, serving an increasing desire by customers to support local businesses and keep track of where their goods and services are coming from.
For all of these reasons, community solar has helped customers transition to the new normal brought about by the pandemic. Clear and reliable electricity savings are of particular importance during this time, helping to ease the financial burdens of COVID-19 and the associated economic upheaval and uncertainty.
Furthermore, the flexibility of community solar has given homeowners and businesses the freedom to adjust course and adjust or end their subscriptions if needed. Free cancellations have become a standard product feature — long gone are the days of rigid, 20+ year contracts. Many community solar projects have wait lists of customers that can be used to refill a project and maintain its ongoing viability.
While many homeowners have seen their electricity usage go up as they spend more time at home, it has been a different story for local business subscribers who have had to temporarily shut down or restrict operations. For these businesses, community solar service providers have been able to work with them to bank their community solar credits and postpone billing until they are used. We’ve also seen service providers work with some businesses to resize their subscriptions to better accommodate their new, reduced energy usage. While these changes can push project revenues out a few months, it is very much a net positive for both customers and project owners. These practices build strong and lasting customer relationships, reduce instances of default and attrition and avoid the cost of replacing customers. All of these combine to improve the overall performance of the project.
For local businesses that are shutting down permanently for reasons beyond their electric bill, early and transparent communication has enabled transition and replacement as soon as possible. Given the often-limited bandwidth at utilities recently, getting the necessary coordination started early to update subscriber allocations and either bring new customers on or upsize existing ones helps to maintain project performance.
In addition to savings for local residents and businesses, community solar projects also provide tax or PILOT revenues for the cities, towns and municipalities in which they are built. Many local governments and institutions have signed up as large-scale subscribers or anchor off-takers, receiving tens of thousands of dollars in savings on their electricity bills every year. This money stays local within the community and will increasingly be needed in the coming months as state and local governments face massive budget shortfalls.
It is a strange time to be writing about these topics. We are still reeling from a global pandemic and there are many challenges yet to come. It can be hard to be optimistic when so many things are uncertain. At the same time, we can be encouraged. I’m encouraged to see how homeowners and businesses have adapted and found creative ways to stay afloat and come together. I’m encouraged by the resiliency of community solar and thankful to see it bringing residents and small businesses much-needed savings right now. I’m encouraged to see solar projects still being built and providing jobs, and to see that many people are pushing to double down on investments in renewable energy. Most of all, I’m encouraged that solar and solar + storage continue to provide the affordable, reliable and clean energy we need to keep building a good future for our communities, our friends and our families.
Larry Aller leads BlueWave’s Strategy and New Markets work. He is an experienced cleantech executive with background building high-growth enterprises and developing and implementing strategy and investments.
Tell Us What You Think!