If you want to sell the energy from your solar panels, the best way to do so is through a utility scale solar project. What is utility scale solar power? In this blog, we’ll discuss that definition as well as how you can sell your solar energy to utility companies.
Defining Utility Scale Solar Power
“Utility scale” is a broad term that doesn’t have an exact definition within the solar industry. However, the Solar Energy Industries Association (SEIA) defines a utility scale solar project as being one megawatt (MW) or larger. Other utility scale definitions can range from 5 to 20 MW. Verogy works with projects of all sizes, so we will make sure your project fits within the right specifications to sell your energy to utility companies.
Financial Models for Your Solar Installation
You know you want to sell electricity to utility companies, but how do you do that? You can do that by utilizing one of several utility scale solar financial models. The first model is a power purchase agreement (PPA). In a PPA, the solar developer owns the solar installation, and they sell the generated electricity to the power purchaser, also called an offtaker. For example, we offer PPAs to some of our clients where we own the solar array and they pay us to use the electricity. In this case, you would be the solar developer and the utility scale solar company that purchases the electricity from you would be the offtaker. This financial model usually works well for commercial and industrial solar arrays.
If you have a smaller solar installation, you can take advantage of the Public Utility Regulatory Policies Act of 1978, or PURPA. PURPA encourages economic competition for solar power generation and power delivery. If your installation meets PURPA’s requirements for a Qualified Facility (QF), you have the right to interconnect your solar array to a utility-controlled grid to distribute your energy to utility companies. Additionally, if your installation is less than 20 MW, then utility companies must meet a mandatory purchase obligation where they pay for your renewable electricity at avoided cost. Avoided cost is what the utility company would have paid to purchase or generate that electricity if your QF did not exist. This model could be a good fit for your solar installation, especially if it’s on the smaller side.
If you are a commercial real estate owner, however, you can make money off of solar by leasing your land to utility companies for their solar installations. This is less direct than the other options listed here, but it’s another good way to turn a profit with renewable energy.
What About Net Metering?
Net metering is another way to generate money for your solar array. However, it’s tied to your local utility company and how much solar electricity your commercial building uses versus how much it generates. With net metering, your utility company puts a meter on your solar installation. When the meter spins forward, you’re using the utility company’s electricity. When it spins backwards, you’re powering your company with the electricity your solar array generates.
If you use more electricity than you generate, you pay the difference between those two amounts. That difference appears on your utility bill for that month. If you generate more electricity than you use, the utility company puts a net metering credit on your monthly bill. That credit will appear as a dollar amount.
Before you look into this option, you should make sure your state has a net metering program. Connecticut, for example, is currently phasing out their net metering program. New York, Massachusetts, and Rhode Island, on the other hand, all have net metering programs in which businesses can participate. If you participate in a net metering program, it’s a great way to offset the cost of installing solar panels.
In a PPA, the solar developer owns the solar installation, and they sell the generated electricity to the power purchaser, also called an offtaker. For example, we offer PPAs to some of our clients, where we own the solar array and they pay us to use the electricity. In this case, you would be the solar developer and the utility scale solar company that purchases the electricity from you would be the offtaker.
Turn a Profit With Your Solar Array
Our team at Verogy has designed, developed, and implemented solar installations in solar markets across the United States. We’ve installed projects of all sizes, so we’re equipped to create a utility scale solar project that will generate money for you. Reach out to us today to learn more.