According to ERCOT, the entity that oversees 90 percent of the State’s grid, as of January 2019 there was nearly 1,500 megawatts of installed utility-scale solar capacity in the ERCOT region, with that number expected to almost triple to 5,800 megawatts by the end of 2020 (one megawatt is enough to power about 200 homes in Texas during times of high-peak demand). As the demand and desire for solar energy continues to increase, utilities and solar companies in the ERCOT region are finding creative ways to deploy solar generating facilities and expand customer participation. One creative method used by utilities and solar companies is community solar.
A common structure for a community solar program involves the following: the construction of a solar farm by a solar company; the solar company and the participating utility enter into a long term power purchase agreement for the participating utility’s purchase of the electric output from the community solar farm; and the solar company sells ownership of the individual solar panels that comprise the solar farm to customers of the participating utility. Customers who purchase panels receive bill credits from the participating utility based on the electric output of the facility and the percentage ownership of the facility by the customer. For example, if a particular community solar farm has 100 solar panels and customer “x” purchases 10 panels, then customer “x” is entitled to receive a credit on his or her monthly electric bill in the amount of 10 percent (10/100) of the total price the participating utility is required to pay for the monthly electric output of the solar farm.
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