Use Innovative Business Models for Solar, Says RMI

December 1, 2014 By Linda Hardesty

RMI Energy ManageA new report from the Rocky Mountain Institute (RMI), “Bridges to New Solar Business Models: Opportunities to Increase and Capture the Value of Distributed Solar Photovoltaics,” says solar stakeholders should move forward with profitable business models and not wait for pricing realignment and regulatory model reforms, which may take significant time.

Solar PV is growing rapidly in the US, yet, nationally, solar produces only 0.2 percent of electricity generation – still far from the Department of Energy’s SunShot Initiative target of 14 percent of electricity generation from solar by 2030.

The report provides some examples of successful solar business models in practice, including:

• Salt River Project – Community Solar Program. Customers sign up for kW blocks and buy the output at a fixed rate, which represents a near-term premium of ~10 percent but also provides a hedge. More than 1,000 residential customers and 100 schools have participated in the program.

• Duke Energy (NC) – Green Source Rider. Duke’s pilot program enables nonresidential customers to displace new load with renewable energy. Duke handles customer applications and then arranges power purchase agreements with renewable energy suppliers. Customers buy the generation at the power purchase agreement rate and receive a credit based on avoided energy and capacity rates.

• SolarCity and Direct Energy – Solar Energy for Businesses. SolarCity and Direct Energy partnered to create a program offering DPV installations to Direct Energy’s commercial and industrial customers. The partnership includes creation of a dedicated investment fund to finance projects, with Direct Energy handling marketing responsibilities and SolarCity managing DPV project design, installation, and maintenance.

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