What to Know About Colorado’s Community Solar Gardens Modernization Act
October 4, 2021
The Community Solar Gardens Modernization Act was passed in 2010 and enables residents and investor-owned utilities (IOUs) to create community solar gardens throughout the state of Colorado. Thanks to this bill, Colorado became one of the first states in the nation to allow community solar projects and, as a result, residents across the state were afforded increased access to renewable energy.
Here’s a look into what a community solar garden is and details surrounding the Modernization Act.
What’s Considered a Community Solar Garden in Colorado?
A community solar garden is an area with a large amount of sunlight that hosts solar photovoltaic (PV) panels for the community to benefit from. Community members can invest in a set of them by buying them upfront or signing a rental agreement, which qualifies them for solar credits on their monthly energy bills.
Colorado allows community solar gardens if they meet the following requirements:
- The solar garden must produce five megawatts (MW) of power or less.
- The solar garden should have ten or more subscribers with none of them owning more than 40% of the produced solar power.
- The solar garden’s panels have to be mounted either on a roof or on the ground.
Who Can Take Part in Colorado’s Community Solar Gardens?
Solar panels face a few regulations in order for a solar project to fall under the Community Solar Gardens Modernization Act.
If a solar garden is created by a single owner, the solar power produced from the panels can either be for profit or nonprofit, but the sole reason behind creating it should be to own and operate a solar garden.
Homeowners sometimes resort to solar gardens as a source for solar-powered electricity if their roof isn’t suitable for an installation, or if the system wouldn’t receive enough sun exposure. The latter is usually the case for homes that don’t have a south facing-roof or are too shaded.
[Related: What Is the Best Roof for Solar Panels?]
If a community solar garden has subscribers, they all need to live within the same county and own at least a one-kilowatt (KW) share of the system, but that share can’t be more than 120% of their total electricity consumption.
Subscribers will receive their share of electricity as compensation for subscribing to the solar garden, alongside benefitting from Colorado-based rebates and incentives such as net metering credits or renewable energy credits.
A utility company that creates a community solar garden can own up to half of the solar garden’s energy but is required to encourage renters and low-income earners to subscribe to it.
Under the Modernization Act, 5% of the garden’s capacity is reserved for subscribers that are at 185% or below the federal poverty limit. Additionally, renewable energy credits from a utility’s solar garden can’t be over 20% of the company’s retail distribution under Colorado’s renewable portfolio standard.
How Does the Community Solar Gardens Modernization Act Benefit Colorado and Its Residents?
Colorado is an avid supporter of renewable energy in all forms, but the Community Solar Gardens Modernization Act opened doors for more than just well-off residents wanting to utilize solar power.
The Modernization Act was the first legislation to craft a section for low-income earners in an energy mandate, giving renters who might not be able to get an installation approved and those living at or below the poverty level the opportunity to utilize solar power.
Colorado’s Renewable Energy Standard (RES) for 2020 aims for 30% of the state’s energy consumption to come from renewable sources. And since the expansion of the Modernization Act in 2016 in addition to a settlement deal with Xcel Energy, residents of all income levels have access to solar power, making this an achievable standard.