Good news for building owners in Austin: community solar has gotten a makeover! Thanks to new efforts by the city, commercial property owners can now earn long-term lease income by renting out their rooftop space for the development of community solar gardens, helping to provide energy security and grid stability for the city, while reducing electricity prices.
While Austin has had a community solar program in place since 2018, it has not experienced much growth and currently only has three active projects supplying energy to its subscribers—not nearly enough to support a rapidly growing city. However, as of December 9th, 2024, the city of Austin’s new community solar initiative went into effect. The new Solar Standard Offer program was developed by Austin Energy with stakeholder input. As per Austin Energy, “this program opens a new local solar market, provides transparency to solar developers, allows for long-term growth, creates more choices and opportunities for our customers, and accelerates our progress toward carbon-free generation.”
Here is a breakdown of the program participant types:
- System Host: An existing Austin Energy commercial customer willing to host a community solar project on their property.
- System Owner: Either the system host or a third party that leases space from the system host to install and operate a solar system for the Community Solar program.
- Participating Solar Contractor: The solar installation company applying for permits and installing the solar system.
The system owner will be compensated by Austin Energy for the power generated. All system owners will be compensated at the standard offer rate, which is currently set for $0.1124 per kilowatt hour for systems less than 1 MW, and $0.0841 per kilowatt hour for larger systems; the rate will be updated every three years. This offer rate reflects the fact that solar energy produced on location with customer loads reduces the amount of energy needed to be purchased from the ERCOT market. If the system host is not the same entity as the system owner (as is typically the case: solar development is a complicated and lengthy process that most building owners do not wish to undertake themselves), then the system host is compensated via long-term lease payments from the system owner.
Power produced by the solar project will feed into and expand Austin Energy’s Community Solar Program, which offers local, 100% renewable energy to residential customers subscribed to the program, including low-income customers participating in the Customer Assistance Program (CAP). Subscribing to a community solar program is a highly beneficial option for renters, customers with no appropriate rooftop space of their own, and customers lacking the capital to invest in a solar system themselves. At the time of writing this article, there is no availability for new subscribers to join the program, proving the urgent need for new community solar projects in the city.
At UGE, we use a full-lifecycle approach to our solar projects, meaning we develop, own, and operate all of our projects. In the case of Austin’s Solar Standard Offer program, we would be the system owner and pay property owners to lease their rooftop and/or parking lot spaces. If a property owner chooses to lease out their property to a solar developer like UGE, that would mean no upfront costs, and the property owner can start to generate passive income immediately. This is a great opportunity for property owners to create an additional revenue stream while simultaneously helping their community and the environment. UGE has over 15 years of experience in the solar industry, specializing in community solar. If you’re interested in working with us on a project, fill out the form below, and we’ll get back to you as soon as possible!
