Overview of the advantages and alternatives from group photo voltaic for industrial property house owners.
CBRE
NORTHAMPTON, MA / ACCESSWIRE / May 6, 2024 / CBRE Group, Inc.
America’s Solar Surge
As the US invests in renewable power, solar energy continues to achieve momentum, with installations rising 22% yearly over the previous 10 years.1 and 51% in 2023 solely.2 According to the Solar Energies Industry Association, this progress is pushed by:
- Reduced price of photo voltaic photovoltaics (PV) installations
- Increasing demand for sustainable electrical energy from the private and non-private sectors
- Federal insurance policies such because the photo voltaic Investment Tax Credit (ITC) and, extra lately, the Inflation Reduction Act (IRA)
By the top of 2023, there will probably be greater than 179 gigawatts (GW) of photo voltaic capability put in throughout the nation, sufficient to energy roughly 33 million houses.3 The US Energy Information Administration initiatives {that a} document 36.4 GW of photo voltaic capability will probably be added to the power grid by 2024.4
While rooftop photo voltaic continues to be a recreation changer for a lot of property house owners, it isn’t at all times an choice for others, particularly renters and low- and moderate-income households ( LMI). LMI households are sometimes renters and subsequently it’s tough for them to steer property house owners to put in on-site photo voltaic. To overcome these obstacles, the idea of photo voltaic group emerged in 2010, giving prospects entry to photo voltaic power with out the necessity to set up PV panels. In the final 10 years, the photo voltaic group has skilled a median annual progress price of 80%, reaching roughly 6.49 GW by the top of 2023.5 Looking forward, group photo voltaic is projected to double by 2028,6 attain 14 GW.
This Viewpoint goals to spotlight the advantages and alternatives from group photo voltaic for industrial property house owners, significantly in city areas with excessive renewable power demand however restricted properties that may accommodate on -site photo voltaic.
1, 3, 5 https://www.seia.org/solar-industry-research-data
2 https://www.seia.org/us-solar-market-insight
4 https://www.eia.gov/todayinenergy/element.php?id=61424
6 https://pv-magazine-usa.com/2024/02/20/us-community-solar-installations-expected-to-more-than-double-by-2028/
What is Community Solar?
According to Altus Power (a full-service photo voltaic firm providing distinctive industrial, industrial, and group photo voltaic options centered on prospects from coast to coast), the photo voltaic group offering native companies and residents with entry to renewable power and its advantages by distant entry to present. photo voltaic installations. By subscribing to a group photo voltaic undertaking, property house owners can scale back their carbon emissions and electrical energy prices with out altering their roof or residence. This revolutionary enterprise mannequin encourages cleaner power in the neighborhood and is designed to offer renewable power entry to those that can’t set up photo voltaic panels as a result of causes similar to restricted roof house, shading, previous electrical techniques, excessive prices, or as a result of they do not personal the constructing.7
Essentially, group photo voltaic members are members of a shared photo voltaic undertaking positioned in a bigger, off-site location similar to a big photo voltaic utility facility, a photo voltaic farm or a close-by industrial or retail property. Each member pays for a share of the power generated by a group photo voltaic array; in return, members obtain a credit score on their electrical energy invoice for the power generated on their half. Community photo voltaic not solely lowers carbon emissions, however usually reduces elevated working prices for property house owners.
7 https://www.altuspower.com/community-solar-faq
How does the photo voltaic group intersect with industrial actual property?
Involving the photo voltaic group into industrial actual property methods may be aligned with environmental objectives and enterprise pursuits. The intersection between group photo voltaic and industrial actual property happens when property house owners select to host group photo voltaic initiatives. This sort of partnership usually includes industrial property house owners leasing rooftop or land house to accommodate photo voltaic installations. Community photo voltaic installations usually enable a photo voltaic developer and actual property proprietor to extend the dimensions of the PV system, additional growing the financial alternative for the property proprietor. Community photo voltaic permits property house owners to generate renewable power whereas additionally creating extra income streams by underutilized areas. Community photo voltaic not solely strengthens the steadiness and reliability of {the electrical} grid, but additionally helps stabilize power prices and demonstrates a dedication to sustainability.
Business Opportunities and Community Impact
For industrial actual property house owners with rooftops able to accommodating photo voltaic panels, the income alternative comes from two choices: i) “behind the meter” photo voltaic that serves the lease, and ii) group photo voltaic. The first choice supplies clear energy to the tenant and for on-site operations, lowering utility prices whereas serving to them meet sustainability objectives. With group photo voltaic, the clear energy generated is fed into the ability grid and lots of group members should purchase the power, usually at a reduction, with out the necessity for website management. Community photo voltaic initiatives promote sustainability by growing the adoption of renewable power, lowering greenhouse gasoline (GHG) emissions, and lowering reliance on fossil fuels—a significant contributor to local weather change.
Involving the photo voltaic group into industrial actual property methods may be aligned with environmental objectives and enterprise pursuits.
Where are the important thing group photo voltaic initiatives?
Since the beginning of the primary group photo voltaic undertaking in Ellensburg, WA, in 2006, its fast progress has been aided by numerous state packages. By 2022, there will probably be 2,550 group photo voltaic initiatives nationwide, with 93% of them positioned in 10 states. The prime states for group photo voltaic installations embrace Florida (27% of all installations), New York (19%), Minnesota (14%), and Massachusetts (14%)8; nevertheless, many of those initiatives are carried out as a part of utility-specific packages that aren’t obtainable to industrial actual property house owners.
According to Altus Power, probably the most energetic states for group photo voltaic in giant industrial buildings are Illinois, New Jersey, New York and Maryland, as a result of enticing state laws and ample provide of actual property.
Market Share of Community Solar & LMI Capacity within the US
The focus of group photo voltaic in 10 states exhibits the essential function that state insurance policies and rules play in driving adoption. In addition, federal insurance policies, such because the ITC—which was expanded as a part of the Inflation Reduction Act (IRA)—and state-level insurance policies, such because the Renewable Portfolio Standards (RPS) that require electrical utilities to generate a sure proportion of their power from renewable. assets and web metering to offer credit for photo voltaic power added to the grid, all encouraging participation and funding. Additionally, the numerous drop in photo voltaic prices has improved the financial viability of group photo voltaic. As photo voltaic set up prices proceed to say no and favorable state-level insurance policies are carried out, group photo voltaic initiatives will turn into extra accessible to LMI households, permitting extra people to affix a low carbon future.
Case Study for CRE
Learning From Solar Success in Neighboring States
In many city areas, there may be not sufficient appropriate land close by for ground-mounted photo voltaic installations. Instead, it’s extra useful to make use of giant industrial and retail industrial property roofs. By using these huge rooftop areas, native communities could make renewable power accessible to a wider vary of people, together with these with decrease incomes. This strategy not solely addresses land limitations but additionally encourages collaboration between the residential and industrial sectors, fostering a mutually useful surroundings the place the power generated advantages the area people and communities. industrial entity. It promotes sustainability whereas maximizing the potential of present infrastructure, making certain that renewable power sources turn into an integral a part of underserved communities which are usually affected by air pollution from fossil fuels.
In the case examine beneath, CBRE Econometric Advisors makes use of our proprietary industrial property information to check the group photo voltaic potential of 4 cities. Two markets with group photo voltaic initiatives (New York City and Chicago) are in comparison with cities in the identical areas (Philadelphia and Detroit) that plan to develop packages. The examine exhibits the potential monetary and environmental advantages that group photo voltaic initiatives can convey as rules and packages evolve. Although the quantity of financial savings varies by location, undertaking particulars and power consumption, group photo voltaic subscribers can save as much as 20% yearly.9 In the case examine examples, subscribers in New York and Chicago can save 9-10% yearly on their electrical energy payments.
Net Metering Law
Virtual Net Metering
Potential Savings to Subscribers
Sources: NREL, SEIA, EnergySage, CBRE Econometric Advisors.9 https://www.energysage.com/community-solar/community-solar-savings/
CONCLUSION
Community photo voltaic supplies a cheap manner for communities to have interaction in sustainable power options. Benefits embrace extra clear power for native communities and, for property house owners, extra revenue alternatives, much less reliance on fossil-fuel power sources, and compliance with Government Building Performance Standards (BPS) or different local weather mitigation measures.
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