Commercial and industrial real estate owners often face barriers to installing a solar energy system on their own properties. Sometimes the property is unsuitable for solar due to shading or roof issues, or it’s difficult to determine how to divide the benefits among tenants. Community solar offers an alternative that makes the benefits of solar possible for more people, including property owners, tenants and the communities themselves.
As solar continues its meteoric rise in the U.S., community solar grows along with it. Solar accounted for 43% of all new electricity-generating capacity in the U.S. in 2020, the largest share ever and ranking first among all technologies for the second year in a row, according to the U.S. Solar Market Insight Report.
And while community solar today represents only 5% of the overall solar market, the U.S. is projected to add as much as 3.6 gigawatts of community solar in the next five years – enough to power 770,000 homes.
At last count, 21 states are now open for community solar, and there are good reasons why. Community solar expands access to the environmental and economic benefits of solar and, for the commercial real estate industry, community solar projects can add tremendous value to your overall energy strategy.
What is Community Solar?
A community solar project is defined as a local solar facility shared by multiple community subscribers who receive credit on their utility bills for a share of the power produced. Projects are often located on underutilized land, brownfields, or even local farms or ranches, providing landowners with an additional revenue stream by leasing portions of their land.
Commercial rooftops and large, multi-tenant occupied buildings are also great candidates for community solar projects. As a CRE owner, you may be sitting on several properties that would make excellent sites for a rooftop community solar project.
While there are many models of community solar today, the underlying principle remains the same: shared access to a clean energy resource that’s locally produced.
How to Determine If Your Property is Right for Community Solar
As CRE investors and owners move forward in the post-pandemic recovery, finding ways to bolster your organization’s ESG efforts in a cost-effective way will become even more crucial than it was prior to 2020. Community solar is a viable option for companies interested in demonstrating their commitment to environmental sustainability. Moving to renewable energy is an overt action that can be difficult to accomplish without substantial financial and organizational resources. Community solar makes renewable energy possible for more organizations than ever before.
There are a multitude of ways to participate in community solar. Your company can host the array and be its principal offtaker (or subscriber) or you can be a host only — providing tenants and community members the option to become subscribers. You can even choose to subscribe to another community solar project that isn’t hosted on your property. The options are truly endless.
If your organization is truly committed to sustainability but faces obstacles with renewable energy in terms of site suitability or financing, community solar may be right for you.
How Catalyze Approaches Community Solar
Catalyze has several community solar projects in development and under construction, and we are building more every day. Our basic approach is to work directly with commercial property owners to build, own and operate the systems on their properties, enabling them to be the principal off-taker of the clean energy. We can also work with CRE owners to offer subscriptions to their tenants — a valuable amenity in a competitive real estate market — while providing a highly beneficial service to the community: local, affordable, and clean energy.
If your property does not lend itself to hosting an array, Catalyze can help you identify a suitable nearby community solar project that’s available for subscription.
The Catalyze model opens community solar subscriptions to others in the community as well, including businesses, municipalities or homeowners who either can’t afford or don’t have the right roof for solar. In most geographic markets, subscribers to community solar projects save an average of 10% of their electricity costs, which can become even more valuable over time as utility rates escalate. In the Northeast, where electricity rates are high, the savings may be even greater.
Where to Build Community Solar: Light On Land, Dual-Use Properties
When Catalyze develops or seeks to acquire community solar projects that will be built on greenfields or undeveloped land, we take a “light-on-land” approach. We consider the impact that development will have on the natural habitat and ecosystems and always create a land management plan that restores the land to its original state and even adds to its value.
In developing land for community solar projects, we consider the land’s ecological purpose as well as its ability to generate solar power, a term called “dual-use.” Co-locating crops or planting native species and pollinator mixes around the array helps revive and support native species and bee populations, ensuring the land is used to its full, natural potential.
Assessing Your Options
When you partner with Catalyze to realize your energy and sustainability goals through community solar or other onsite commercial and industrial renewable energy projects, you’re able to take advantage of the benefits of renewable energy without capital expenditures or the burdens of ownership and maintenance.
The Catalyze REenergyze™platform analyzes your real estate portfolio to identify properties where the addition of smart energy infrastructure will increase net operating income and create long-term value. If none of the sites in your portfolio are suitable for onsite solutions, we may be able to match your company to one of our existing community solar projects as an energy off-taker.
Contact us to see if community solar is right for your organization.