COMMUNITY TOOLKIT

Last Updated: September 2018

Welcome to the Solar in the Community Toolkit! This resource is designed to help residents, businesses, and communities in Illinois get access to reliable, affordable, and clean power through community solar. This toolkit will introduce the options you have for going solar in Illinois, then guide you through how you can use Solar in the Community to achieve your community solar goals. This toolkit is full of resources and recommendations, and it will be your companion on your journey toward to solar power.




THE BASICS

What is Community Solar?

Community solar projects (sometimes called community solar ‘gardens’) are larger, centralized solar power installations that allow residents and businesses to enjoy the benefits of solar power without having to install solar panels on their own homes. Anyone can ‘subscribe’ to a community solar project to receive a share of the power generated by the solar panels. The result is cheaper electricity, more reliability, building a local workforce, and contributing to a more vibrant community.

Community solar is relatively new to Illinois. 2016’s Future Energy Jobs Act passed by the Illinois General Assembly formally allowed utility customers across the state to get credit for energy from a shared solar project directly on their electric bills through ‘virtual net metering.’ Because of this law, Illinois will see a wave of community solar projects get built in the state over the next few years.

What is Solar in the Community?

Solar in the Community is a match-making site for community solar developers, community leaders, and subscribers. It brings together the Illinois residents who are interested in subscribing to a community solar project, community groups that want to bring solar power to their community, and solar developers who have the resources and the technical know-how to make those projects a reality. Once on the platform, users will be able to browse Illinois' community solar projects, connect with developers to find out how to subscribe, and work with their neighbors and friends to propose community-managed or even community- owned projects.




OPTIONS FOR GOING SOLAR

Subscribing to a Project

This is the simplest, most accessible way to go solar with community solar. Subscribers can browse the Solar in the Community platform for the project that fits their needs, then connect to learn more. Because subscribers pick from community solar projects that are already underway, they have the most choices and likely access to the cheapest solar power. Effort and complexity is minimal--signing up for community solar could be as simple as signing up for a cell phone subscription.

Proposing a Project and Working with a Developer

If you or a community group have the vision for a community solar project that is in your neighborhood or managed by the community, proposing a project on the Solar in the Community platform will help you make that vision a reality. It will connect you with resources from Illinois’s leading advocacy and environmental education groups and connect you with the state’s foremost solar developers and installers. This is a much more complex undertaking that simply subscribing to a project, but it allows the community to build the solar power it wants in partnership with solar developers.

Building a Community Solar Project from the Ground Up

If your community wants to realize all of the benefits of community solar, including the returns on investment that come from investing in and owning a community solar program, you may want to consider building a community solar project from the ground up. The development process is time, effort, and resource intensive:  Some estimates indicate that one-off solar development can take a small team a year or two of fully dedicated work. Still, it may be right for you and your community.

To better understand the pros, cons, and next steps for each way of going solar, check out the table below:

Go Solar with Solar in the Community:  Options and Next Steps
Go Solar by... Pros Cons Next Steps
Subscribing to a project near you Quick and easy access to green energy and cost savings; Potentially no upfront costs; Access to a broad diversity of projects No benefits of ownership; project may be far away from residence or business Log-in as a subscriber to Solar in the Community
Proposing a project and partnering with a developer Control over some aspects of the project; partner with knowledgeable solar partners; potential workforce benefits; solar in your community Managing relationship with solar developer; potentially higher costs / lower savings; Propose a project on Solar in the Community and connect with a solar developer
Developing a solar project from the ground up Total control over all aspects of the program, from placement to low-income inclusion to design Complex and time- consuming; high up- front costs and need for financing; less economy of scale than others Propose a project on Solar in the Community

For whichever option you choose, this toolkit provides guidance, tips, tricks, and resources for making acquiring solar power easy and effective. Follow the links below to get started:




SUBSCRIBE TO A COMMUNITY SOLAR PROJECT

Subscribing to a community solar project is the quickest and easiest way to participate in community solar. You don’t have to take on any of the work of designing, implementing, or getting approval for solar panels, but you’ll be able to benefit from the clean, affordable and reliable power that community solar generates. As a ‘subscriber’, you enter into an arrangement with the owner or operator of a community solar project, agreeing to pay them for a share of the energy that is generated by the solar panels.

On the Solar in the Community platform, you’ll find a number of different ways that you can subscribe. The details are unique for each community solar project (and we’ll provide resources to make sure you understand the terms of your subscription), but most subscriber options tend to fall into a few broad categories:

  • Lease: The subscriber agrees to make a periodical payment to the owner-operator for a predetermined period of time (usually 5-15 years) in return for a portion of the energy output for the solar project.
  • Pre-paid Lease: The subscriber makes an up-front payment to the owner-operator in return for a portion of the energy output for the solar project over a pre-determined period of time (usually 5-15 years).
  • Power Purchase Agreement: The subscriber agrees to pay a per-kWh price for a certain amount of energy generated by the solar project for a pre-determined period of time.
  • Purchase: The subscriber buys a portion of the panels on the solar array, becoming entitled to the energy generated by the project.

Each of these arrangements has benefits and drawbacks in terms of total price, timing of payments, and timing of savings, and each subscriber should decide for themselves to determine what works best for you. Savings are often affected by the way the subscriber currently pays for their energy use and the impacts of virtual net metering, and the details of those payments can affect which arrangement makes the most sense for you. See the Clean Energy Resource Teams’ Financial Decisionmaking Tool for a better idea of how prices and subscriber arrangements can affect savings.

Key Questions
  • Shop around. Make sure that the deal you’re looking at is the best one available.
  • Get to know your solar company. They will be your partner for a long time, so you want to be sure that they are stable and reliable business partners.
  • Understand cost and savings calculations. You should understand how savings apply to you, and not rely on “average” savings.
  • Ask questions and understand all of the terms before you sign.

Here are a few questions to ask of your developer (courtesy SEIA and Minnesota’s Clean Energy Resource Teams) before you sign:

  • How much energy will the system produce, and how much will I be credited for?
  • What is the exact price I will pay, and when will I be billed?
  • How long does my agreement last, and what are my transferring my subscription if I move or decide to end my subscription?
  • Is my solar panel covered by a warranty?
  • How will I receive information about the project once I’ve signed up?

These are only a few of the important questions that you should ask when signing up for community solar power.

Logging onto Solar in the Community

Once you have a good idea of what type of subscription would work best for you, you’re ready to log in as a user on the Solar in the Community website. Simply navigate to www.solarinthecommunity.com, register as a user, and browse the available community-proposed and developer-proposed projects (keeping in mind that you’ll need to share the same utility as the project you subscribe to). When you find projects that you’re interested in, click ‘connect’ and work with the project owner on the steps toward formally subscribing.

Note: ‘Connecting’ to a project on Solar in the Community does not commit you to subscribing to the project; users may ‘connect’ to as many projects as they’re interested in learning more about.




PROPOSE A PROJECT AND PARTNER WITH A SOLAR DEVELOPER

Helping community members to propose projects and find partner solar developers is a core feature of the Solar in the Community platform. It bridges the gap between communities and developers, ensuring that the communities that want solar the most can find experienced solar developers that are working in their state. Making a successful project proposal on the Solar in the Community platform will take some familiarity with solar power, especially at the outset, but many of the most technical tasks will be done by a solar developer. Once the project is built, you and other community members can also form the subscriber base that takes much of the energy from the project.

The resources below will guide you through making a successful proposal on the Solar in the Community platform and give you the tools to engage confidently with solar developers.

Coaching

Over the course of proposal, you won’t be alone. Solar in the Community administrators from The Accelerate Group, Citizens Utility Board, Elevate Energy, and the Environmental Defense Fund will be available to review your proposals and provide resources and guidance to answer your questions and equip you for developing the rest of your project.

Proposal Checklist

Before a proposal makes its way onto the Solar in the Community platform, proposers should understand what makes a community solar project successful and which stakeholders are important to work with before and during the project’s development. This checklist represents steps that proposers should take as they think through their proposed project.

The list is broken into 4 major sections: The site’s suitability for solar, stakeholder engagement, understanding working with developers, and creating an appealing presentation. Although proposers should work through each of the items on this checklist, starred items must be completed before the project goes live on the Solar in the Community platform.

  • Suitability for Solar:

      **Size: The site is large enough for a community solar project to be economically viable.
      **Shading & Obstruction: The site is free of substantial shading or obstructions (air handlers, etc.)
      **Condition: The site is in good condition (e.g. no damage or remediation required) if the site is a rooftop, the rooftop will not need replacement in 20+ years and is structurally capable of supporting a solar project.
      **Slope: The site is generally flat and will be appropriate for south-facing panels.
      **Access: The site is close to road and electrical distribution infrastructure.
      **Modeling: The proposer has confirmed, via PVWatts or Google Sunroof, that the solar project will produce enough energy for viability.

  • Stakeholder Engagement:

      **Site Owner: The owner and/or operator of the site is aware of the potential project being developed and is generally supportive. There is reasonable confidence that the site operator will not change, and that the site will not be re- developed, for 20+ years.
      Local Community: The local community around the site is aware of the potential development and a plan is in place to address potential comments, questions, and complaints..
      Utility: The proposed project falls within the criteria of the local electric utility’s community solar interconnection requirements.
      Local Government: The local municipality is aware of and receptive to solar projects. There are no special zoning or permitting barriers to the project.
      Subscribers: A specific market or population of potential subscribers has been identified, and an outreach strategy has been developed.

  • Working with Solar Developers:

      Options: Project proposers have identified potential developers for their project.
      Strategy: Project proposers have outlined an explicit strategy and evaluation criteria for engaging with developers (e.g. RFP, questionnaire, et cetera).

  • Appealing Presentation:

      **Narrative: Compelling, accurate, technically appropriate narrative has been drafted for each portion of the Solar in the Community project profile
      **Photos: Clear, accurate, appealing photos of the site and community, as well as potential project renders, ‘sell’ the project to viewers.


Finding the Right Site

Solar projects are long-term investments--many projects are warrantied for 25 years and may last up to a decade after their warranty--so even minor issues with the ability of solar panels to produce energy can add up to major differences over time. Aside from the amount of solar panels that fit on the site you select, many factors, from shading to risk of damage from water, can impact the project.

The Solar in the Community Site Review Guide will guide you through the most salient points for understanding whether any given physical site is a good fit for solar, and can help evaluate between multiple potential spots. For quick reference, check out the Solar in the Community Site Review Rubric and Scorecard.

Proposing the project on Solar in the Community

Once you’ve selected a site, made contact with the site’s owner or operator, and drafted informative language and graphics about your project, it’s time to upload it to Solar in the Community and engage with subscribers and solar developers.

Once your project is on Solar in the Community, you can tell the world about it! Use all of the media available to you, from Facebook to local news, to get the word about the solar vision you have for your community.

Working with Developers

Nothing is one-size-fits-all in the solar industry, and solar power developers are almost as diverse as Illinois communities. It’s important that you ask questions to ensure that the solar developer you’re working with is right for you. Clean Energy Resource Teams’ Community Solar Developer & Operator Questions is oriented toward community solar in Minnesota, but the questions are still relevant for all communities seeking to partner with developers on community solar projects. It’s a good start for vetting solar developers and ensuring that you and your solar developer fit.

Some projects that are further along in development and may not need as much guidance could instead opt for a Request for Proposals (RFP) model for soliciting requests for solar developers. RFPs allow community groups to specify exactly what they want from solar developers, operators, and installers, and allow developers to propose their own solutions. The nature of the RFP process makes it easier to compare between multiple solar developers. One resource for publishing an RFP is All Points North Foundation’s Request for Proposals Template & Guide.

Whichever method you choose, working with developers and finding the best deal for you and your community is an important part of the development and project partnership process.




DEVELOP A SOLAR PROJECT FROM THE GROUND UP

There is no requirement that solar developers be the only entities that put solar projects together. Although some parts of solar project development require specific expertise (e.g. engineers for construction; legal experts for contracting and program design), communities that are passionate about community solar can bring together all of the components needed for their community solar project, owning and even managing the project if they’d like. By developing their own project, communities in Illinois can ensure that the economic benefits of return on investment flow back to their community, and they will have complete control over all aspects of the program design, including inclusion provisions for low-income subscribers, whether subscribers can buy panels outright, and almost any other detail of the project.

Communities that decide to embark on this route should be aware of its difficulty. Community solar projects are technically and legally complex, and even the simplest project requires cooperation of several stakeholders with different interests and attendant legal documentation and processes. Solar projects are capital-intensive, and communities will likely need to raise the financing and capital themselves from a combination of foundation grants, state and local incentives, local banks, and self-funding to put their project together. Arranging the details of a solar project can take years even before construction and subscriber begins.

The resources provided here are not a comprehensive guide for developing your own community solar project; instead, this toolkit provides the most appropriate and accessible resources for understanding how project development works.

Project Timeline

If you and your community is interested in developing a solar project, it’s important to keep the project’s timeline in mind. Multiple stakeholders will need to be engaged at times over the course of project development, and mapping out how project development will work with your own organization’s timeline. An example workflow from Elevate Energy and Cook County’s Community Solar Case Study Overview is below:

  1. Elevate Energy, Community Solar Case Study Overview: Development Timeline


    Another helpful way to conceptualize what needs to be done to develop a community solar project could be a checklist. The National Renewable Energy Laboratory’s Guide to Community Solar includes a high-level checklist across all phases of project development, from feasibility to maintaining the project’s operation.

  2. National Renewable Energy Laboratory Guide to Community Solar


    Using a resource that covers the whole project development process will allow your organization to understand the tasks ahead and plan out how they will be addressed.

Community Solar Business Models & Program Design

One of the most complex and challenging aspects of solar project development is developing the right business model and program design. Even if the project is operated by a single government or a small group of partners, organizations typically create a formal partnership or corporation for managing their community solar project. Depending on the details of the operating arrangement, a stake in the holding company might constitute a ‘security’ and be bound by federal securities regulation. The potential for federal securities regulation relevance is just an example of one of the unexpected hurdles that one can encounter when developing a community solar project.

Once the ownership structure is determined, project developers still need to think about how they’ll operate their community solar project. Project details like how many subscribers will participate, whether they purchase energy, lease panels, or own part of the project outright, how transitioning between customers occurs, inclusion of low-income subscribers, or even the offered price will be dependent on the goals of the project and the desires of the program managers. Program design is a logistically and technically complex topic, and substantial thought should be put into it during project development. The resources below will be particularly helpful for program design.

Financing Your Project

Getting the capital together for your project is likely to be one of the most challenging parts of solar development. The high up-front costs with very long value streams in the future mean that solar power returns on its investment, but getting the financing and capital together to purchase, install, and energize the project can be a major barrier to getting a project off the ground.

Fortunately, there are many potential sources of funding, assistance, financing and capital that are available to community solar project developers, especially when the project demonstrates potential value for the community. The most important sources are summarized below:

  • Federal Incentives and Policies through at least 2021, the Federal Investment Tax Credit (ITC) reduces the up-front cost of solar projects by a substantial portion through issuing a non- refundable tax credit to the project owner. Federal policies also allow for the project’s value to be depreciated on an accelerated schedule (through MACRS), which provides additional tax benefits. Because the tax credit isn’t refundable, a financing partner with a high tax liability will be required to take full  advantage of the ITC.
  • State Incentives and Policies: Through the Future Energy Jobs Act, the state of Illinois offers pre-determined prices for the sale of renewable energy credits (RECs) from the project, acting as an additional source of revenue with payment for the project’s RECs happening up-front. Which incentives the project is eligible for, and which are granted by the state administrator, can have a major impact on the viability of the project. See the Illinois Power Agency’s website for more information.
  • Local Incentives and Policies: Municipalities in Illinois may offer their own incentive policies or grants for solar development as well.
  • Foundation Grants. Especially for non-profit projects and projects with a specific and verifiable goal of community impact, grants from major philanthropy organizations may be a potential source of funding.
  • Federal Incentives and Policies through at least 2021, the Federal Investment Tax Credit (ITC) reduces the up-front cost of solar projects by a substantial portion through issuing a non- refundable tax credit to the project owner. Federal policies also allow for the project’s value to be depreciated on an accelerated schedule (through MACRS), which provides additional tax benefits. Because the tax credit isn’t refundable, a financing partner with a high tax liability will be required to take full  advantage of the ITC.
  • Community Development Financial Institutions (CDFIs). Community Development Financial Institutions provide financial resources to project that bring economic revitalization throughout the United States, and based on the benefits to ratepayers and job seekers, community solar qualifies. Contact a local CDFI, or check the Opportunity Finance Network’s list of CDFIs. Community Development Financial Institutions may also be empowered to distributed.
  • Traditional Financing and Solar Developers. Commercial banks and solar developers may also be interested in lending toward your project. Understanding the total amount of capital needed and the price of capital will be key for understanding the financial viability of the project.
  • Program Design and pre-paid leases. Some case studies have shown success with pre-paid leases by subscribers being used to raise capital. Other innovative program designs may also be leveraged for project capital.



Resource Library

While the guidance above should be helpful in getting users started on their path to solar power, the obstacles and solutions written here represent the tip of the iceberg. Fortunately, research institutions and non-profits have been steadily working toward unlocking community solar for everyone, and have already drafted the materials that you might need to move forward. A library of the most effective tools is below.





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