Shared renewable energy arrangements with community solar leading to lower electricity bills for both subscribers and non subscribers"/>
Shared renewable energy arrangements allow several energy customers to share the benefits of one local renewable energy power plant. When the power is supplied strictly by solar energy, it is called ‘COMMUNITY SOLAR’. The shared renewables project pools investments from multiple members of a community and provides power and financial benefits in return
Illinois’ new community solar program allows Ameren Illinois and ComEd electricity customers to enjoy the benefits of solar energy, even if they can’t install solar panels on their own property. Many people can’t afford to install solar panels on their own homes, don’t have space or enough sun, and/or they are limited by local zoning laws. Community solar allows interested customers, or “subscribers,” to help fund a solar installation—also called a community solar garden—in their area, and in return get credits on their electric bills.
For years, Illinois consumers with rooftop solar panels have been able to receive credits on their electric bills by sending excess renewable energy back to the power grid—a benefit called “net metering.” Community solar projects would utilize “virtual net metering.” A “host customer”—such as a home, business, or school—would recruit neighbors to invest money in a solar energy project. The neighbors who invest would then share electric bill credits generated by that project, based on the level of their financial contribution.
Until now, CUB and other advocates who worked to establish community solar programs in Illinois ran into roadblocks. However, the Future Energy Jobs Act, historic state legislation passed in December 2016, calls for 400 megawatts (MW) of community solar projects to be developed by 2030.
Under Illinois’ community solar program, “subscribers” can enter into an agreement to help fund a solar energy installation in their community—on the rooftop of a local school or community center, for example. Any entity could organize a community solar project, including individuals, community groups, businesses, even utilities or alternative suppliers. Each subscriber then receives a credit on the supply section of his or her monthly electric bill for the electricity that was generated by the installation, in proportion to the size of the subscription they purchased.
For example, say you used 1,000 kilowatt-hours (kWh) of electricity in a month, and your share of the community solar project produced 200 kWh of electricity. That means you would receive a credit on your bill amounting to your supply rate multiplied by 200 kWh of electricity. Ultimately, you would only be responsible for paying the per-kWh electricity rate for the other 800 kWh.
You can subscribe to several solar panels in an installation. Depending on the kind of community solar plan you sign up for, you could pay one upfront fee, a monthly subscription fee, or a combination of the two.
Lower electric bills for subscribers: Customers who participate get credits on their bills for the electricity generated by the solar installation.
Lower electric bills for non-subscribers: Adding renewable energy to the power grid increases electricity supply, lessens the need for expensive, polluting power plants, and lowers market prices for all residents.
Greater reliability: By encouraging generation near the point of consumption, solar reduces strain on the grid, and that reduces system maintenance and repair and prevents costly “line losses,” in which electricity is lost along the transmission and distribution system.
Reduced peak demand: Community solar adds more electricity to the grid, which would help reduce demand during peak times—when prices skyrocket and power plants produce the most pollution. A 2007 Brattle Group study found that shaving peak demand by just 5 percent could lead to at least $35 billion in savings nationwide over the next two decades. Reducing line loss and maintenance/repair costs is especially beneficial during these peak times.
Added financial benefit through selling Solar Renewable Energy Credits (S-RECs): A Renewal Energy Credit (RECs)—a measure of the environmental benefits of renewable energy—can be bought and sold on the energy market. Under the Future Energy Jobs Act, the state will purchase a community solar project’s RECs to meet Illinois’ renewable energy goals. (See below: What are S-RECs?)
Consumer education: Homeowners involved in solar tend to be more aware of, and therefore more conscientious about, their energy consumption. This awareness provides lasting benefits to all consumers since reducing energy consumption lowers costs for all consumers.
Community improvement: Community solar installations make efficient use of space that would otherwise be wasted, such as the rooftop of a school, or an eyesore, such as a “brownfield”—a former industrial site that remains vacant because it has environmental contamination. In fact, a community center could use the financial benefits of such a program to help fund a new roof to hold the solar panels.
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