By: Thomas Muholland

The United States is failing to meet its energy goals. In the next ten years, some sectors in the United States may even see an overall increase in emissions.[1] Our country is simply not doing enough to mitigate global warming, and the United States, the second-largest world emitter of greenhouse gases,[2] is considered critically insufficient in our efforts.[3]

The solutions to our current environmental failings will not be one-size-fits all, but I believe there is an opening in the energy market that can provide for a more sustainable, renewable future. 77% of Americans find it important for the U.S. to develop alternative energy sources, yet less than 10% of our current energy supply comes from renewable sources.[4]  To capitalize on this energy gap and bring the United States into the forefront of climate change mitigation, entrepreneurs should take advantage of community energy ownership (CEO).

Community energy ownership allows community residents to directly participate in the economic and operational activities of their local renewable energy market. This business model allows residents to directly buy into new, local energy projects, and reap the benefits of their investment. Residents purchase a ‘share’ of the new project roughly equal to their household energy usage. This purchased energy share then goes into the community grid, and each participating household’s energy usage is covered by the community grid. Not only does this give communities a stronger voice in their local energy market, but this type of investment will also spur the growth of renewable energy, which tends to be a better and less expensive form of energy in the United States.[5]

Taking collective action, local communities nationwide can mitigate the climate crisis. Cities have taken the first step in pledging climate goals, and now, using CEO, these goals might just be achievable.[6]  This presents a tremendous opportunity for renewable energy startups to act on the willingness of Americans to participate in alternative energy markets. With cities willing to step in and possibly municipalize utilities and work toward progressive environmental goals, a space is opening up for startups to help link the government, developers, and the community. That is where companies like Solstice come in.[7]

 

Linking Developers and the Community

 

The Boston-based renewable energy startup Solstice, which specializes in solar energy, links developers directly to consumers. These consumers, who are often unable to purchase rooftop solar for their own home[8], still can play a large role in shaping community energy by buying into a Solstice project.

Consumers, rather than paying for their own renewable energy sources, simply can buy into a community project. When developers receive enough residential commitments to fund a renewable project, they construct solar gardens (or wind turbines, biofuel plants or other renewable energy source plants) in another location and send the electricity to the community grid. Residents then are credited for their monthly energy bills in relation to their portion of ownership of the project.[9] As renewables are now cheaper than traditional sources of energy such as coal and natural gas, residents can save a large amount over time.[10] Community energy ownership lets developers work with large groups, rather than individuals, to initiate more cost-effective, efficient projects and developers are able to ensure the success of the project by determining demand before starting a new project.

Through their innovative platform, Solstice assists both the developers and the community members. Solstice partners with developers who are typically more skilled at financing, building, installing, and obtaining the proper permits. The startup then connects the developers to the community by finding demand, providing specialized software platforms, direct billing and crediting, and offering back-end utility administration expertise. Consumers meanwhile enjoy the benefits of cheaper electric bills and can feel proud of supporting their local energy marketplace.[11] Developers save money by leaving the customer service to Solstice. Solstice manages the initial education, sales, and ongoing support.

Each side saves money, and the Earth reaps the benefits of renewable energy. This startup, through their online platform, seamlessly links developers to the community, which helps grow local solar gardens and lessen negative effects of traditional energy sources. Solstice gets the community connected. Their success in community energy ownership has allowed them to expand from Massachusetts to D.C., New York, and New Jersey. The expansion of Solstice’s projects also shows that different types of communities can be connected. Solstice has been successful in linking both urban and rural areas. Specifically, Solstice has been successful working in large communities like Washington, D.C., and Cambridge, MA while also bringing in smaller communities such as Plympton, MA, and Baldwin, NY.[12] Community energy is not limited to densely populated areas. Each community type stands to benefit from community energy, whether through taking advantage of economies of scale in densely populated areas, or reducing reliance on traditional energy sources in more rural areas. No matter what type of community, all that is required for participants is connection to the already-existing grid and willingness to participate.

This is the newest emerging space for energy-minded entrepreneurs. Companies like LevelTen,[13] Community Energy,[14] and Arcadia[15] have entered the fray by addressing climate change through better, community energy-oriented systems. Community energy ownership startups can take advantage of the aggregate effects of connecting communities to utility-scale energy projects, and I strongly believe new community energy ownerships startups should take a page from Solstice’s book.

 

 

 

 

 

 

 

 

 

[1] Environmental Protection Agency, Inventory of U.S. Greenhouse Gas Emissions and Sinks. Available at https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks, For example, recent federal Safer Affordable Fuel Efficient (SAFE) rollbacks resulting in weaker fuel efficiency standards will likely lead to higher emission in the transportation sector

[2] Friedrich, Johannes, This Interactive Chart Explains World’s Top 10 Emitters, and How They’ve Changed. World Resources Institute, Available at: https://www.wri.org/blog/2017/04/interactive-chart-explains-worlds-top-10-emitters-and-how-theyve-changed

[3] Climate Action Tracker, USA, Available at:  https://climateactiontracker.org/countries/usa/current-policy-projections/

[4] DeSilver, Drew, Renewable energy is growing fast in the U.S., but fossil fuels still dominate, Pew Research Center, Available at:  https://www.pewresearch.org/fact-tank/2020/01/15/renewable-energy-is-growing-fast-in-the-u-s-but-fossil-fuels-still-dominate/

[5] Ellsmoor, James, Renewable Energy Is Now The Cheapest Option – Even Without Subsidies, Forbes, Available at: https://www.forbes.com/sites/jamesellsmoor/2019/06/15/renewable-energy-is-now-the-cheapest-option-even-without-subsidies/#6531e1e45a6b

[6] C40, American Mayors Pledge Climate Leadership In Response to United States Presidential Election, C40, Available at: https://www.c40.org/press_releases/american-mayors-pledge-climate-leadership-in-response-to-united-states-presidential-election

[7] Solstice, https://solstice.us/about-solstice/

[8] According to Solstice, 80% of American Households can’t get rooftop solar, Available at: https://solstice.us/

[9] Winn, Zach, Helping lower-income households reap the benefits of solar energy, MIT News, Available at: https://news.mit.edu/2019/solstice-community-solar-0926

[10] Ellsmoor, James, Renewable Energy Is Now The Cheapest Option – Even Without Subsidies, Forbes, Available at: https://www.forbes.com/sites/jamesellsmoor/2019/06/15/renewable-energy-is-now-the-cheapest-option-even-without-subsidies/#6531e1e45a6b

[11] Ellsmoor, James, Renewable Energy Is Now The Cheapest Option – Even Without Subsidies, Forbes, Available at: https://www.forbes.com/sites/jamesellsmoor/2019/06/15/renewable-energy-is-now-the-cheapest-option-even-without-subsidies/#6531e1e45a6b

[12] Solstice, Projects, https://solstice.us/projects/

[13]Schneider, Can this online startup change how companies buy renewable power? April 1, 2019. https://energynews.us/2019/04/01/west/can-this-online-startup-change-how-companies-buy-renewable-power/

[14] Community Energy, https://www.communityenergyinc.com/

[15]Arcadia, https://www.arcadia.com/