by Jill Cliburn

I’m preparing to speak on a webinar for the Smart Electric Power Alliance this Thursday, April 5. It’s free, so get over there and register if it’s not too late. If it is too late, I will give you some clues now, about my thoughts on the topic “Avoiding the Growing Pains of Community Solar.” Come back to this blog in a few weeks, and I’ll tell you more about how the webinar went.

Coming from the CSVP, my thoughts center on opportunities for utilities to design or influence community solar, in order to increase value to the participant and also the community at-large. The CSVP process, which you can follow step-by-step on our Solutions pages, was designed around a lot of experience with community solar and its stakeholders. Top advice? First, collaboration is one big, fat pill that can alleviate a lot of community solar headaches. But there's more.

The best chance for community solar success comes when stakeholders settle early on their goals and then draw some boundaries around the offering.

Then, to grow community solar, we advise the stakeholders, perhaps led by utility service providers, to take a portfolio approach. Aim for similar, but customized projects and vary the customer-focused offer. For example, targeting key accounts, targeting low- to moderate-income customers, targeting schools or non-profit agencies or targeting solar plus storage for emergency preparedness, and integration value. Rather than delaying each project until it meets everyone’s needs, stakeholders and policy-makers should be encouraged to see community-solar as a portfolio of solutions, which over time can truly address the community’s needs.

Granted, my roots in working with municipal utilities and electric cooperatives are showing. This is similar to the plan CSVP developed with the Sacramento Municipal Utility District. But it is important to note that the model works in investor-owned utility territories as well—so long as regulators can be both patient and firm. If the utility makes the commitment to grow a diverse community solar portfolio, then it may take some time, but the utility—and the community—can get there, achieving the goal of “solar for all.”

This is especially useful way to re-interpret the Interstate Renewable Energy Council (IREC) guiding principles for community solar. I recently reviewed a paper that was based in large part on applying IREC’s Shared Renewables Criteria to individual utility-based community solar programs. After checking scorecards for a half-dozen community solar programs, it became clear to me that designing perfect-score community solar program was like designing the legendary Ford Edsel. (Even I am too young to remember the Edsel, but I had a marketing prof once who confessed that he worked on that car, designed to please everyone and miserably pleasing no one.) If community solar program designers get a chance to meet some IREC criteria fully with one offering and other criteria with another offering, then I imagine customers, utilities, advocates, and other stakeholders could be left smiling, and there would be a lot more solar on the line.

The CSVP Solutions pages were designed with this varied approach in mind. The CSVP offers lots of resources for designing your first community solar project or your fourth. This includes our Guide to Market Research and Market Segmentation. Our analytic and pricing work, including the GAP Analysis, is likewise designed to map onto unique utility situations, with a minimum of time and trouble.

Practically speaking, we also understand that you don’t have the time to dig in as deeply as you’d wish. As a utility professional or a customer or stakeholder who’s trying to leverage new programs, you can quickly assess whether advice is valuable to you, but running the gauntlet of details can be tough. For that problem, we offer a time honored solution. Send us a note. Extensible Energy, Cliburn and Associates, and our expert network can help, whether this is your first community solar experience or a dive into one of the many variations that can raise the value of your solar portfolio.

by Jill Cliburn

When the CSVP touts community solar as an exciting way to roll out energy storage innovations, we often cite pilot-scale introductions, with customer-side thermal storage. Steele Waseca, a co-op in Minnesota, set the pace for that strategy in 2015, when it introduced a 100-kW community solar project, where each solar share comes with an option for a free, load-controlled electric water heater. That strategy reduced base-case program costs by 70% and allows the utility to use more wind energy, usually at night. We’ve seen similar thermal storage offers tied directly to community solar, and we believe the future for such programs is bright.

We’ve also seen battery storage projects (on the customer-side, at Green Mountain Power and on the utility side, at Austin Energy) that are ripe for pairing with community-solar. But through fall 2017, the business models for community solar plus batteries seemed a little ways off. And then came Fayetteville....

Soon after our Solar Plus Storage guide came out last fall, we participated in the American Public Power Association Customer Connections Conference. A presentation from the Fayetteville, North Carolina, Public Works Commission (PWC) captivated the audience with its strong business case for utility-led community solar plus battery storage.
 
That project is still in the works, with construction and market introduction expected this summer. We might have kept mum on its progress, but we’ve heard of at least one other public power project that is taking a serious look at the model, and there are others that should. It is a case, as we often see during an early-adoption phase, of a utility problem that triggers opportunity. If you’ve got this problem, consider…
 
PWC has specified 1-MW PV array with single-axis tracking, along with a 500-kW/1,000 kWh lithium-ion (Li-on) battery. Fayetteville customers have been outspoken in favor of community solar, and as they learn about storage, they like it, too. By going with solar plus storage, PWC can avoid a hefty monthly coincident peak demand charge from its power suppler, Duke Energy Progress. The local utility can pass that savings along, to make the program a win-win for participants, the utility and the community overall.
 
According to a study published by the North Carolina Clean Energy Technology Center, with the U.S. Department of Energy (SunShot) and PWC, the savings on demand charges that accrue from storing solar energy when it is abundant and discharging it during the coincident-demand period is the number one economic driver for this model. In addition, the solar design, using single access tracking, picks up greater on-peak solar generation, and the whole project picks up value, based on compliance with the state’s RPS.
 
Thanks to good, solar-plus design, this project will nail the coincident peak with almost perfect accuracy (“95% of months,” according to the NCCETC report). A few other benefits of the selected business model include utility ownership from the start, rather than use of a long-term PPA or flip structure. Other utilities may find third-party structures capable of meeting economic requirements, but as a municipal utility, PWC found that self-financing and long-term ownership could work for them.
 
Late in 2017, utility program designers began to worry about the impact of the impending solar tariff regime on the project, according to Nadav Enbar, an analyst for EPRI who reported on this project for an upcoming EPRI member report. It seems likely that, with the continuing decline of storage costs and the relatively manageable conclusion of the tariff debate, the project will still pencil out, as PWC moves from RFQ to RFP in its internal procurement process.
 
Wholesale demand charges are not as prevalent as they once were, but many utilities still pay them, and sometimes they are quite steep. In fact, this business model seems to take a lesson from the increasing interest among retail commercial customers, especially in states like California, to use solar plus storage for demand arbitrage.  It may be that emerging rate structures at the retail and wholesale level will change the particulars of on-peak energy avoidance. Yet we are willing to bet that, with increasing solar generation and the development of an ever-steeper ramp in evening utility demand, emerging rate structures will continue—or even intensify—the incentives for PV system dispatch to the grid. Advanced battery systems and new control strategies for customer-side demand response can adapt to the most likely changes in rate structures. Utilities like PWC are deciding that now is the time to engage with customers on this increasingly important solution.

By Jill Cliburn

Not so long ago, I was presenting about the benefits of offering community solar together with other energy options, as one way to engage with utility customers in reinventing utility service for the age of renewables. Understand that I was addressing the Peak Load Management Alliance, so my audience already had experience pushing the energy-information rock uphill. Some in the audience wished that their favored solutions, from new rate designs to  energy storage systems, were as popular as solar panels. They were ready to consider working with utility solar managers and solar developers on new, packaged solutions.

Their viewpoint—which I share—was that if (in fact) the utility is engaging less than 15 minutes per year, either personally or digitally, with the average customer, then they’d better make it relevant, and (I mean this in the healthiest way) they’d better make it viral.

Of course I know that not every utility is going to offer community solar packaged with other options; our CSVP Solutions Toolkit is specifically designed for customization, so you can meet whatever your immediate and long-term program needs might be. But I also know it is time for customer engagement to be about much more than real-time outage reports and paperless bills. And I will tell you why.

Check out the latest ESource PowerWalking update, a series of man-on-the-street interviews created by the inimitable Bill LeBlanc. The latest interviews are almost as funny as they were in 2011… suggesting, if not exactly proving, that utility customers still need much better understanding about everything electric, with the possible exception of the today's widely-held notion that “Solar energy is … the thing of now.”

Does the content of your engagement with customers matter? I’d say, yes, because even though JD Power tells us that customers are more satisfied with their utilities than ever, those barely grounded customer relationships are wired for disruption.

According to the most recent Smart Grid Consumer Collaborative (SGCC) Consumer Pulse and Market Segmentation Study, the smart grid is reasonably well known; I’d hazard to guess that most people are more comfortable thinking about smart grids, smart appliances and energy apps than they are with the disembodied kilowatt-hour. For example, the SGCC study found that 58% of customers are interested in rooftop or shared solar, and 56% are interested in smart thermostats. It found sweeping interest (75%) in energy storage systems that could provide backup power for their homes.

When interviewed by GreenTech Media last year, SGCC President Patty Durand said, in effect, that today’s utilities should be ready for the teachable moment, whenever customers call, text, or scroll through. Utilities should be the trusted advisor, helping to identify the best option or options for customers, even if their initial interests are a little vague. SGCC research showed that 44% of utility customers surveyed identify with the statement, “Smart technologies fit our environmentally aware, high-tech lifestyles.” Doesn't that sound like somebody your utility could see as more than a customer—perhaps as a partner in your ongoing transformation?

I’ve been looking for an updated metric on how much the average conversation with a customer service representative costs the utility; if you have taht citation, contact me. But even without a quotable number, it’s safe to guess that every encounter with a customer is precious. And it's safe to guess that it’s not just passive engagement, but empowerment that most customers seek.

You can push too hard or too fast, of course. But in many regions, community solar attracts those prospective partners, who are self-selected for wanting to do something meaningful, for themselves and for the community at large. Get ready to talk to these customers about how they can share in beneficial solar plus demand response, low-tech storage or batteries, and talk to them about what reinventing the utility for this new Century means. Whether you ultimately decide to package your offers, or to put out a menu a la carte, it’s time to educate program staff and customer representatives to work with customers, who already want to to be what SGCC calls your Green Champions.

We hope you enjoy sources from the pages cited, and contact us to get started today.

by Jill Cliburn

Are you planning a community solar program or looking for ways to make an existing program better? We think you will find every corner of this website useful; we've been assessing best practices and introducing innovations in this field for more than two and one-half years. But one of the lessons we have learned is that easy access to information counts. Community solar program designers and other stakeholders (inside and outside the utility) often find themselves facing a specific challenge—a burning question on a short fuse.

For that reason, we are thrilled announce the debut of a new set of easy-access web pages. We are referring to the Solutions pages, which you can find right at the top, on our Menu bar, above.

By now, a lot of readers are gone from this blog, off to explore the Solutions web pages. Yes! But if you are still reading, here’s a quick summary of what we offer and why.

What’s on the Solutions pages? Six sets of resources, each addressing a major challenge area for community solar program design process. These challenge areas come right out of our mission statement: First, we review the planning process itself, and the challenge of establishing a truly collaborative effort, which crosses utility-department boundaries. Second, we offer a brief introduction to high-value, strategic community solar design. Third, a discussion of procurement for products (including project development) and services. Some of those decisions come right away, as they define the community solar business model, and others come up as your utility team gets down to the details of program design and delivery.

Fourth, we take a look at target market research and market segmentation. At CSVP, we are happy to refer readers to other resources that build marketing intelligence and strategy; we zero in on target marketing and program customization as a fairly new and especially promising approach. We also echo the process-collaboration theme, as we suggest ways to get specific market research through internal collaboration.

Fifth, we provide resources in an area where the CSVP has broken new ground. That is, designing the program with solar plus storage or demand-response companion measures in mind. Even utilities that do not see solar-plus strategies on their doorstep should give this web page a look. CSVP offers a guide to using demand response (DR) measures to add integration value, and a separate guide to understanding storage choices on both sides of the meter. As utilities nationwide confront greater market-penetration of solar, the strategies we introduce can help, in terms of integration value, local-service risk management, and in terms of making a strong transition to succeeding in markets where lots of players offer lots of DER options to your customers.

Finally, an area of CSVP innovation, which again ties back to cross-departmental and customer-driven requirements of community solar. That is, assessing and increasing the net value of the offer, through a streamlined analytic approach we call GAP: Getting at Price. This approach identifies a strategic goal and then works back, to close the GAP between what the utility needs and what the customer wants in program pricing. In addition to an overview and exemplary generic models that show how GAP works, we offer a round-up of 12 current community-solar pricing models, for readers to review.

Our approach? There are a few unifying themes to all of the work that the CSVP has led.

Of course, it is all based on field experience. The individual firms represented on our team each have decades of experience working with utilities, and a few have been pioneers in the community solar field. In addition, we have relied on input from our Utility Forum, a loose network of six to ten utilities (public power, IOUs, and occasionally electric co-ops) to share their successes and frustrations. In most cases, they also reviewed our work products.

Another way CSVP define its approach is around the term practical. One interpretation: We are not shy about recommending the good works of others. That includes work from some of our colleagues who are also co-funded by the U.S. DOE SunShot Solar Market Pathways Program. We provide direct links to some of their works and also offer annotated, linked resource lists in most of our challenge areas. In those publications, you’ll find a fast path to resources that may be hard to find, but hit one or another nail right on the head.

CSVP’s focus has been on asking utilities to push beyond the ordinary—to use their cross-departmental expertise, technical insights and customer knowledge to create community solar programs that really are win-wins. CSVP is also known for promoting the concept of using community solar as a market-based laboratory. Where else will you find customers eager to work with you to try this new approach to distributed PV and indeed to distributed PV plus storage or DR, engaging the community in real solutions that are scaleable and replicable to address the needs of the 21st century grid?

We hope you will enjoy these resources. Please continue to engage with us, as we would love to see your comments or get back in touch with you. While each participating firm on our project offers its own, extensive expertise, this project is also keeping a core group of consultants on-board to expand our offerings, beginning with on-site trainings, facilitation, and specific expertise in each challenge area, to help you to initiate or improve your own high-value community solar program.

Success is simple; it’s just not easy. I think I read that on Facebook, while I was supposed to writing this blog. But it is a suitable meme to cap off our October webinar, which posed the question, What Makes the Biggest Difference for Community Solar Success? In speaking with our guests, CSVP’s Project Officer John Powers  and industry observer Herman Trabish, we agreed the answers are both obvious and elusive; simple but not easy. If you try to find the perfect program-design process or the perfect program offer, you will look a long time and never find it. But if you dig in with a dogged commitment to common sense, then you, your utility and your community are likely to come out winners.

We will have the discussion loaded to our webinar archive in just a few days, so if you missed it, take a listen. But in addition, I thought I’d return to some of the resources and examples that we discussed. In my consulting practice, I’ve found that simple truths are less elusive—and often achievable—when they’re in the context of real-world examples. So we’ll share some of those and links to the new CSVP documents we discussed.

First, I’ll share details on the wisdom that I passed along from Jane Peters, President of Research Into Action, a firm that’s focused on energy-program market research and evaluation. Almost ten years ago, Jane did a meta-study of many years of process evaluation experience among her colleagues, to see if they could spot markers for program success. Now, I haven’t asked Jane if the list has changed recently, but I doubt it. It goes something like this:

1. Top level support is the top predictor of program success.
2. Because of their access to data, utilities are suited to lead, but they succeed best when mission-driven and advocacy-oriented.
3. Trade allies are a key to program success, but they need to be well-prepared and motivated.
4. Consumer word-of-mouth (aka, testimonial marketing) is invaluable.
5. Campaigns need to be mindful of timing, e.g., business cycles for commercial programs, community events, allowing time for new processes to take hold.
6. Participation from civic groups and other stakeholder groups is an engine for success.

In our experience, examining best practices among utility-led community solar programs, we often hear a the “c” words, commitment, customer-focus, collaboration, communications, and (catch my consonance) reasonable economics.

At CSVP, we have tried to show utilities how to apply these words of advice. For example, there are lessons-learned in our new presentation-format report, Key Points to Consider In Achieving Your Best Balance Between Out-sourced and In-House Program Strategies. The slide I presented in today’s webinar, showing the cross-departmental roles that must be filled in order to complete a program design, asked viewers to review the list and consider it in light of their in-house expertise and band-width. An honest assessment of the cross-departmental team can help program designers to set a path for collaboration and for getting the out-sourced support they need. If commitment to initiate a program is strong, but commitment to manage the details is weak, then the utility might do well to engage a third party that has strong experience and motivation.

In addition, we were lucky to have Herman Trabish on our call. As a reporter and industry analyst, he provides a fresh perspective on how the utilities succeed or fail, when trying to achieve success in simple, but not easy ways. See:

http://www.utilitydive.com/news/what-makes-a-successful-utility-led-community-solar-program/442663/

http://www.utilitydive.com/news/subscriptions-or-sales-which-community-solar-approach-promises-the-best-gr/434051/

and http://www.utilitydive.com/news/reporters-notebook-utility-pilot-projects-could-soothe-contentious-regula/504709/

When Herman mentioned time of use rates, which will be part of the new community solar program for Hawaiian Electric customers, we were reminded of another new resource, CSVP’s Twelve Community-Solar Pricing Strategies for U.S. Utilities. This is a multi-page summary table of pricing strategies at utilities in Arizona, California, Colorado, Massachusetts, Iowa, Minnesota and Texas. It does not evaluate or rank the different strategies, but it is instructive in showing the range of possibilities. As we mentioned in our remarks, the attention to detail that some of these utilities demonstrated seems to have made a big difference and sets some of them apart.

The Pricing Strategies document is located in our Library, under Market Development for Community Solar, and that is where you will also find the critique of California’s policy-driven community energy programs. That white paper, Community Solar: California’s Shared Renewables at a Crossroads, is co-authored by John Powers with CSVP’s consultants from Navigant, Karin Corfee and Andrea Romano. A shorter version of their paper is featured in Renewable Energy World, http://www.renewableenergyworld.com/articles/2017/10/community-solar-california-s-shared-renewables-at-a-crossroads.html, and will be discussed at the Power-Gen conference in December.

At CSVP, we have much more to share, and we will do that, with our upcoming debut of new pages on our website, comprising a Community Solar Solutions Toolkit. All webinar registrants will receive an announcement of that debut shortly. Meanwhile, I’m off to the National Solar Conference in Denver October 9-12, where I’ll address yet another topic that is dear to the CSVP team’s hearts. That is, solar plus as the next evolution of an enhanced, high-value community solar model. Stay tuned!

By Jill Cliburn

We just prepared a dispatch for our e-mail list, which includes folks from utilities and many other stakeholder organizations, who have attended CSVP workshops and webinars. Preparing that newsheet was a nice throwback; some of us even remember when we received such things on paper! But this is now, so we’re sharing our dispatch here, as a blog, as well as on other social networks. Our headline, Check Lots of Channels, refers our media, but also to our message: Because community solar means different things to different people, you can't just tune in to your tribe. Today’s challenge is to stay tuned to community solar developments from many corners of this fast-changing market, to stay open to new solutions, and to work in partnerships you never expected. 

One fresh news item illustrates the risks of misunderstandings between parties at work on community solar. On August 11 Iowa Public Radio reported, Environmentalists Fight Alliant’s New Community Solar Plan. How's that? It's a pretty straightforward utility-driven plan, offering participants the generation from each one-kW block of the new solar plant for about $13 a month, which is the utility’s reported cost. But critics from the Chicago-based Environmental Law and Policy Center have said there’s no solid long-term benefit for participants, in contrast to panel lease or purchase programs. They also note that the utility had a commitment to this solar plant already. What’s the contribution to the community, if it does push the solar portfolio to a greater bounds?

We tend to agree with the utility spokesperson, who sighed, “You have to start somewhere.” But we also hope Alliant can make continuous, customer-focused and strategic improvements. Alliant told IPR that more than 87,000 of their customers have expressed an interest in community solar. At that, multiples of new community solar projects could reach quite an economy of scale. And within a large, growing community solar portfolio, there could be room for innovation, improving the delivery and understanding of benefits.

It won’t happen if a range of stakeholders don’t talk—and listen. But what a shame if that doesn't  happen! Based on the numbers of participants in other community solar programs so far, 87,000 customers could support 100 MW or more. Why wait to find the perfect program model? A portfolio-based program approach could spread the benefits of declining costs and improving benefits across early adopters and late-comers alike. Granted, this is our observation from a distance. But this anecdote seems to support the need for real collaboration and cross-channel communications, beginning right now.

In that spirit, we’ll dive into that promised, wide-ranging newsheet:

• Will community solar matter? New data from the Smart Electric Power Alliance (SEPA) suggests the answer is, yes. In its 2017 Utility Solar Market Snapshot that the market for community solar took off in 2016, topping 300 MW installed, with more than 300 MW in the pipeline. Over 170 utilities reported that they had active community solar programs by late 2016, according to SEPA. And SEPA is not even as bullish as some market observers. GTM Research recently predicted 400 MW of community solar in 2017 alone, and it cites statements from the National Rural Electric Cooperative Association (NRECA) that co-ops alone could account for more than 480 MW in the near future, surpassing even this bullish market estimate. CSVP saw that reported in Utility Dive, and we plan to follow up, with more details on our website, as we focus our attention on helping utilities navigate this fast-changing landscape.
• Given the potential for confusion over different community solar program models, not to speak of a fairly inexperienced sales force, it’s increasingly important to take consumer protection seriously. We found a few new resources to help trouble-shoot your own program terms or to help innovate something better for utilities, third-party providers, and customers. See Consumer Protection for Community Solar: A Guide for States from the Clean States Energy Alliance (June 2017) and Residential Consumer Guide to Community Solar from the Solar Energy Industries Association and Coalition for Community Solar Access. You will need to edit the material in either of these guides, depending on the rules for your state or local jurisdiction, but the guidelines are widely useful.
• Another indication of a movement afoot… The Community Solar Consumer Choice Act of 2017 (S 1670) was introduced by Senators Michael Bennet (D-CO) and Martin Heinrich (D-NM) in the U.S. Senate July 27. The announcement came as the Coalition for Community Solar Access, a community-solar business group, held a national summit in Denver. Readers may recall that Jeff Cramer, CEO of the Coalition, attended our CSVP Workshop in June. They also may recall a bill introduced in the House several years ago, fueling market interest, if not national policy action

The CSVP Community Solar Workshop on Procurements, Programs and Pricing, June 7-8, 2017, drew a large audience of utility program CEOs, program manager, and non-utility partners. Presentations from the workshop are available in the Library on this website.

By Jill Cliburn

Here's a quick take on our streamlined approach to community solar analytics, aimed at keeping community solar in the community. You know the challenge. So many utilities nationwide have been critiqued for high premium pricing on local community solar. Some offer a market-based, remote solar product as a solution. Our approach is aimed squarely at solving that problem and bringing the premium on local community solar down to a range of two cents or less. That's the range market researchers describe (consistently!) as the boundary for customer acceptance.

You might enjoy our more detailed discussion on this topic, presented on a recent CSVP webinar. We also have posted a deep dive into this topic in the Assessment section of our community solar Solutions toolbox. Here, I will focus on one key observation, often missed by utility analysts and rate designers, i.e., that true cost-based pricing for distributed solar is not simply a pass-through of the solar power purchase agreement (PPA) cost. Yes, the PPA is based on the levelized cost of energy (LCOE), but that LCOE is set from a solar-developer perspective. Put bluntly, it's gross. It is defined simply as the net present value (NPV) of project costs divided by the NPV of generation (kWh), evaluated over the life of the project. But from the utility perspective, distributed energy resources provide strategic benefits, too. The utility's net LCOE must include both the levelized costs of solar and also its incremental levelized benefits.

The generic equations for this net LCOE are:

The concept of levelized benefits for solar need not spark a firestorm, like a dreaded retail value of solar (VOS) debate. At CSVP, we have introduced this as a strategy to be used internally first, by analysts who would balk at setting an immutable, all-inclusive value of solar. Nevertheless, they know there are some real, monetizable benefits from any specific solar project, which are not in the developer's LCOE. Whether counted as ranges or numbers, some kind of LBOE should be considered. And between the solar analyst and designer, it is often possible to hit a true net LCOE target that supports low-to-zero premium pricing.

You can think of the true net LCOE as a benefits-adjusted PPA. It may be used to compare the utility's community solar resource options—e.g., a local project with grid benefits vs. a large, remote solar project, or a half-dozen similar local projects vs. a standard large-scale system. Further, the benefits-adjusted PPA can be applied readily as a pricing solution on the customer bill. CSVP's Sample Pricing Gap Analysis chart below summarizes how all this works. (Note that the values are for illustrative purposes only.)

Many utilities are permitted to "pass through" a benefits-adjusted PPA price instead of passing through the gross LCOE-based PPA price to community solar customers. The CSVP has verified this with at least two of its Utility Forum members; we're interested in talking with more. But we've all seen something like this happen in solar–and I would add some good stories from the wind industry, too–when a determined VP or CEO would tell the analysts to "sharpen their pencils" and make the economics work for a clearly desirable project.

Now, an important parenthetical: Yes, it is possible for some utilities to offer community-scale solar today without charging any premium at all. We've heard of a few cases where solar is the a least-cost resource, so a simple pass-through of the gross LCOE already beats the average retail cost of energy. That's no excuse to stop short, without considering clear benefits (for example, avoided transmission costs on distributed PV) and calculating the net LCOE. When net costs are low, opportunities emerge to target lower-income customers or to support value-added solar-plus project designs.

For many readers, this analytic approach looks familiar and hardly innovative--except in how it is applied. In contrast to a typical value-of-solar analysis, which attempts to identify and set all relevant benefits, this approach seeks a minimum list of benefits, associated with a specific program/acquisition. The goal is simply to reach a target net LCOE. Typically, the analyst would ask utility staff to provide ranges for each candidate value, and to apply caveats as needed. The analyst also may offer strategic improvements to the baseline project design, e.g., using a particular carport structure, single-axis tracker, or fleet deployment. If accepted, strategic design improvements can increase the levelized benefits of energy (LBOE) for the community solar project and make strong progress toward competitive pricing.

The CSVP has applied this process to three utility cases so far: 1) A northern California municipal utility comparing a DPV-inclusive portfolio with a single centralized PV buy; 2) A Southwestern utility where DPV--and even carport solar--benefits add up; and 3) a low-cost wholesale utility in the Mountain West, hoping to offer local community solar, while minimizing the premium on pricing. The differences from case to case are instructive, but in each case, a short list of benefits, conservatively estimated, has proven adequate to meet the target price. I think that's compelling, and I hope you'll dive into our posted materials for detail. One very practical scenario, using a mixed fleet of centralized and local, distributed solar projects is included here, or contact us with your questions.

In utility and peer reviews so far (the cases were completed this year), this process has scored high marks for its focus on building utility decision-makers' support; on speeding the path to more competitive program design and pricing, and on pushing the community solar market forward. It was noted that in a few markets, utilities just can't monetize some fairly obvious benefits, due to problems in market structure. But even then, it is likely that utilities can find alternative benefits to meet a reasonable pricing target. In time, sweeping policy advances may dramatically change utility understanding of the solar value proposition, but we can start with solutions, like this one, that work for today.

This blog is based on a poster presentation that will be featured at Solar Power International 2017, in Las Vegas, NV, this September. See you there!

By Craig Hibberd,
Guest Blogger

Last month in this space, CSVP encouraged guerilla tactics—suggesting five ways that utility staff could cross departmental divides, in order to launch community solar programs quicker, cheaper, and better for both the utility and the customer. Necessary tactics: Community solar requires broad expertise and collaboration. But staff-level efforts can only go so far. It takes senior-level support to assure that community solar and other future-leaning programs will last and grow. So this month, I was invited to offer some thoughts for the boss.

I’ve followed CVSP long enough to know that many readers are working in mid-level positions. If that’s you, we’re asking you to take this one upstairs. And what if senior management comes back with an answer along these lines: “Sure, we operate in silos, and it works just fine. It's efficient and more than adequate. Why should we take the time, effort, and cost of changing our organization?” That’s a good question (gulp). But utilities change because they have to, not because they want to. The real question is, “Does your organizational structure force processes, like community solar program planning, to generate frustration, replication, risk, lost opportunities, or customer dissatisfaction?” Can we all get more done?

If a few staff leaders need to get the ball rolling, they might plan a brown-bag lunch for people from different siloed teams to meet together. The topic could be process mapping. In April, Jill shared a high-level diagram of a best-practice program-design process. While it was not detailed, it expressed an approach. Working with your brown-bad lunch mates, sketch your actual process on a white board or flip chart, or use colorful Post-It notes and move them around to change your current process into a better one. Show when and why community solar includes people from utility resource planning, market research or customer data, procurement, rates, billing and IT, engineering, customer programs, community relations, communications—including, of course, wherever you find yourself.

If your process is a mess, or if your lunch mates from different departments can’t agree on what it looks like, you know it’s a problem. Ask the boss to come take a look—or snap a photo and send it upstairs along with a link to this blog and the following tips.
 
Parenthetically, I know how any process involving Post-It notes can get carried away. One company, Ubisoft, with headquarters in Paris, started a small Post-It note teambuilding artwork activity, using Post-It notes as a readily available team-building tool. The employee teams created a multi-floor "fresco" on street-facing windows, and earned the appreciation of their boss. Subsequently, of course, the team was set to prove their collaborative skills in a more focused, business context!

One more focused step executives can take to encourage cross-departmental collaboration involves integrating information infrastructure. This takes funding, but utilities that have integrated their information technology (IT) and operational technology (OT), and then increased internal access to data, find that opportunities for collaboration—and savings—multiply. For example, the CSVP webinar on market research pointed out that often, siloed work groups have valuable information that others could cost-effectively use.
There are many sources of advice for senior-level management on the topic of silo-busting. CSVP is preparing a short white paper and resource guide, available here in June. One of those sources, from the Harvard Business School argues that, from the company-leader’s perspective silo-busting comes down to these two steps:

• Create a Compelling Case for Innovation
• Create a Fully Aligned Strategic Innovation Agenda
  

It’s the latter point—the call for leadership—that's striking. According to the author, Vijay Govindarajan, “Most senior managements fear that giving strategic guidance to their organizations will stifle their creativity and their willingness to think outside the box.” But nothing could be further from the truth. Leadership opens the box and frees staff creativity.

Goals, such as launching a highly integrated community solar program by “X” date, while moving forward from several concerted departments, along the front lines of utility innovation, sets up a workable challenge. This is not unlike the iconic Moon Shot of the 1960s. It was not a detailed challenge, but it led to many careful and highly integrated plans–and ultimate success. That is, by the way, the inspiration for this blog-site and the CSVP project, which is part of today’s newly iconic SunShot Initiative.

If you want to be first to receive CSVP’s new white paper and resource guide, coauthored by myself and Jill Cliburn, on Collaboration for High-Value Community Solar, please send us your e-mail address via our Contact page.

Craig Hibberd is a Colorado-based facilitator and consultant, with specialized in working with utilities and stakeholder groups to align and accomplish innovation and customer service goals.

At CSVP, we’ve been talking a lot about cross-departmental collaboration. It’s a thread that runs through our spring webinar series, whether it comes up as advice about sharing market research, or in a discussion about lessons learned from best-practice programs, such as the expanded SolarShares program at Sacramento Municipal Utility District (SMUD). Utility-led community solar programs require participation from people across many utility departments or work groups, extending from market research to resource procurement and pricing, to engineering and IT, to communications and customer service.  And, as we’ll discuss in another upcoming webinar on community “solar plus” options, the newest high-value solar program models may require more than mere collaboration. They may require silo-busting.

You can see the challenge in the diagram below, of a best-practice program-design process. Customer-driven planning steps interact with utility-driven steps, leading to a draft program plan—and then a preliminary economic analysis leads back to another cross-departmental go-round. It’s a bit messy, but for the most part, it’s unavoidable. Some utilities may tell one program manager to “just do it,” without much involvement from other departments, but usually that strategy leads to implementation delays, higher program costs, under-performance, and awkward meetings after all, with those work groups that simply need to be at the table.

So, if collaboration is unavoidable, do we have any advice to help? The CSVP team agrees that there are some things you can do to promote effective collaboration from the staff level, but there are also some things that need to change at the top. In this blog, I’ll outline six tips for working at the staff level, and then we’ll consider calling on the execs.

1) Consider your counterparts in different departments as stakeholders. Just as the solar program manager has a stake in the outcome of a new community solar program, so do the folks in engineering, customer service, and IT. Find out what matters to each of the people you’ll have to work with, including what other pressures they’re under and how they see ongoing changes within the utility as a whole. Just as there are widely differing stakeholder views in the community, there are widely differing view within any utility. Ask, listen, and expect some compromise.

2) Apply marketing savvy inside the utility, as well as outside it. I used to teach a unit for the Association of Energy Services Professionals on Internal Marketing. Why not do a little research to consider not only your colleagues’ professional motivations, but also to answer such questions as, Do they have different decision-making styles? Do they prefer different ways of receiving and presenting information? Are there commonalities that bring people in different departments together?

3) Make it about the customer. Internal stakeholders will have their differences, but a unified focus on the customer can ease a lot of tension. The CSVP process diagram puts utility technical and economic concerns up front, too, but even those concerns, such as resource costs, grid management, billing processes, and so on are ultimately driven by the mission to serve customers better.

4) Reward the broader view. The solar program manager or program designer is often more of a generalist than many of the other internal stakeholders. Sometimes this person has a technical background, or sometimes a background in marketing or finance. But there will always be folks with more degrees and experience in a particular specialty at the table. Accept and share the fact that when it comes to community solar broader is better. The common playing field should be a place where internal experts come to work together, speaking plainly and striving to make the whole, integrated program succeed.

5) Come together around an exciting campaign or event. Collaborate to develop a program design and implementation schedule that diverse internal stakeholder can work toward and celebrate together. The program designer and manager should keep everyone—even the folks deep in the trenches of IT or engineering—informed about planning progress (such as a good word from the CEO!) or progress on the roll-out. By planning around an event, such as a ribbon-cutting or reception for community solar subscribers, the planner can invite cross-departmental players and publicly recognize the whole team.

6) Consider working with an outside innovator. Community solar innovators may raise some solutions that disrupt the organizational status quo, but sometimes—and in the right measure—that’s a good thing.

Finally, a word about the limits of staff-led collaborations. The fact is, such efforts are no substitute for leadership, which comes from the top. Some utilities don’t even have an open network for sustained collaboration; they have silos that often act as closed systems, with their own cultures and success-measures that do not reward shared efforts. In such cases, top-management has to take the lead, or a cross-departmental program success will not only be difficult, but it will almost surely be even harder to achieve again. On this point, I like to cite one of our industry’s program-evaluation pioneers, Jane Peters. She once interviewed numerous utility program evaluators, to see what, if anything, most successful programs had in common. What did she find? The top predictor of program success is executive-level support.

If you don’t have that, how do your get it? We'll have to cover that question in another blog. For now, I hope you will share these thoughts across your organization—including sending it, for consideration, to the top.

by Jill Cliburn




No surprise, we’ve heard some nervous rumblings from community-solar program managers during the dawning days this new year. They want to know three things: Will the market for community-scale solar continue to grow? How can they gauge the market across their particular communities? And are there any new insights about how to design and sell community solar for particular customer groups? While nobody has a perfect crystal ball, we’re finding that ours has been pretty good so far. We predicted these questions, anyway, and released a new guide last December to answer two out of three of them. On the third question, I’ve got some new findings about customer attitudes across the political spectrum to share with you here.

Regarding the market outlook, of course, community solar is still on list of Top Trends in energy (along with our other favorites, like solar-plus strategies), at places like Forbes, despite some, mostly regulatory, hurdles ahead. In addition, after the presidential election last fall, Public Opinion Strategies polled a cross-section of 1,000 Americans for their preferences and opinions on energy, reporting results with about a 3% margin of error. I first saw the encouraging findings reported along with some other good market research data, on Green Tech Media. Then I went to the source. That poll was sponsored by the Conservative Energy Network and their constituent groups, and I found a surprising depth of information there, including a region-by-region breakdown. In short, strong support persists for solar and other clean energy strategies in all regions of the country. On the question of whether different energy sources need more policy emphasis, less emphasis, or the same, solar leads, with 76% of all respondents calling for more emphasis. Wind and hydro are not far behind. Among those who identified as “very conservative,” 50% still believe solar needs more policy emphasis, just ten points behind natural gas; among Trump voters, solar led (61% calling for more emphasis), followed by hydro, wind, and natural gas.

Most Americans, Polled After the Election,
Want the U.S. to Accelerate
Development and Use of Clean Energy

We were happily surprised to see that this poll also asked which energy programs matter specifically to Trump voters. These were framed as policies to be enacted at the state level. Energy efficiency upgrades “to reduce the amount of power we need to generate and purchase” were important to 90% of Trump voters polled, and very important to 46% of them. “Community renewable projects like solar that enable consumers to share the benefits and save money on their bills” ranked as important to 80% of Trump voters polled, and very important to 41% of them. Utilities may be somewhat concerned that some kind of savings need to be part of the promise, and that net metering and deregulation were also important 70 to 75% of these respondents. But we believe one interpretation may be that a good, utility-based community solar program offer can help local utilities prove their value to a somewhat skeptical consumer base. Of course, energy efficiency, community solar, and other clean energy offerings rate very highly with moderate and more liberal voters, too.

This brings us to the second question: How does the local solar program manager actually use these findings? That’s where the Community Solar Value Project’s new guide comes in. Market Research and Market Segmentation for Community Solar Program Success (December 2016) offers a five-step process, for locating and assessing available data and supplementing it with a modicum of original market research, to be sure your local community solar program is properly tuned. The guide cites additional, national market-research sources, including detailed research on community solar from the Shelton Group and Smart Grid Consumer Collaborative. More important, it stresses the importance of market segmentation. That is, targeting likely sub-groups of interested customers with program elements and messaging that are meaningful to them. Even when you know that people are inclined toward a program concept, it is important to address their particular interests and concerns.

That leads me to address the third question of the day: Are there any new insights about how to design and sell community solar for particular customer groups? Our guide, just mentioned, goes into some detail about one approach—using information from market segmentation services, such as Prizm and the E Source Solar Customer Project, to predict which customers (who currently have no experience with community solar) are likely to respond, and to tweak each offer to the groups you care about. Lead author Jennifer Mitchell-Jackson, of Grounded Research, notes that many utilities have obtained market segmentation data for projects and programs that solar program managers wouldn’t know about, unless they ask. In our guide, Mitchell-Jackson offers specific tips on how to do that—and more.

My own insight on this question of how to approach target marketing comes from long experience as a program designer, program evaluater, and cross-departmental gadfly. I find that utilities are more successful when they embrace diversity in their  solar strategies and overall energy services program menus, as well as in their messaging. It is encouraging to know that some type of community solar program could be embraced by 90% of all customers—but it is practically irrelevant to worry about that level of participation. In most utilities, a program that attracts 2 to 5% of all customers could be worthwhile (as we’ve seen with previous green power marketing programs). A community solar program that appeals to customers in a targeted neighborhood or a targeted stakeholder group could be more important, in the end, than a mass-marketed program. This is especially true in trying to reach sub-groups of Millennials, who hold the key to utility longevity in the 21st Century.

In a nod to Shelton’s latest report, Playing the Planet Card, I would also suggest that a targeted program aimed customers (often found among “young family” segments or subsets of women) who are highly motivated by environmental concerns could pay off significantly, even at a time when the general tenure of the country is to ease up on environmental policies. True, the utility also might want to offer options for customers who are laser-focused on savings or convenience, or on keeping up with the high-tech Joneses, or whatever. At most utilities, the path to success is direct and fairly simple: get to know your customers, and focus on win-win solutions for their specific needs.