Comparison shopping could unlock community solar

Community solar is a growing, important segment of the solar industry that still struggles at efficiently gathering said communities. At last count by NREL, community solar projects are located in 39 states, and 20 states have policies that support it. That’s all pretty good! But about 74 percent of the total market though is concentrated in the top four states: Minnesota (663 MW-AC), Florida (593 MW-AC), Massachusetts (436 MW-AC), and New York (243 MW-AC).

Community solar is a “push” market still. Intensive marketing and education is needed to get potential customers. That is expensive. Customers are also needed in bulk during construction, before a project goes live — somewhat of a trust fall by the developer.

Two other customer acquisition challenges:

Potential customers are fatigued by years of other “green plans” and RECs marketed by other companies that end up pricing renewables at a premium rather than saving ratepayers money.In its infancy, the community solar industry was a culprit in peddling bad deals too. Long, legal-heavy contracts that locked customers into 20 year deals.

“I remember reading some of these legalese-heavy community solar contracts years ago, and my head was spinning for a 10 percent discount,” says Vikram Aggarwal, CEO of EnergySage.

Community solar is essentially in the same predicament that rooftop solar was 10 years ago, but fortunately, it won’t need a decade to catch up.

Marketplace Proves Itself

EnergySage sees this potential. EnergySage, as you may know, is the top residential solar marketplace in the U.S. This year, the company opened up a Community Solar Marketplace to serve the same role, a conduit to connect solar developers more efficiently with interested customers. To date, consumers in nine states (CO, IL, MA, MD, ME, MN, NJ, NY, and RI) can choose from 70 projects currently listed on the Community Solar Marketplace, totaling over 300 MW of capacity.

“We are focused on customer acquisition, helping people subscribe and providing feedback to developers,” Aggarwal says, “We make it easy for consumers to find projects and see how they compare.”

The comparison function is crucial. A customer hits the site, enters their ZIP code and is presented with all of the potential options nearby with transparent terms such as discounts, termination clauses, and even customer reviews. Project listings include other attributes too, like pollinator-friendly vegetation or dual-use.

The conversion rate of the marketplace thus far has proved its effectiveness, with Aggarwal placing it “higher than what we were expecting and even multiple times higher than what we’ve seen on rooftop solar marketplace.”

That last note is illustrative of the potential. Unlike rooftop solar, once people “get it,” it’s a no-brainer, easy-peasy decision. Sign up, support local renewable energy and save yourself some cash, regardless of your roof, property size, rate territory or income level. Solar especially needs more ways to benefit low-income communities.

The cycle time from hitting the website to subscribing is also “significantly shorter” than what they expected upon launch. “It proves this is a self-serve marketplace here,” Aggarwal says. “Come in, evaluate, filter them however you want and subscribe right then.”

Deal makers and breakers

Thus far, EnergySage has found these to be the key decision factors for subscribers.

1. The discount. Most community solar projects offer a discount compared to what you pay vs. a utility, somewhere between 5 and 15 percent (10 percent on average). Some projects offer bigger discounts for low- to moderate-income households (LMI) in areas where policy makers have made that a priority.

2. The cancellation policy. Is it a 30- or 180-day cancellation policy? Is there a penalty, and how much of one? How much notice is needed to cancel? These factors are all listed and a big deal. Projects without a cancellation policy (if they still exist) are not eligible to be listed in the EnergySage Community Solar Marketplace.

“The area where we really focus and give advice to developers is the termination clause,” Aggarwal says. “The duration has to be low, but also how easy is it to cancel? We are paying close attention to that.”

3. Proximity. Consumers are typically looking for projects near them. They want to feel they are supporting local solar energy.

4. This might be more of an observation than a decision-factor, but the site’s go-live date and “percentage until it’s sold out” stat are also emerging as drivers. The closer it is to going live or being sold out, the faster subscriptions accelerate. 

It’s too early to know the impact of the review function, but one would assume, over time, this will play a big role as well.

What’s next?

Considering all of the above, Aggarwal thinks we’ll see discounts get bigger over the next decade as costs go down, driven in part by a marketplace-based approach to lessen customer acquisition costs. The marketplace could also become a feedback loop for future community solar development. What ZIP codes are being searched the most that don’t have sites near or available to them? That data is available to developers in the EnergySage marketplace. Developers interested in joining the Community Solar Marketplace to list projects can head here.

Source: https://solarbuildermag.com/news/comparison-shopping-could-unlock-community-solar/