Bulk purchases for homeowners often mean a trip to Costco or Sam’s Club for items several times larger than they’ll find at a typical department store. Buying something in larger quantities can cost less for a customer in the long run when compared to purchasing that same item as a single or smaller unit.
That concept also applies to residential and small commercial customers trying to install solar on their properties. While the cost of a solar project has dropped significantly in the last decade, it is still an investment of tens of thousands of dollars, even at a small scale. So, businesses, organizations and certain state and municipal governments have devised group purchasing programs and cooperatives to give smaller customers the same purchasing power that developers have when building larger solar projects.
These solar purchasing cooperatives reduce the cost of a PV array by recruiting enough people in a community to go in on a multi-project agreement — like that three-in-one box of cereal. Combine that with the reinstated solar investment tax credit included in the Inflation Reduction Act, and customers can significantly subsidize the cost of a PV project.
Types of solar purchasing cooperatives
There are several styles of solar purchasing co-ops operating in the United States. Each relies on building group interest in pursuing solar projects on multiple properties in a neighborhood, city or community, but uses different organizing entities to build the solar campaigns.
Solarize programs engage with local governments and community organizations to back development of these solar projects. Certain states and cities have their own Solarize programs to support interested residents. Those involved apply for grant funding in addition to applicable tax credits for solar installation, and the remainder of the cost is covered by customers.
The first Solarize campaign started in Portland, Oregon, in 2009. A group of residents sought solar installations for their neighborhood and “imagined that if they could organize a group of neighbors to ‘go solar’ together, they could collectively make an informed purchase and negotiate a volume discount,” according to The Solarize Guidebook from the U.S. Dept. of Energy.
Solar United Neighbors (SUN) has a similar origin story. The group started as a grassroots effort by founder Anya Schoolman, her son Walter and his friend Diego, to see if it was feasible to have solar installed on their home in Washington, D.C., in 2007. That curiosity turned into a local purchasing cooperative, resulting in new solar projects on 45 homes in the neighborhood.
“The boys were in middle school at the time, and they went up and down the neighborhood and canvassed that group. A lot of the lessons that we took from that we carry forward to today,” said Ben Delman, communications director of SUN.
Another group purchasing program, Solar CrowdSource, formed after founder Don Moreland witnessed Solarize programs playing out on the West Coast and wanted to bring similar tools to his home state of Georgia, where solar incentives were lacking. For the last eight years, Solar CrowdSource has brought solar projects to new communities by providing a framework and platform to host cooperative purchasing campaigns like Solarize.
“We are still plugging along with pretty much the same model, and that is recognizing that a lot of communities want to make solar more affordable and more accessible for homeowners and business owners, but to run a Solarize program, they don’t have a lot of the resources, the time, or even the subject matter expertise,” Moreland said.
There are a lot of shared practices among organizations like SUN and Solar CrowdSource, as well as state- and city-led Solarize programs. The first step for each is engaging with and educating the community.
Rallying a community around solar
That first Solarize program in Oregon wanted to create a group of savvy solar consumers capable of negotiating for a fair construction contract, which remains a primary goal for similar purchasing campaigns. The entities organizing these campaigns aim to garner enough support in a single community to create stronger purchasing power, but they also want the people participating to be informed on how the technology works, which can benefit them and solar installers.
“You’re getting a large group of interested and — maybe most important from the conversations I’ve had with installers — educated solar customers, so that we’re able to maybe save some of the time that you would have to spend walking people through the technology, the process and all that stuff,” Delman with SUN said. “By having a large group, we’re creating economies of scale that you’re having to do less marketing, you’re having to go to less permitting offices to pull permits. And so, saving some of that overhead, we’re hopefully helping installers grow.”
Groups will organize community outreach events like meetings, informational sessions, open houses and workshops, and market the program through websites, flyers and social media. In addition to the solar technology, those community events can cover topics like financing and project options for commercial, nonprofit or low-to-moderate income homes.
After a group of stakeholders for the purchasing co-op is formed, the campaign must issue a request for proposals (RFP) to find a contractor willing to install multiple small-scale solar projects. If the program is run by organizations like SUN or Solar CrowdSource, they will handle the RFP process; otherwise Solarize programs can appoint a committee that will review and negotiate these contracts.
Procuring the hardware used on these solar projects is the contractor’s responsibility, but what components are selected is discussed and negotiated during the RFP period.
“It’s not always a race to the bottom,” Moreland said. “It’s about getting the best value and the highest-quality equipment for the lowest price. I’ve probably said that a million times, but that’s essentially what we’re trying to accomplish.”
Each project contract is still between an individual homeowner and the solar contractor, but the group selects the installers to establish that bulk installation rate.
The length of a co-op program can range from several months to a year depending on the group that organizes it, the permitting and policy environment within a community, interconnection queues and hardware lead times.
Dennis Kill, a homeowner based in Westchase, Florida, a suburb of Tampa, participated in a SUN co-op purchasing program in 2019. He and his wife were already speaking to contractors to have solar installed on their home and heard of the SUN campaign in their area.
“It was very simple, because you literally just told them you were going to put your name in the hat,” Kill said. “Then they did all the work.”
SUN provided details on the several company proposals it evaluated and rationale for the contractor chosen to complete these projects. After all that was secured, participants just had to coordinate when the installer could start the project.
As solar expands across the country, so do co-op purchase programs. SUN and Solar CrowdSource are always accepting inquiries from new communities seeking group solar installations.
After a program is complete and solar is installed on many new properties, the people that formed the co-op have new knowledge about the technology, how it’s installed and the policies that either encourage or deter further development in their community. Delman even finds that co-op members often become new advocates for the solar industry.
“We help people go solar, we bring them together, we help them create community solar supporters, and then we’re able to activate them to fight for policies to help more people go solar, which ultimately helps installers’ bottom line,” he said. “You’ve got this really educated, active, interested group of people who are ready to go to the Public Service Commission and say, ‘Hey, get these utilities in line.’”