States Move to Encourage Community Solar

The number of U.S. homeowners who have their own solar panels has been growing steadily since 2000. But as that market slows, the industry’s focus is shifting to the huge swath of customers who can’t put panels on their own roofs. Among them are renters, people who live in places where installation isn’t allowed or isn’t feasible, and those who simply cannot afford their own panels. For these would-be solar customers, the only option is to draw the power from panels set up elsewhere.Traditional utility companies have until now driven much of the growth in these community solar, or shared solar, efforts. But while states have little control over whether utilities set up shared solar projects, many have been moving to open up the market to enable private companies, nonprofits, homeowners associations and others to develop and run community solar projects.The thorniest question states face, perhaps, is how to value the excess energy that is sold back to utilities — an issue dogging efforts to encourage the use of solar power and incorporate it into the power grid.Fourteen states and Washington, D.C., have laws enabling third-party community solar. And some 90 percent of the explosive growth in the sector in the next five years will take place in five of them that have taken early steps to encourage the industry: Colorado, Maryland, Massachusetts, Minnesota and New York, according to GTM Research, which studies solar power and other renewable energy.