News & Updates
What is Opt-out Community Solar?
Ampion Renewable Energy
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September 08, 2022
Imagine seamlessly implementing a municipal program that provided financial benefit to residents in town – without having to encourage them to enroll or spend time researching their clean energy energy options. What if the program ensured that savings were provided first to low-to-moderate income residents (those who need it most)? And to round out your goals, the program would support the growth of renewable energy in New York, helping the state meet its goal of 70% renewable energy by 2030.
That’s the gist of New York’s ground-breaking, game-changing program: Opt-out Community Solar. In this article, we’ll dive into more detail about Opt-out Community Solar, and how it’s different from a traditional electricity supply CCA.
Community Solar, Defined
Before expanding on the new opt-out option, let’s first explain how Community Solar works. Community Solar is a state program that lets electric bill payers support the generation of solar energy without the hurdles of rooftop solar (for example, upfront investment, long-term commitment, property liability and risk, or just not owning your roof). With no cost to join and nothing to install, Community Solar is the easiest way for New Yorkers to support clean energy. Every meter enrolled in Community Solar is assigned a portion of the energy produced by a shared solar farm, based on their annual electricity usage. For the energy produced by each subscriber’s share of the farm, they receive a credit on their utility bill, reducing the amount owed to the utility each month.
Look here for more information on Community Solar membership and billing, or watch the video below.
Opt-out Community Solar in Simple Terms
The Opt-out Community Solar Program enables municipalities in New York to enroll their residents (and small businesses) in Community Solar, providing guaranteed savings to community members, while further highlighting municipal climate leadership.
Enrollments in Opt-out Community Solar are automatic for all qualifying residents and small businesses. This method of enrollment is meant to provide the benefits of solar power to community members who wouldn’t otherwise be able to take advantage of it, either because they can’t put a solar array on their roof or they aren’t aware of the Community Solar option– we all live busy lives, right? It also ensures access to the program reaches low-to-moderate income households who need the benefit most. Of course, everyone still has the option to opt out of the program if they wish.
How is this different from a Traditional Community Choice Aggregation (CCA)?
Traditional Community Choice Aggregation (CCA) and the new Opt-out Community Solar model operate similarly, with the main difference being the product offered.
Traditional CCAs enable municipal governments to purchase electricity supply from third-party suppliers on behalf of their constituents. A municipality uses its purchasing power to negotiate an energy contract, securing an electric supply rate for the entire community.
Opt-out Community Solar is another type of CCA. Except instead of using its municipal authority to purchase electricity supply on behalf of residents, municipalities sign up residents for Community Solar. Community Solar has a lot of advantages over fixed supply contracts, which we’ll explain below.
Both traditional retail energy CCAs and Opt-out Community Solar are conducted on an opt-out basis, through which everyone joins automatically and is given the opportunity to opt out at any time.
Retail Electricity vs. Community Solar
Retail electricity (the supply or generation of electricity) is the product offered through a traditional CCA. Retail energy operates on an open market that is constantly fluctuating because it’s driven by the supply and demand of electricity. A traditional CCA helps lock in a fixed rate for the supply portion for all residential and small commercial utility customers within a municipality.
However, this arrangement does not guarantee that the rate offered through the CCA will be lower than the future price of electricity. After all, prices fluctuate every 5 minutes and no one can predict the future. Many people call this a hedge on the market because it does, at the very least, provide a stable, fixed price for a certain period of time when compared to real-time fluctuating prices. These traditional CCAs do not inherently come with savings.
A retail supply CCA may provide a product that includes a percentage of renewable energy, but you should always have someone clarify what they mean by “renewable energy” in terms of the source, location and whether the generation is existing or new. Not all renewable energy certificates are created equal.
In contrast, Community Solar is a state-incentivized program that adds solar credits to customers’ utility bills for their participation in a local solar farm. These solar credits reduce the amount each subscriber owes to their utility, resulting in savings year after year.
While the credit value from a solar farm will fluctuate with the seasons (more sunlight = more credits), there is only upside to participation. Subscribers won’t pay more for their electricity than they would have before joining the program. Furthermore, participating in Community Solar does not exclude customers from choosing a retail or third-party supplier (instead of the standard utility supply). You can be part of a CCA and choose your own retail supply rate, so the two do not conflict.
A Community Solar farm is a small scale renewable energy generator and must be located within the same utility as the municipality. With Opt-out Community Solar, Ampion helps municipalities find one or more local solar farms for residents to join. You and your constituents will know the site’s location and can feel confident in the fact that you’re generating local clean solar energy for the community.
Summary
Both Opt-out Community Solar and traditional retail supply CCAs are viable options that municipalities have the authority to enact for their community. It’s important to understand each product and their differences in order to assess how each may help you achieve your municipality’s goals for your community.
We view Opt-out Community Solar as the easiest, most impactful way to demonstrate your municipal leadership on climate change. Residents and businesses will appreciate the guaranteed savings on their electricity bills and the role they’ll play in helping New York meet its decarbonization goals with Community Solar.
To learn more about Opt-out Community Solar, email us at signup@ampion.net or give us a call at 800-277-3631.
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