Community Solar – The Operational Challenges
Solar energy has continued to be one of the fastest-growing energy sources globally. 2020 saw record-breaking levels of solar PV growth with 23% over 2019 – accounting for 3.1% of global electricity generation – third behind hydropower and onshore wind1. Various factors have contributed to this growth, with affordability being the most significant.
Due to technological advances and regulatory policies, solar power has become competitive with more traditional sources of energy with this trend is expected to continue. As a result, community solar projects offered by Community Solar Service Providers (CSSP) have particularly seen a jump in growth.
This blog examines the operational challenges faced by the CSSPs in the United States. Many States are in the early stages of determining the regulatory framework required for community solar projects, and policies vary widely.
To read more on the state of regulations, see nrel.gov
Challenge 1: Making Sense to the Customer
Acquiring customers can be one of the most significant challenges for community solar projects and companies. State regulations often impose eligibility requirements in terms of the physical proximity of customers to the solar project location, requiring a minimum number of subscriptions to be sold, and there are caps on the participation levels by any individual customer. These restrictions effectively reduce the size of the addressable market, therefore, prolonging the sales cycle.
Once the requisite approvals have been obtained, the project needs to be built and commissioned. That comes with its own set of challenges beyond engineering. The National Energy Code (NEC) writes and amends the standards of operation to ensure that the solar installations work well with grid reliability and resilience. The net result is that it can take up to 24 months between enrolling the first customer and producing the first kWh of electricity.
Challenge 2: The Tax Calendar
The next challenge CSSPs face is the tax calendar. To ensure tax credits apply within the current year, many community solar projects rush to finish before the year’s end, which means the beginning of winter when solar energy production is at its lowest. This reality leaves the highest number of generated credits to the height of summer. The delay leaves customers unsure of the cost impact they will receive and possibly becoming unhappy with their seemingly low savings.
Challenge 3: Assembling the Bill
The next challenge is to assemble the customer bill. Currently, there are no standardised transactions for the data exchange between the utility responsible for the enrolment of the customer, the metering data and billing, the transmission and distribution charges (T&D), the supplier who is responsible for the energy charges, and the CSSP accountable for the solar project subscriptions.
The customer credits are also calculated based on complicated utility tariffs – and often, CSSPs are not privy to the details of the utility bills. As a result, the work required to add all relevant pieces for the correct calculation of the energy bill is substantial.
Some CSSPs have had to rely on methods using multiple Microsoft Excel spreadsheets that are prone to human data errors. The combination of data issues, structural deficiencies of the billing systems, a lack of data interchange standards, and ad-hoc operational procedures creates a chaotic environment, leaving the customer with a confusing and incorrect bill.
Hansen CIS: The Opportunity for CSSP Digital Transformation – Become the Next Experience Company
Opportunity 1: Customer Acquisition Solved
While the various state regulations can dampen the community solar buy-in, the US Department of Energy – Solar Energy Technologies Office (SETO) is working on expanding access to affordable community solar to all American households by 20252. So even though acquiring customers for community solar projects can be difficult, there is an opportunity for scale, and Hansen CIS can help. Hansen CIS provides the people and systems necessary to accelerate the sign-up process, allowing CSSPs to sign on customers confidently.
For decades, Hansen has served energy and utility companies and continues to develop market-leading solutions that support community solar projects and CSSPs. With the background knowledge and extensive experience, Hansen is a logical choice to help CSSPs target the right customers.
Opportunity 2: Forgetting the Tax Calendar
While installation projects may drag on due to unforeseen circumstances, Hansen’s people and experience ensure a faster time-to-market with the ability to scale the business as needed. In addition, Hansen CIS can integrate into existing architectures to speed-up implementation, with access to data on best practices for optimised customer service.
Hansen customer Hampshire Power is a full-service energy monetisation company that connects renewable energy developers and owners with end-user commercial and industrial customers. With Hansen CIS, Hampshire Power can scale its operations and reach more customers, ensuring a sustainable future.
Opportunity 3: A Best-in-Class Customer Experience
Assembling the bill does not need to be a hiccup for community solar projects. Hansen CIS works to combine all the pieces required to provide customers with an accurate and easy-to-read bill each cycle. In addition, the systems for customer engagement, optimised processes, and the data and people to help retain customers and overcome churn are included.
Continue reading about Community Solar and Hansen CIS, a part of the Hansen Suite for Energy and Utilities to learn more.