Shared Solar: A Shining Opportunity for Commercial Real Estate
(Grant Cooke is CEO of Sustainable Energy Associates and coauthor of The Green Industrial Revolution: Energy, Engineering and Economics and Smart Green Cities.)
New York is among the top 10 states for solar, yet a majority of consumers and property owners have historically been “locked out” of the market. In particular, commercial real estate has been considered a challenging environment to implement solar projects. Despite New York’s vast amount of available roof space, conventional business models for solar just don’t fit when the asset owner is not the primary consumer of electricity.
Fortunately, a new program called Shared Solar is creating opportunities for asset owners to monetize their roof with clean energy production – even if they are not the ones paying electric bills. Companies are emerging that will facilitate this process, enabling asset owners to “host” solar panels and reap a rental income for use of their roof.
The US Dept. of Energy recently estimated $8-16 billion will be invested in Shared Solar by 2020,[1] and New York is well positioned to be among the fastest growing markets.
Last year, Governor Cuomo announced his Renewing the Energy Vision (REV) initiative, saying “For more than 100 years, the generation and distribution of electricity in New York has been largely unchanged, but today we taking a giant step from the status quo and leading the way on energy modernization... introducing and embracing information technology and clean energy solutions...” This means “moving to a more market-based, decentralized approach” added Richard Kaufman, NY Chairman of Energy and Finance.[2]
New York’s version of Shared Solar is called Community Distributed Generation (CDG), and enables credit for electricity produced on a commercial rooftop to be allocated to the electric utility bills of consumers.[3] The program is offered by all the utilities, except Long Island and municipal districts.
Shared Solar is a smart and simple advance in policy that opens new opportunities in clean solar power across all sectors: new business models that enable solar in previously challenging commercial real estate environments, new subscription options for consumers, and new ways for communities to share the benefits of solar electricity production.
[1] National Renewable Energy Laboratory, “Shared Solar: Current Landscape, Market Potential, and the Impact of Federal Securities Regulation,” April 2015: http://www.nrel.gov/docs/fy15osti/63892.pdf.
[2] “Governor Cuomo Announces Fundamental Shift in Utility Regulation,” April 24, 2014: https://www.governor.ny.gov/news/governor-cuomo-announces-fundamental-shift-utility-regulation.
[3] For more detail, see: http://ny-sun.ny.gov/-/media/NYSun/files/Contractor%20Resources/Community-Distributed-Generation-Project-Developers.pdf.
