The booming community solar sector is showing no signs of slowing down, with at least 7 gigawatts of direct current (GWdc) community solar now expected to come online in existing markets between 2022 – 2027.
The forecast, which represents an 11% boost compared to previous forecasts, applies to community solar in existing markets and does not account for potential new markets in five states where enabling legislation is being considered, which would add another 1.2 GWdc of capacity.
The report by Wood Mackenzie, released in collaboration with the Coalition for Community Solar Access (CCSA), is the second this year to forecast community solar growth that exceeds prior estimates—a clear indication of the industry’s exploding growth.
“There continue to be significant tailwinds for the community solar industry as legislators in existing and new states look to community solar as a way to achieve energy policy goals,” said Jeff Cramer, CEO of CCSA. “The numbers released by Wood Mackenzie only represent a conservative forecast of what’s in the pipeline for the next few years.”
The increase is attributed to the opening of new markets in New Mexico and Delaware, as well as expansion of existing programs and help from updated regulations. Of those states, Illinois and New York account for the greatest state-level changes to the forecast. With 1.3 GWdc coming online between now and 2027, New York is expected to continue as the nation’s leading community solar market.
If new markets were to open in California, Michigan, Ohio, Pennsylvania and Wisconsin, the projected capacity would significantly increase, the report found. In California, a proposed bill is currently moving through the Assembly that would require each new community solar project be paired with storage and to impact at least 51% of low-to-moderate income customers.
The report’s forecast is based on survey responses collected from CCSA members on projects under development in state markets, customer acquisition methods, makeup of project subscribers and contract offerings.
The report also highlighted trends in the community solar industry’s subscriber costs, finding that costs to acquire large customers are lower, but more variable, on a per watt basis than acquisition costs for residential customers.
“Cost per customer is inversely correlated with cost per kilowatt subscribed,” said Rachel Goldstein, a solar analyst at Wood Mackenzie, who authored the report. “Anchor tenants like municipal or large commercial customers are costly to acquire but subscribe to a large share of projects, so costs per kilowatt are lower.”
The data also revealed that while community solar-plus-storage can provide grid flexibility, regulatory models do not adequately address how it can be best used to help projects manage load. As community solar encompasses an increasing share of non-residential projects, developers are facing high costs for grid upgrades. Community solar-plus-storage could help provide the necessary grid flexibility, but its scope has been limited to a handful of states and it is largely undervalued as a tool for improving grid resilience.
At present, community solar is taking root in a third of US states. The Biden Administration wants community solar to reach 5 million households by 2025 and create $1 billion in energy bill savings.
While Wood Mackenzie’s projections are intentionally conservative, with the right confluence of stakeholder support, new legislation and industry action, projected installed capacity could greatly surpass this five year outlook.
“We call on all federal and state policymakers to help remove the barriers and incentivize deployment of community solar to cut energy costs and give more people access to these programs,” said Cramer.