Offsite Solar: In-Front-of-the-Meter (Community Solar) #
SUMMARY:
Offsite (or “community”) solar is usually a larger-scale project at a remote location, requiring close utility coordination. Subscribers don’t install panels on their buildings but instead buy or lease a share of a larger offsite array. This approach may offer fewer direct cost savings since energy still travels through the utility grid.
Offsite Solar takes a lot more time and effort to develop, since the project is usually built at a much larger scale with multiple “off-takers” and third-parties or investors to finance the project.
These solar projects are at an off-site location and require a lot of cooperation from the utility. With off-site solar, entities can subscribe to a renewable energy program without needing to make an upfront investment and install solar panels directly on a property.
Figure A depicts an offsite solar project, connected to the utility, distributing energy to the grid.
When one subscribes to a community or offsite solar program, it does not mean that the electricity provided to the property is directly from the solar array. Once the electricity enters the grid, there is no way to separate the “green” electrons from the “dirty” electrons produced from oil and natural gas. However, offsite solar programs still increase the amount of renewable energy on the grid. It is equivalent to swapping out a supplier for a clean energy choice on paper, though there’s no guarantee a given building will receive that clean energy.
In this case, because a given facility would still rely 100% on the grid for energy, there are fewer cost savings (if any) with offsite solar.
With offsite solar, the building owner or tenant still pays for generation, transmission, and distribution costs associated with the kWhs the building consumes. There may be some cost savings, but not as much as with onsite solar.
Onsite Solar: Behind-the-Meter #
SUMMARY:
Onsite solar systems are installed on a property – on roofs, land, or parking canopies – directly feeding power to the facility. This setup often yields higher savings because it reduces the amount of electricity drawn from the grid. By generating power on-site, commercial owners can avoid various utility charges (generation, transmission, distribution) and potentially reduce demand charges.
Onsite Solar refers to a solar PV system installed on a property, connected “behind the meter”, directly feeding clean energy into the building.
For energy consumed from the grid, one is paying generation costs, transmission costs, AND distribution costs as a part of the total delivered cost of energy. Your utility bill is a function of these charges, in addition to fixed and demand charges:
There are several long-term cost benefits to onsite solar:
- Save on utility costs associated with generation, transmission, and distribution charges by lowering the amount of energy a facility draws from the grid. These charges are typically based on a $/kWh basis, or the amount of energy used.
- Depending on operating hours and size of system, lower your peak demand charges. These charges are typically based on a $/kW basis, or the peak power one consumes at any given time.
- Monetize Federal Tax Benefits and other incentives.
- Create a competitive advantage for suppliers, customers, and show employees and stakeholders that you care about the environment.
- Increase sustainability branding and property value.
One can achieve higher savings and a greater ROI with onsite solar because it entails producing one’s own energy for the building instead of “renting” energy from the grid. Everyone is susceptible to utility price increases – unless you are producing it yourself!
Some people ask if they’ll see the same savings with offsite solar. The answer is no, because it will still require one to pay the utility to deliver energy to the building (which may or may not be “clean” electricity).
Need to understand how your utility bill reflects these savings? Jump to Section 2.6: How Do I Read and Understand My Commercial Electric Bill?
Wondering how excess onsite generation is handled? Explore What is Net Metering? to learn about grid credits.Curious about the available tax benefits and incentives for onsite systems? See What Solar Incentives Are Available, and How Do They Work?