Midwest utilities ‘overwhelmingly surprised’ by solar subscription demand
- May 16, 2019 4:00 pm GMT
- 236 views
WRITTEN BYKaren Uhlenhuth
The plans, marketed as community solar, have seen warm reception in Nebraska and in Missouri, where one project is “78% oversubscribed.”
As Midwest utilities offer solar subscription plans, customers are sending a clear message: They want more.
On May 4, the Omaha Public Power District sold the last available share for a utility-owned solar project under construction on a piece of degraded land a few miles from the utility’s shuttered nuclear plant.
“We knew the demand was there, but I can say we were overwhelmingly surprised it sold out so quickly,” said Tricia McKnight, a product specialist with the Omaha Public Power District. “I think customers are a lot more environmentally sensitive than we expected.”
The utility is among several in the region that is offering or preparing to offer subscription programs marketed as community solar. Critics say the offerings stretch the definition of community solar, but customers appear eager.
The Omaha Public Power District had initially planned to make the program exclusive to residential customers for 90 days before opening it up to all customers, including commercial and industrial. That won’t happen anymore because of the strong demand from residential customers.
In about five weeks, approximately 870 customers committed to all the power that the 5-megawatt array is expected to produce. Subscribers bought enough generation to offset, on average, about 90% of their electricity use. They will pay a premium of 79 cents per block of 100 kilowatt-hours. For a typical residential customer, that will be about $7 extra per month.
And if the cost of solar energy falls — as McKnight expects it will — they could receive a credit on their bills. More than 100 customers have indicated they’d like a piece of a second array. Generation on the first one is likely to begin in August. Massive flooding in Nebraska in March delayed construction, McKnight said.
Ameren Missouri also got a warm reception from customers when it opened up its first solar project for subscription last fall. Within 55 days, on Dec. 10, customers had spoken for all 1 MW of generation.
Ameren limits customers to obtaining half of their past year’s energy from the solar array, which is now under construction near the Lambert Airport in St. Louis. The average subscription was for four 100-kilowatt blocks, just under half of the typical monthly residential power consumption. Each 100-kilowatt block costs $5 on top of the usual energy charge.
Customers are continuing to queue up for solar power. Ameren’s project is “78% oversubscribed,” according to a company spokesman Brad Brown.
Renew Missouri’s executive director, James Owen, expects that Ameren’s solar resources will proceed at a slow if steady pace. Small projects have special appeal to utilities since the Missouri General Assembly passed a bill in 2018 allowing them to bypass standard regulatory review for projects of 1 megawatt or less.
Kansas City Power & Light in the next few weeks plans to invite its Missouri and Kansas customers to opt into a subscription solar project that state regulators in both states approved last fall, according to spokesman Jeremy McNeive. Construction will begin once customer commitment reaches a threshold set by regulators: 75% of anticipated capacity in Kansas, 90% of capacity in Missouri.
The company anticipates the extra cost will be between 2 cents and 5 cents per kilowatt-hour, meaning that a 100-kilowatt-hour block will cost a premium of between $2 and $5. Customers may purchase solar to offset up to half of their annual usage.
Another subscription solar project in the pipeline is proposed by Interstate Power & Light in Iowa. The company proposed a solar option two years ago, but some critics dismissed it as an opportunity to purchase power at a higher price with no assurance that any new solar capacity would be built.
In a rate case now pending before the Iowa Utilities Board, Interstate proposed some changes from its earlier solar proposal.
“There are pieces of the community solar that we still have concerns with,” said Josh Mandelbaum, an attorney with the Environmental Law & Policy Center who’s been involved in negotiations. “But the direction has generally been constructive. It adds new renewables, and provides at least some economic benefit to customers, and so will likely provide an incentive for them to participate.”
A ruling on Interstate’s latest subscription solar proposal is likely later this year.