Washington DC Community Solar Policy Guide for Asset Owners & Developers

Everything you need to know about Washington DC’s current community solar legislation, eligibility rules, crediting mechanism, and other important market details - created by Perch’s internal policy team. We help asset owners navigate the growth of community solar in markets across the country, and as new laws are considered and passed, Perch will provide updates and perspective on how it impacts your business.
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1. DC’s Community Solar Program

The District of Columbia has one of the most ambitious renewable energy plans in the country with a goal to achieve 100% renewable energy by 2032, with 5% coming from solar generated within the District. Since the nation’s capital is limited geographically, the bulk of that energy will come from outside the city. The Renewable Portfolio Standard (RPS) updated in the Clean Energy Act of 2018, requires DC to generate 10% of its energy from solar within the District itself by 2041. Community solar in DC is one of the necessary strategies to achieve the city’s renewable energy goals.

The District refers to community solar projects as Community Renewable Energy Facilities (CREF) and they are connected to the only electric utility, Pepco. Pepco runs the normal DC program for residential and commercial customers who receive Community Net Metering (CNM) credits on their electricity bill. There is no capacity cap on the development of CREFs in the DC community solar program. Pepco does not have a low-income community solar program. Instead, the city’s Department of Energy and Environment (DOEE) and the Sustainable Energy Utility (DCSEU) are partners of Solar or All, a program administered by a third party to reduce low-income households’ energy bills by 50%.

DC generates a little under 200 megawatts (MW) from all types of solar, of which approximately 30MW are community solar. In order for DC to meet its 10% solar requirement, it will need to grow substantially and install an additional 665 MWs.

2. Project Specifications

All CREFs in DC are subject to the following requirements:

  • Maximum 5 MW system size
  • Minimum of 2 subscribers
  • Projects must be physically located in the grid serving DC
  • Subscription size maximum of 120% of a customer’s annual energy usage
  • Customers may have more than one subscription provided they don’t exceed 120% of their annual energy usage
  • Subscriptions are portable if the subscriber stays within the same utility territory
  • All subscribers must be within DC

3. Solar for All low-income program

In DC, ambitious goals come with ambitious levels of savings for low-income households. Solar for All’s target is to extend the benefits of solar energy to 100,000 low-income households and to reduce their electricity bills by 50% from the average residential electricity bill in 2016 by the end of 2032. Low income is defined as households at or below 80% of area median income.

Between 2019 and 2021, the DCSEU worked with developers to install more than 160 CREF projects that will provide bill credits to 6,000 income-qualified families which will see $40 million in projected savings over the 15-year course of the credit program.

Homeowners and tenants can qualify by meeting the requirements below:

  • Supplemental Nutrition Assistance Program (SNAP)
  • Temporary Assistance for Needy Families (TANF)
  • Supplemental Security Income (SSI)
  • Low Income Home Energy Assistance Program (LIHEAP)
  • Income qualification

Solar for All is a separate program administered by a non-profit, Groundswell, in partnership with DOEE and DCSEU. Projects register and customers are enrolled & managed by Groundswell. The program is funded annually by the Renewable Energy Development Fund.

4. Credit Mechanism and Incentive

SREC Incentive

Washington DC’s community solar program is structured for a high value of solar renewable energy credits (SREC). SRECs are valid for 3 years from the date of generation. This works in tandem with the alternative compliance payment (ACP) which effectively caps the value of SRECs in the District. The ACP incentivizes electric suppliers to meet the District’s RPS goals or pay the fee for each megawatt-hour (MWh) for any SREC shortfall. A steady decrease in the total value of compliance payments indicates the success of the program. The current ACP is $500 per MWh and the current value of an SREC hovers around $400 with some variance from market conditions.

The ACP is scheduled to diminish on a schedule through 2024 and will lower the value of SRECs over time. The current schedule is:

  • $500 per MWh for 2016 – 2023
  • $400 per MWh for 2024 – 2028
  • $300 per MWh for 2029 – 2041
  • $100 per MWh for 2042 and beyond

Customer Credit Rate

Credit rates will be applied to a customer's each billing month and will be allocated by multiplying the quantity of kilowatt hours allocated to each subscriber by the subscriber's CREF credit rate. The CREF credit rate is equal to the standard offer service (SOS) rate for the General Service Low Voltage Non-Demand Customer class or its successor.

CREF Rates October 2022:

  • Commercial: $0.075
  • Residential: $0.148

Other Credit Program Details

  • Community Net Metering (CNM) will appear as a line item on energy customers’ bills
  • Unused bill credits roll over to the next month for up to 12 months.
  • The credit program length is 15 years

5. Market Analysis

The District’s renewable energy goals enshrine community solar as a priority. Minimally, 100,000 LMI households are supposed to receive the financial benefits of community solar. Beyond the Solar for All program, there are many potential customers in businesses, national NGO headquarters, government buildings, and many hundreds of thousands of residents.

Electric Utility: Potomac Electric Power Company (Pepco), subsidiary of Exelon

  • Serves 312,000 in DC, 894,000 total in both DC and Maryland

6. Appendix

Utility Territory Map

Utility territory map of Washington, DC

Solar for All program

Other considerations and resources

Other state community solar policy guides from Perch

 

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