SunShare, a developer of community solar gardens, sees opportunity in Minnesota.
The Denver-based company is opening an office and hiring workers in Minnesota, and in 2015 plans to build large solar farms whose output will be shared by Xcel Energy customers who sign up to be subscribers.
These projects, known as solar gardens, are authorized as an option for Xcel’s 1.2 million Minnesota customers under a 2013 state law. SunShare built some of the first solar gardens in Xcel’s service region in Colorado.
SunShare founder and CEO David Amster-Olszewski visited the Star Tribune recently to talk about his plans.
Q: What is a community solar garden?
A: A community solar garden gives folks and businesses a way to use solar energy without having solar panels installed on their roof. Less than 20 percent of people in the country are able to install rooftop solar. The other 80 percent of the population, either businesses or homeowners, have trees covering their roofs, are leasing or renting space, or living in a condominium. To serve these customers with solar, we build solar farms on the edge of the community on large pieces of land. We install the panels there and we work with the local utility, in this case Xcel Energy, and sell customers the energy from the panels. People are able to choose to get energy from renewable sources, right on their existing utility bill, instead of from fossil fuel sources.
Q: What do customers own or get out of the deal?
A: Customers are simply buying energy just like you would from a utility company. Customers participate for several reasons. The first one is because they want to use solar energy, for personal environmental reasons or organizational mandates. The second reason is that we can compete with fossil fuels on price. So our customers pay either the same price they are paying for fossil fuels or in most cases a discount. Some community solar garden companies have upfront payments to buy a panel. We don’t. Most customers are used to paying monthly for electricity rather than up front.
Q: Do customers save money?
A: Definitely. In two ways. In Minnesota, we are selling solar at a discount to their electricity bill. In addition to that, customers are locking in their long-term rate for energy. Unlike fossil fuels, which continue to increase over time and have led to average utility rates increasing almost 5 percent per year across the country, we know what our prices are going to be because the sun is always free. We guarantee our prices to customers for 25 years. Customers just pay us a monthly fee for the solar energy they use. Every month they get their bill from the utility, with a credit for the solar energy their panels produced and delivered to the electric grid. When they receive that credit, they pay us for their solar energy. So if your bill was $100 before, you can cut your Xcel electric bill to $0 with solar energy, and pay SunShare $90. You’re paying less for solar than you would have paid for coal, and Xcel meets its state renewable energy targets through the program.
Q: How many solar gardens has SunShare built and where?
A: We’ve built two solar farms in Colorado. This fall we are building an additional eight in Colorado.
Q: How big are the gardens?
A: They are capped at 1 megawatt apiece. A megawatt can power an average of 200 homes.
Q: What does SunShare plan to do in Minnesota?
A: We are rapidly expanding in Minnesota. We think Minnesota is going to be a great market for community solar. So we plan to build community solar gardens next year.
Q: Why do you think Minnesota will be a leader in solar?
A: While Colorado was the innovator in community solar a few years ago, Minnesota has a program that is going to allow everyone to participate, by creating an unlimited market. So we could build as many solar gardens as we can sell to customers. In Colorado, there are capacity limits on the program. Minnesota took away the capacity limits. It’s really a free market, where you can have multiple firms competing and that’s a good thing. It is going to lead to a massive expansion of solar in the state.
Q: How did you get into this business?
A: I worked at a traditional solar company that installed rooftop systems. I saw that going solar was just too difficult for the majority of customers — finding a contractor, having the right roof, getting holes drilled into your roof. I heard about legislation in Colorado called the Community Solar Act in 2010. Here was a way to simplify and expand solar, and allow everyone to participate. I decided to move to Colorado and started SunShare under the first law of its kind in the country.
Q: Who owns SunShare?
A: SunShare is internally owned by employees.
Q: Who finances solar gardens?
A: A lot of banks finance solar deals, although most of the big banks only work with rooftop or utility solar installers and not yet community solar. U.S. Bank is a big one in the general solar market, and a local one as well. The typical ones you hear of are JPMorgan Chase, Wells Fargo, Bank of America and Merrill Lynch. You also see a lot of smaller, regional banks, and also a lot of solar companies investing in projects.