THE BLOG
12/15/2015 12:05 pm ET | Updated Dec 15, 2016

Company-Sponsored Solar: An Innovation in Clean Energy Whose Time Has Come

Steve Moilanen is a 2015 Echoing Green Climate Fellow and the co-founder and CEO of Solstice Initiative, a social enterprise dedicated to expanding access to solar power. His co-author Nathan Ratledge is co-principal investigator with Resources for the Future and founder of Apogee Economics and Policy.

The sociologist Max Weber once remarked that "politics is a strong and slow boring of hard boards."

The ongoing climate negotiations that have wended their way around the globe must have been exactly what Weber had in mind.

Five years ago, talks in Copenhagen intended to produce a new international climate agreement but instead devolved into backbiting and recriminations. It was largely by virtue of a deus ex machina event—a last-ditch effort by President Obama himself to pull the talks back from the brink—that the negotiations did not collapse entirely. Even so, negotiators that year scored only modest successes.

The picture in Paris, the host of the current negotiations, looks starkly different. Buoyed by a maturation of clean energy technologies, major greenhouse gases emitters are pledging meaningful action to address climate change. (For example, China, which Republican legislators have consistently vilified as the reason United States should continue with business as usual, has agreed to cap its emissions in the next fifteen years.)

Still, as the negotiators themselves acknowledge, the agreement produced in Paris will be inadequate to limit global warming to below two degrees Celsius, the climate target most scientists argue for. Once the ink on the Paris accord has dried, those committed to combatting climate change must redouble their efforts to press for supportive policies, test drive innovative models, and rapidly scale up promising solutions.

The possibilities for additional action are significant; the acceleration of the solar market in the United States serves as a prime example. Homeowners that once plunked down cash for solar can now lease arrays financed by Goldman Sachs; mom-and-pop installers are now being challenged by vertically-integrated behemoths like SolarCity; a technology that utilities once scoffed at now presents a major threat to the way electricity has been sold for decades.

It's against this backdrop that a transformative new model for solar is emerging. It's called community solar.

Think of community solar as a community garden for clean energy. Under community solar, households that cannot or do not want to install a system on their roof can buy a portion of a large-scale solar farm, and see savings on their electricity bill from doing so.

Community solar has evolved quickly since its inception just a few years ago. As the market matures, we see vast potential for a new application for the community solar model.

We call it "company-sponsored solar."

The idea here is that corporations would own or sponsor a community solar array on behalf of their employees.

For example, imagine you are a new employee at Amazon, which owns warehouses across the United States. If Amazon were to install a solar array at the warehouse where you work, you could, as a new employee, simply sign up to receive the solar energy generated by that array. The power produced by that system would result in an electricity bill, each and every month.

Buying clean power can now be that easy.

This twist on community solar offers benefits over and above existing approaches due to cost savings and ease in engaging customers.

To start, many corporations have available land—parking lots, warehouse roofs and corporate campuses--that could support large-scale installations. Corporations generally also have ready access to financing, including debt markets, and a lower risk profile due to diversified income. Business also generally have a balance sheet that allows them to take full advantage of federal and state tax incentives. Importantly, the company could use a significant portion of the system to produce its own electricity; this scale effect could further drive down the cost to individual share owners.

Existing community solar farms face a series of soft costs related to marketing, client acquisition and administration. Large companies on the other hand can easily reach and build on existing infrastructure to manage their employee accounts. These administrative efficiencies are yet another avenue to decrease costs for employees.

The benefits of offering such an option to employees would be multi-fold. Company-sponsored solar could help corporations meet internal emissions reduction goals and provide "green" marketing and branding benefits. Similar to other fringe benefits, offering solar to employees could also help firms with retention, morale, and recruitment, particularly among environmentally-minded millennials.

While the community solar market remains in its infancy, it will be expanding rapidly in the years ahead. Approximately a dozen states and growing offer some form of shared solar, with more soon to come on board. With emissions reductions mandated by the Clean Power Plan, many states will be looking to add sizeable amounts of renewable energy in the near-term.

All told, estimates project that community solar programs will provide over 100 MW of capacity by the end of 2015 and over 500 MW by 2020—the equivalent to tens of thousands of households per year. The cost reductions, low barriers to financing and easier customer acquisition associated with company-sponsored solar could expand this market at an even faster clip. In combination with further innovation in clean energy, the COP held five years from now may be even sunnier yet.

This article is part of a series that showcases emerging leaders' voices on a variety of issues related to social change. The opinions expressed in this article belong to the author(s). Echoing Green provides these leaders and social entrepreneurs with a two-year Fellowship, seed-stage funding, and strategic support. Learn more: echoinggreen.org.