The effects of the COVID-19 pandemic have touched almost every household, business and industry across the country. Renewable energy, and solar especially , has not been spared from the impacts of the economic downturn and collective uncertainty. Market volatility, liquidity concerns, rising unemployment, declines in consumer discretionary spending, supply constraints and worker layoffs are challenging companies throughout the provision chain.
One category, however, is showing signs that it’s well positioned to weather the negative effects of the pandemic — community solar.
Before the COVID-19 crisis, community solar was the fastest growing segment of the solar industry. Towards ending of 2019, the country had Mega-Watts of energy generated from community solar built and recently another ones have been commissioned. And while all parts of the industry are seeing some level of short-term pain, persistent consumer demand for solar PV, community solar’s cost competitiveness, and new market expansion are imparting a healthy degree of optimism for 2020 and 2021.
Why is that this relatively new model of distributed generation solar showing more resistance to the impacts of a recession? Community solar’s fundamental propositions of affordability and accessibility gives a definite approach an economic decline. It increases access to the advantages of unpolluted energy, and it offers a comparatively low risk investment option.
A Broader Market, Lower Lisk
Despite a growing appetite for clean, renewable energy, installing solar PV isn’t a viable option for some residents and businesses just because they have inadequate roof space for a system , their roofs are shaded or not properly oriented for solar production, they rent their property and don’t have access to the roof, or they lack the financial resources to take a position in an on-site system.
The community solar model removes these barriers and opens the advantages of solar to anyone who receives an electrical bill, including lower-income residents, businesses, municipalities, schools and non-profits.
Community solar’s signature advantage is that a solar-ready roof — determined by on-site inspections and irradiance studies — isn’t required to participate. Educating prospects and converting them into community solar customers may be done seamlessly online at a fraction of the price compared to rooftop solar.
There also are clear financial benefits to participants. Many community solar programs don’t require an upfront cost to participate and permit customers to offset all or only some of their electricity usage. Most programs offer rates that are less than what participants pay utilities and deliver monetary credits for participants’ share of an array’s solar production directly on their utility bills, lowering their monthly utility costs right out of the gate.
For project financiers and asset owners, community solar farms are relatively stable and low-risk investments. As a result, we are seeing momentum in capital markets shift faraway from fuel interests and toward renewable, with medium-scale distributed generation playing a big role. Most community solar projects have utility off-takers with long-term power-purchase agreements and are anchored by commercial participants with commercial-grade credit, which implies consistent and stable returns. Some utilize aggregators that bring buyers of all kinds and sizes into one procurement, achieving mutualist economies of scale and risk management.
Resilience and Growth
Market development — robust before the pandemic with community solar programs recently initiated or expanded in two places in Bayelsa has continued during the crisis.
This trend may continue in 2020 as states view investing in renewables as a part of their economic recovery efforts, and more policymakers, regulators and advocates learn and adopt best practices to balance the market’s diverse interests and community solar’s economic viability.
While actuality scale of the impact is yet to be seen, largely obsessed on the length and severity of the economic downturn, the fact is that this crisis has amplified the necessity to accelerate our transition to broadly accessible and affordable renewable energy. As more businesses, consumers, schools and municipalities address community solar for its simplicity and adaptability , and more developers and financiers pursue predictable, steady investments, its value during this mission will still grow stronger.