Electric co-op in Texas to host up to 15 MW of distributed community solar

On Monday the distributed generation subsidiary of developer Renewable Energy Systems (RES) announced that it has signed an agreement with Pedernales Electric Cooperative (PEC) to build and manage up to 15 MW of solar PV projects at sites owned by the cooperative’s members.

The Pedernales Electric Community Solar Project will comprise PV projects at 15 sites, with each site hosting up to 998 kw of solar PV. RES Distributed will begin construction later this year and expects to complete the projects by the end of 2017. PEC will then purchase the output from these projects under long-term contracts, and sell this electricity to its members through its community solar program.

Community solar has become an increasingly interesting opportunity for both utility customers who cannot install rooftop solar and utilities who see it as a way to offer solar to customers without having them participate in net metering. GTM Research has predicted that the U.S. community solar market will reach 500 GW annually by 2020.

It is unclear how much of this will be installed at the nation’s rural electric cooperatives like PEC. Co-ops serve a larger land area in the United States than investor-owned utilities (IOUs), but the members these cooperatives serve are far fewer in number than the customers of IOUs.

PEC is one of the largest electric cooperatives in the United States with around 200,000 members, serving the Hill Country area in Texas west of Austin and San Antonio. As of late 2015 the utility got around 10% of its power from wind, which is the average for Texas, and 900 of its customers hosted rooftop PV systems.

"To date, co-ops have been minimally involved in procuring solar, compared to other types of utilities," GTM Research Senior Analyst Cory Honeyman told pv magazine. He estimates that co-ops have procured only 2% of utility-scale solar to date in the United States.

However, this may be changing. "While not common for utilities to procure rooftop solar, it has grown increasingly common for co-ops and other smaller utilities to procure both community solar and smaller sized utility scale solar projects," notes Honeyman. "And looking ahead, we expect the role of co-op procurement to increase primarily due to these kinds of projects."

The structure of projects like RES’ may be critical for making this work. "By using a PPA model, co-ops can avoid both the challenge of rate basing a solar project and monetizing the ITC given that co-ops are typically tax exempt," notes Honeyman.

RES, which builds wind, solar, transmission and energy storage projects, launched RES Distributed in 2015. The company notes that the Pedernales project is one of the largest solar portfolios it has begun construction of to date.