Date of Award

8-2016

Level of Access

Campus-Only Thesis

Degree Name

Master of Arts (MA)

Department

Economics

Advisor

Sharon Klein

Second Committee Member

Caroline Noblet

Third Committee Member

Timothy Waring

Abstract

Community solar is a growing movement, which may offer significant benefits over individual residential solar development. In addition to benefits associated with economies of scale, such projects may expand access to individuals who would otherwise be unable to benefit from solar energy and can offer an increased level of engagement in electricity generation. Despite these benefits, little research has examined the financial viability of existing community solar models, nor the characteristics and motivations of the individuals who participate in them. Recognizing the lack of a single source of information regarding existing projects in the United States, we constructed a new dataset of 5098 community solar projects in the United States. Because Massachusetts and Vermont emerged as leaders in community solar, either in terms of number of projects or number of projects per capita, we elect to compare these two states with our home state of Maine. We first analyze state level policies and incentives which may influence community solar deployment in Maine, Massachusetts and Vermont. In the second analysis, we employ Net Present Value (NPV) to assess the cost competitiveness of existing community solar projects in Maine, Massachusetts and Vermont under three incentive scenarios. Finally, we utilize data collected through a survey of community solar participants in Maine, Massachusetts and Vermont to explore the demographic characteristics, attitudes and behaviors of community solar adopters.

First, we analyze state level solar policies with a specific focus on how each policy may influence both the degree and type of community solar deployment in our three states of interest. Within the broader category of net metering, we explore each state's aggregate and individual system net metering caps, group net metering laws and additional incentives related to net metering. We next examine Renewable Portfolio Standards (RPS), carve-outs, Renewable Energy Credits (REC) and Alternative Compliance Payments (ACP). Finally, we address various other policies likely to affect community solar development, including tax credits, deductions and exemptions, rebates, community solar-specific policies and third-party ownership.

In the second analysis, we evaluate the cost competitiveness of 553 existing community solar projects in Maine, Massachusetts and Vermont. By estimating the NPV and Payback Period (PBP) of each project, we assess the financial viability of six different community solar typologies: Solar Schools, Municipal Solar, Non-Profit Solar, Solar Universities, Solar Farms and Solarize. In addition, for the purposes of comparison, we estimate NPV and PBP for an individual residential solar array in each state. Furthermore, we employ three distinct incentive scenarios in our analysis, one in the absence of any incentives, a second with currently available incentives and a third with previously available incentives applied in addition to those currently available. Massachusetts is revealed as the most profitable state across all project typologies, while solar farms or gardens are the most profitable type in each state. In contrast, non-profit models of community solar in Vermont and Maine are not cost competitive with retail electricity under current incentives.

In the third analysis, we use data collected through a survey of community solar participants in Maine, Massachusetts and Vermont to explore the characteristics of individuals who engage in community solar projects. We explore the demographic characteristics of survey participants as well as their motivations for participating in the project. We also investigate whether participants report engaging in energy conserving behaviors or adopting energy efficiency measures prior to and after their experience with the project. Community solar survey respondents tend to be wealthier, more highly educated and more likely to identify as democrats politically than residents of their respective state as a whole. Additionally, while respondents associated with all community solar typologies are highly motivated by the environmental benefits of the project, municipal solar participants may also participate in the project as part of their job expectations. Finally, while community solar participants do perceive an increase in energy conserving behaviors following their experience with the project, they are also very likely to have adopted energy efficiency measures prior to community solar participation.

Together, the three aforementioned analyses explore whether various community solar typologies are cost-competitive in Maine, Massachusetts and Vermont, and how each states' renewable energy polices affect the cost-competiveness of these projects. These results, along with our analysis of the characteristics and motivations of individuals can be used by decision makers interested in drivers of community solar diffusion, as well as individuals considering engaging in a community solar project.

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