Innovative solar program in Austin

Really interested to see how well this takes off: Austin Energy Standard Offer Program Ramps Up Local Solar Capacity:

If you’re a commercial building owner, you can now rent out your rooftop and parking lot space to a solar developer who will put in an array and sell that energy to AE. You’ll have another revenue stream, and Austin will have more solar power. Standard Offer is opening up “an untapped market” for solar generation, said Tim Harvey, director of energy efficiency services at AE. “Before, it’s like: I put up solar and my tenant benefits from it. Now it’s like: For no capital cost, I let somebody else put up the solar and I get another revenue stream.”

It took me a minute to wrap my mind around this program, but the realization that made it click is that it’s targeted toward large, multi-tenant commercial buildings, like strip-malls. Those owners aren’t paying the utility bills – the tenants are – so putting solar panels on the roof doesn’t benefit them the same way it does homeowners with residential installations.

This scheme gives those landlords a way to sell the solar power generated on their roofs directly to the utility. The landlord could install it themselves, or they could lease their roof space to some other party. That other party, a solar developer, invests in the installation and maintenance (and so owns the panels), and then they get to sell the power to Austin Energy. And part of their costs are the lease payments to the building owner/landlord.

This was announced early last year, but the new tweak to the program is a price floor that takes away a lot of uncertainty around what the rate of return would be:

Last week, AE created a new incentive that guarantees the minimum compensation for Standard Offer never falls below 11 cents per kWh for the first 10 years of the project. No matter how volatile the market, the department will make up the difference.

It will be really interesting to see how this goes! This could be a model that catches on elsewhere, spurring solar development that sidesteps NIMBY opposition.