State regulators greenlighted the first 200 megawatts of community solar generation this week, kicking off development of 45 projects that could include tens of thousands of customers around New Mexico.
It’s the first tranche of what may eventually become scores of statewide projects that could allow hundreds of thousands of local consumers who can’t install their own rooftop solar systems to instead participate in clean energy generation as members of community installations, potentially lowering their electric bills.
The state Public Regulation Commission announced the first round of project awards to energy developers Monday morning, culminating a six-month selection process that began in November when InClime Inc. — a Maryland-based company that the PRC contracted to manage the community solar program — put out a request for proposals, or RFP, to solicit company interest in building and operating installations.
The RFP generated proposals for more than 408 potential projects around the state, representing more than 1,700 MW of solar generation. That’s 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.
As a result, InClime whittled the first round of projects way down. But once these first installations come online, likely by year-end 2024, the PRC could approve the next group of projects from a “waitlist” of 47 additional community solar installations that InClime also announced on Monday.
Greenlighting the initial projects, however, marks a major milestone in program development, which began in 2021 when the state Legislature passed the Community Solar Act and Gov. Michelle Lujan Grisham signed it into law, said Arthur O’Donnell, PRC director of policy administration.
The PRC approved new rules and regulations last year to govern the program, leading to the recent RFP and the first project awards.
“New Mexico is part of a nationwide movement for community solar development that’s steadily expanding to include almost half the states,” O’Donnell told the Journal. “New Mexico is now one of 22 states and the District of Columbia that have approved enabling community solar legislation. And I just got word that two more states — Missouri and Wisconsin — have introduced legislation.”
How it works
Under the program, residential and commercial consumers who want to participate in a community solar installation can sign up as project “subscribers,” whereby they pay a monthly fee for a percentage of power generated. The electricity produced by each installation will be sent to one of the state’s three regulated electric utilities — Public Service Co. of New Mexico, El Paso Electric and Southwestern Public Service — depending on whose service territory the project is operating in.
The utility will then credit subscribers for their share of the solar power generated on their monthly bills.
The program allows individuals or businesses who rent homes or buildings, or who can’t install rooftop solar systems for financial or other reasons, to participate in solar generation for the first time. And, under PRC rules, energy developers seeking authorization for projects must reserve 30% of project subscriptions for low-income households, or for low-income-serving organizations, to ensure that under-privileged populations have a fair opportunity to join community projects.
In addition, 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.
“Many of the winning bids included promises by developers of a certain level of savings for consumers,” O’Donnell said. “We’ll monitor that going forward to make sure those promises are met.”
One bidder even promised free subscriptions for low-income consumers, potentially offering that developer a competitive edge over other companies seeking PRC approval for projects.
“We hope every customer sees some level of savings,” O’Donnell said. “But overall, the goal of the program is to introduce small-scale solar development around the state to provide clean generation as part of the state’s Energy Transition Act.”
RFP winners and losers
The first round of projects announced Monday includes community installations in most regions of the state, with six projects targeted for southern New Mexico in EPE territory, 10 in eastern zones under SPS, and 29 in PNM’s territory in Central New Mexico and some rural areas.
About a dozen companies won approval for first-round projects. That includes eight installations proposed by Pluma LLC — a veteran-owned construction and electrical contractor in Albuquerque — and seven by Affordable Solar, the state’s largest installation firm.
Pluma has previously installed individual solar systems on government buildings. But the new program will allow it to expand into larger projects of up to 5 MW, said Pluma founder and owner Chris Pacheco.
“Community solar in New Mexico will mean residents and families can protect themselves against rising utility rates, lowering their electricity bills with locally produced, clean energy,” Pacheco told the Journal. “Fifty percent of each of our project’s power is reserved for New Mexicans who are struggling to pay their utility bills.”
At Affordable Solar, the company is excited about expanding into a new, emerging market, said Commercial and Community Solar Development Director Dylan Connelly.
“We took a nice slice of the pie in the bidding process, and there’s still plenty of opportunities left for many other companies as well,” Connelly told the Journal.
Some companies, however, have complained about irregularities in the RFP process that may have disadvantaged them in the bidding.
The winning bidders will likely start marketing project subscriptions to customers this summer. But no company will break ground on any installation until receiving approval from PNM, SPS or EPE to connect the project to a utility grid.