By early spring, energy developers could begin signing up potential customers to participate in the state’s first community solar projects.
InClime Inc. — a Maryland-based company that the Public Regulation Commission contracted last year to manage New Mexico’s new community solar program — is now sifting through 404 potential projects around the state that developers want to build in response to an InClime request for proposals, or RFP, that the company launched in November.
Taken together, those proposals represent more than 1,700 megawatts of solar generation, or nearly nine times more power than is currently permitted in the first stage of program development, during which total community solar output will be limited to a combined cap of 200 MW.
The initial response shows “overwhelming enthusiasm” among developers, said Miana Campbell, InClime’s community solar lead for New Mexico.
“The tremendous response to the community solar program RFP is an early indicator of program success,” Campbell said in a Feb. 20 statement announcing the bid results. “InClime is (now) meticulously evaluating all proposals.”
The company expects to approve the first projects in April, allowing select proposals to move forward on building the initial 200 MW of generation.
Under the program, residential and commercial consumers who want to participate can sign up as project “subscribers.” Then, once a project begins operating, the participants will pay a monthly fee for a percentage of the power generated, although the subscribers won’t actually consume that electricity.
Rather, the power will be sent to one of the state’s three regulated electric utilities — Public Service Co. of New Mexico, El Paso Electric or Southwestern Public Service — depending on whose service territory the project is operating in. Subscribers will then receive a credit on their regular monthly utility bills for that portion of community solar generation they signed up for.
The first projects likely won’t come online until late 2024, since it will take at least 18 months to build a solar facility, said Arthur O’Donnell, PRC director of policy administration who helped develop the community solar program. And, before construction can begin, developers must first obtain an “interconnection permit” from the utility operating in the area where the project is located to connect the planned solar facility to that utility’s grid.
But customer sign-ups can begin immediately.
“We expect projects to be selected in each utility territory by the end of April…and then they’ll go into the interconnection review,” O’Donnell told the Journal. “But they’ll begin marketing to solicit customers once their project is selected. It could take a whole year of marketing to sign up enough subscribers for each project.”
Low-income carve-out
That prolonged marketing period reflects strict requirements that developers must follow under program rules the PRC approved last year to comply with new state legislation, which authorized the launch of community solar development in 2021. That includes a mandated 30% carve-out for low-income households, or for low-income-serving organizations, to ensure that under-privileged populations have a fair opportunity to participate in community solar projects.
Low-income subscribers will be eligible for discounts on the fees they pay to community solar developers, which could increase the solar credit they receive on their monthly utility bills. And, in the current project selection process, InClime is now working to ensure bidders have plans in place to offer discounts to low-income households and community-based organizations, Campbell said.
New Mexico is one of only five states that signed on last year with the U.S. Department of Energy’s National Community Solar Partnership, which is working to broaden the availability of affordable renewable energy for consumers nationwide. Under the DOE partnership, participating states will receive assistance in reaching out to local households enrolled in the federal Low-Income Home Energy Assistance Program to recruit them into community solar projects.
The low-income carve-out reflects basic goals in community solar development, which aims to empower people and businesses with access to low-cost solar generation when things like renting rather than owning homes and facilities or lack of financial resources prevent independent installation of rooftop solar systems.
Under the partnership program, the DOE wants to power up to five million households across the U.S. with community solar by 2025. And, by specifically reaching out to low-income households, the DOE estimates community solar enrollment could lead to $30 million in energy savings for New Mexicans.
Maximizing participation
Apart from low-income participation, PRC rules require community solar developers to reserve at least 40% of each facility’s capacity for subscribers who sign up for 25 kilowatts or less of total electric generation. That can help ensure residential participants, small-business owners and others with lower electric consumption can obtain subscriptions without large-scale industry and commercial consumers crowding them out.
In fact, under PRC rules, no single project participant can subscribe to more than 40% of a facility’s capacity.
Those rules could increase the number of households and entities that join community solar projects, potentially allowing tens of thousands of local residents to benefit over time as projects spread throughout the state.
But that could will take years, since the program is capped at just 200 MW of total development until year-end 2024, and all individual projects are limited to a 5 MW capacity cap to help smooth community solar’s integration into the local electric market. That’s critical to work out program challenges, including disagreements with the state’s three investor-owned utilities, which want to ensure equitable distribution of costs when connecting solar projects to their grids.
Energy developers also need time to develop strategies for pursuing community solar, which is very different from building individual solar systems for a single customer, said Dylan Connelly, commercial and community solar development director at Albuquerque-based Affordable Solar — the state’s largest solar construction and installation company. Affordable submitted a number of bids under InClime’s RFP to build company-managed projects in New Mexico.
“Affordable Solar has never built its own community solar projects,” Connelly told the Journal. “The physical installation is the same as other projects, but the new component is not just about building a facility for one owner, but for 1,500 to 2,000 owners (subscribers). And with the 30% low-income carve-out, you have to go out and find those folks to sign them up.”
Still, the solar industry is excited by the emerging opportunities, Connelly said.
“Only 4% of homes in New Mexico have solar on their roofs, because if you rent, or if you have bad credit, you couldn’t do it,” he said. “But now, even those consumers can sign up for community solar. That means a lot more people can get involved, which could make the solar market a lot more equitable.”
