Rikaela Greane 

Regulators, economists, and renewable energy advocates trumpet community solar as a more affordable, relatable, and accessible renewable energy source.[1] Indeed, researchers predict these snappily named “solar gardens” will be the next largest solar growth market in the United States.[2] Motivated by statute, image, or altruism, many utilities started growing community solar gardens, which allow several energy customers to share the benefits of one solar array.[3] Unfortunately, state statutes enacted to prevent utilities from unreasonably discriminating between customers in their ratepayer territory could be the weeds that strangle these silicon gardens.[4]

These statutes prohibit an electric utility from providing an unreasonable preference in the services it provides or the rates it charges to customers within its service area.[5] Although these statutes have not blocked community program development to date, multiple factors indicate future conflict is likely.[6] Notably, as utilities implement more community solar programs, the potential for conflict will inherently increase.[7] Additionally, these statutes inhibit other renewable energy programs.[8] Further, some states have made concerted efforts to avoid a conflict between community solar programs and their unreasonable preference statutes.[9] Finally, multiple utilities limit customer access to community solar programs to discrete geographical areas in their customer territory, inviting unreasonable preference claims.[10]

This Note questions whether a utility community solar program can limit access to a subset of its rate paying territory without violating unreasonable preference statutes in California and Kansas, concluding that a utility can avoid providing an unreasonable preference by emphasizing the practical and public interest factors driving its decision to limit community solar participation. Furthermore, this Note finds that different states prioritize different public interest and practicality factors. As a result, a utility can further avoid offering an unreasonable preference by tailoring its program to meet the specific public interest and practicality concerns prioritized by the states where it operates.

Questions and inquiries regarding this Note may be forwarded to the author at LawReview@vermontlaw.edu.

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[1] See, e.g., What is a Solar Garden?, SolarGardens.org, http://www.solargardens.org/frequently-asked-questions/ (last visited Oct. 16, 2015); Jason Coughlin, et al., Nat’l Renewable Energy Laboratory, A guide to Community Shared Solar: Utility, Private, and Nonprofit Project Development 41 (Dick Wanderscheid et al. eds., 2012) (discussing California’s successful integration of community solar into its Multi Family Affordable House Partnership program); Interstate Renewable Energy Council, Model Rules for Shared Renewable Energy Programs 4 (Colin Murchie et al., eds., 2013) (noting “consumers are highly motivated to participate in shared renewable energy when the generation facilities are located in or nearby their communities”); Jeff McMahon, Utilities and Solar Companies Jockey for Position as Community Solar Blooms, Forbes/Tech (Oct. 31, 2015, 7:30 AM) http://www.forbes.com/sites/jeffmcmahon/2015/10/31/utilities-and-solar-companies-jockey-for-position-as-community-solar-blooms/ (explaining that utilities want to access the increased investment in community solar).

[2] Corey Honeyma, U.S. Community Solar Outlook 2015-2020, GTM Research (June 2015), http://www.greentechmedia.com/research/report/us-community-solar-market-outlook-2015-2020.

[3] See, e.g., Minn. Stat. § 216B.1641 (2015) (requiring the state’s largest public utility, Xcel Energy, to develop and implement a community solar program); Herman K. Trabish, Why Utilities Across the Nation are Embracing Community Solar, Utility Dive (Jan. 22, 2015) http://www.utilitydive.com/news/why-utilities-across-the-nation-are-embracing-community-solar/354164/ (noting that utilities view community solar as an opportunity to add equality to their renewable energy offerings).

[4] See, e.g., Norman L. Dean & Alan S. Miller, Plugging Solar Power Into the Utility Grid, 7 Env. L. Rep. 50069, 50071-72 (1977) (identifying that state anti-discrimination laws could hinder solar development in general).

[5] Id.

[6] An advanced search on Westlaw and LexisNexis databases for  “community solar” and “unreasonable preference” reveals that no state utility commissions referenced their state’s unreasonable preference statute when they considered a community solar program proposal. Further, an advanced search on Westlaw and LexisNexis databases for “community solar” and “unreasonable preference” indicates no state or federal court has referenced a state’s unreasonable preference statute in the context of a community solar program.

[7] See Coughlin, supra note 1, at 8 (noting that “[i]n general, publicly owned utilities have  taken the lead in deploying community shared solar projects”).

[8] See, e.g., Public Service Company of New Mexico, No. 12-00072-UT, 2012 WL 10937024, at *1 (N. M. Pub. Serv. Comm’n 2012) (denying utility request for variance supporting third-party solar development).

[9] See, e.g., Colo. Rev. Stat. Ann. § 40-2-127(1)(E)(e) (West 2015) (stating “[a] utility may give preference to community solar gardens that have low-income subscribers).

[10] See, e.g., Frequently Asked Questions, MN Community Solar, http://www.mncommunitysolar.com/faq/ (last visited Oct. 16, 2015) (limiting participation to customers within the same county as the solar array); Frequently Asked Questions, Clean Energy Collective, http://www.coloradocommunitysolar.com/faq.aspx (last visited Oct. 16, 2015) (limiting participation to customers within the same county as the solar array); Cf. Join Inland Power’s Community Solar Program, Inland Power & Light, https://www.inlandpower.com/wp-content/uploads/2014/09/October-2014-FINAL1.pdf  (offering community solar participation to all Inland Power customers).