It will remain a slow burn for New Mexicans waiting to save money by powering their homes or businesses with renewable energy through the state’s community solar program.
While there have been delays and setbacks in the past with community solar, this is a naturally lengthy process for a first-ever program in the state that could take years to get up and running, according to a lobbyist for solar energy developers.
One company thinks it can sign up New Mexicans for community solar as soon as March and start getting energy generated by the end of 2024, potentially delivering energy to people shortly thereafter.
Lawmakers authorized this work when they passed the Community Solar Act in 2021. State regulation officials in 2022 set up rules for the program, and an independent contractor in April 2023 chose developers to set up 45 community solar projects.
How does this work?
Small-scale community solar farms will be set up in New Mexico, and energy generated will be sent to New Mexicans through pre-existing power grids.
People who participate in the program can get credits on their utility bills.
The Public Regulation Commission authorized solar developers to start signing people up for the program in July, but some are waiting to do that until solar farms are closer to being set up.
Since then, solar developers selected are navigating the ins and outs of setting up a program that is the first of its kind to exist in New Mexico.
Kevin Cray is the Mountain West senior director for the Coalition for Community Solar Access, a national industry group made up of businesses and nonprofits in the field.
He told lawmakers on the interim Science, Technology and Telecommunications Committee that it takes years to organize projects, get permits, connect to the energy grid and construct the solar farms, predicting that community solar farms likely won’t come online until 2024 or 2025.
Cray said it’s taken longer than anticipated to get some of the studies completed on projects. However, he did give a bit of a sunny update on those delays, telling lawmakers “a lot of that has been worked through at this point.”
Developers still need to do even more research, and Cray said they’re now moving into more detailed analyses of their projects that he predicts will help determine realistic timelines for if and when solar farms can be set up.
“That should get us some more finite details,” he said.
There have been multiple delays in the past due to technical issues and, separately, how utilities wanted the program to work.
Former Public Regulation Commissioners expressed frustration with the investor-owned utilities that have to participate in community solar, saying they were repeatedly trying to “obstruct and delay” the program during its set-up.
Solar developers are also in the process of working directly with large utility companies to enter the next phase of their projects.
Salina Derichsweiler is the director of development in New Mexico for SunShare, one of the companies selected to set up community solar farms. She told Source NM she’s had a good line of communication with the utility companies SunShare has to work with to complete its goal.
She said it’s important to understand that community solar will bring less money to utilities, so it may not align with the companies’ priorities. However, she said, the community solar law requires utilities to help renewable energy developers navigate the new program, which she said they are doing.
“I think other folks in the industry will say, ‘I think they’re intentionally slowing us down,’ and I just see it as it’s a new market,” she said.
Cray said the pace of project development is generally starting to pick up.
Derichsweiler said she’d like to see SunShare’s solar farm projects get going by spring or summer 2024.
March is likely the earliest New Mexicans could start signing up for community solar through SunShare, she said.
“This is all new,” she said. “So we’re figuring out how to do the process as we work through the process. So I think it’s a really aggressive timeline.”
The New Mexico Public Regulation Commission has to deliver a report to the Legislature about how the community solar program is going in November 2024, so Derichsweiler said it would be good to have energy being generated by then.
Making solar accessible
Derichsweiler said community solar makes renewable energy more accessible to people who can’t put in rooftop solar because they live in apartments or aren’t homeowners.
“Not only do you get a lower energy bill every month, but you also get fair and free access to renewable energy,” she said.
Only about 34% of households in America qualify for rooftop solar, Cray said. He said people who are renters or who have low credit scores are often not able to access it.
The Community Solar Act requires that at least 30% of the generated renewable energy go to low-income households.
Cray said all developers chosen exceeded that threshold. Nearly all of the companies are set up to offer at least 50% of energy generated for low-income New Mexicans, he said.
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And, he said, most of the developers have promised no upfront costs, no early termination fees or credit checks on low-income subscribers.
Derichsweiler said SunShare has committed to all of that and will offer solar energy at low costs because of the scale of the new solar farms.
She referred to the community solar farms as solar gardens — something that’s smaller than a utility-scale farm but larger than household solar. That reduces costs of materials, construction and procurement.
She added that the renewable energy market could boost New Mexico’s economy by bringing jobs to the state.
Indeed, Cray said the community solar program will generate over 1,500 jobs, $58 million in labor income and $206 million in total industry economic output, citing projections from the University of New Mexico.
In addition, New Mexicans’ utility bill savings will recirculate even more money into the economy, Cray argued. For example, he said, instead of paying more for electricity, a family could choose to go out to dinner.
“I think you’re going to continue to see recycled economic benefits,” he said.
Cray said New Mexicans will generally see 10-20% in savings on their utility bills through this program.
Is the program big enough?
Lawmakers set an initial capacity of 200 megawatts for the state’s community solar program.
That limited how many solar developers could get chosen to set up renewable energy farms.
Only 45 community solar projects out of 408 proposals were selected. All of the 408 proposed projects would’ve added up to over 1,700 megawatts of solar energy, Cray said.
The limited capacity is something Sen. William Soules (D-Las Cruces) voiced concerns about at the committee meeting last Thursday. He said it seems like an arbitrary cap that’s going to limit the new community solar market in New Mexico, dragging down the economic benefits.
“That’s acting as an anchor on an economic driver for the state,” he said.
It’s also prolonging climate change issues, he added.
Cray said direct negotiations with utilities led to the power cap, and he can’t speak to why the utilities advocated for that.
“I think it was largely an effort to crawl before you walk before you run,” he said.
When Soules asked if additional capacity could be added to the program, Cray said it’s largely up to the New Mexico Public Regulation Commission.
There’s a statutory objective to establish a long-term community solar capacity, Cray said, going beyond this 200 megawatt cap.
“At this point, I think the ball is essentially in the PRC’s hands to see what they would like to do with the program and how they will or won’t expand it in the future,” he said.
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