Conductor Solar: Understanding the Ins and Outs of the Community Solar Market with Marc Palmer

From Big Corporations to Local Initiatives: Marc Palmer’s Journey

Kerim: Hi everyone. This is Kerim, Kerim Baran with SolarAcademy. I am here today with Marc Palmer of Conductor Solar. Marc is one of those rare entrepreneurs that is taking on the challenge of community solar in the U.S. market. I’ve gotten to know Marc over the past year, and we’ve had some really interesting conversations about the community solar market.

And we figured it would be a good idea to share it publicly, on SolarAcademy. Marc, thank you very much for being here.

Marc: Yeah, thanks for having me, Kerim. Yeah, rare or crazy, whatever you want to call it, it’s the fun market. It’s pretty neat how you can take these kind of middle-sized solar projects and let all these different homeowners and businesses who aren’t able to get solar on their roof or in their backyard and to be able to benefit from solar power and support it. So it’s a neat program, for sure, and it’s very state-specific. So it’s nuanced and excited to explore the market a little bit more today.

Kerim: Great, but before we get in there, I would like to ask you a little bit about yourself, your background, so people get a little acquainted with you. Can you tell us how you found yourself in the community solar business? Before you started Conductor Solar, what were you doing in life and in your professional career? How did you end up creating Conductor Solar?

Marc: Yeah. Yeah, happy to touch on that briefly. I am an engineering major and by trade. So I’ve always had kind of like the math and numbers focus. Chemical engineering, though, and I never did anything with it, in the chemical engineering space. 

I made a concentrated effort after a few years of management consulting to get into the renewable energy industry and started my career working on the financing side for really large scale projects. I worked for Invenergy for a number of years. Invenergy is the largest privately-held power company, I think, in the world, majorly focused on wind and solar projects, as well as in natural gas, cut my teeth, financing really large-scale projects and did a lot of solar financing with them, learning about debt and tax equity, and all these different investment structures.

And that was great, but I was excited to work on a little bit of the smaller, kind of more local feel. And so I jumped into the middle market, really focusing on C&I. Community solar was still pretty nascent back then in 2017. 

And I spent a couple of years with a company called New Resource Solutions, working on the middle market and solving financing challenges for the middle market. You’ll see a theme here. That’s a lot of what Conductor does, as well. I spent a lot of time in that world focusing on really consulting and brokerage for mainly C&I projects and a little bit community solar, taking a lot of the expertise and foundation I had on financing for really large projects with a whole team and army of people, to now these smaller projects that have a lot of people who can run a business and build a solar project, but don’t really know anything about financing, working with people who don’t really know a lot about building a solar project, and trying to help bridge some of the just conversational gaps and issues that exist.

And that really led to Conductor Solar, which is a better way to do that. It’s a marketplace, built for people in the middle market, so C&I and communities and community solar, really project sizes everywhere, as small as, you know, 20 KW, 30 KW, 40 KW up to 10 megawatts or so, a platform to help these parties find each other in a really targeted way to actually transact in a more standardized manner and to have tools to collaborate with all these details that make project financing and selling and buying projects really hard, and taking a lot of our expertise to just do it better for the whole market. 

And so we’re not a developer, we’re not a financer, but we have a lot of expertise on both sides. So to answer your question about the community solar aspect, that’s been a growing market and it’s been an increasing need that we’ve seen.

As so many markets are different across the country, there are about 15 of them that are active in community solar. And we can go more into that in a little bit, but we’ve basically gotten pulled into community solar from different solar developers, across the country, who need help and support, or want somebody to assist them in finding a really quality partner to ultimately develop and finance and own and operate these projects.

C&I and Community Solar Landscape in the US: Navigating the Growing Segments

Kerim: Got it. So you’ve been in this mid market, C&I and community solar segment for a while now, we can say, probably several years. Can you tell us about how that market is evolving and specifically community solar? But maybe in relation to other segments of mid market solar as well. I mean, obviously, utility scale solar is probably still two/thirds plus of the U.S. market, probably, worldwide, too, I would say? 

But you and I are both believers in truly distributed energy and that we will perhaps see the long tail end of that market take off one day and be as big as the utility market or bigger, perhaps. So is that happening? What does that other third of the market look like today? And what are some trends that you’re observing?

Marc: Yeah. When I think about the solar industry, and especially in the US, there’s utility scale, and that’s the largest. There’s residential, which is also pretty comparable by dollars, or at least used to be. It’s been pulling back – 

Kerim: Dollar-wise. 

Marc: – and it’s been taking the lead. Yeah, by dollar-wise. And then you’ve got the middle market.

Kerim: It is three to four times more expensive. 

Marc: Exactly. Yeah. 

Kerim: Yeah. 

Marc: And then you’ve got the middle market, which is C&I community solar, both of which are a lot smaller. So there’s about 8 billion dollars last year, in C&I and community solar projects that got built across the US. 

Kerim: Eight billion dollars. Okay. So that’s – what is, is that like 5-6 gigawatts or more or what’s the average? 

Marc: You know, probably,more like, yeah 4 or 5. 

Kerim: Four or five. It’s still averaging $2 a watt, kind of.

Marc: Yeah. Yeah. And you’ve got community solar, and I estimate that to be about 3 billion of that 8 and C&I to be about 5. And of community solar, I think there’s one and a quarter gigawatts last year, but a lot of these projects are like, 2, 3, maybe even more dollars per watt. They’re usually a little higher on the build cost than the C&I side.

Kerim: And how big are they, generally speaking?

Marc: Yeah, it all depends on the market. Some markets are smaller for community solar. And so, like, Vermont’s kind of a nuance for community solar market. It usually subscribes a couple of businesses, and they cap out at, I think, it’s 500 KW AC. And then – 

Kerim: And probably that’s the cap. 

Marc: That’s the cap. Yeah, so like 750 DC is kind of the standard project in Vermont. And then like, Minnesota, I think has a one-megawatt cap. So those are on the smaller end. And then you have some of the markets that are generally larger by volume, that are really doing most of the activity in the community solar, at least by dollars like New York. A lot of those projects are 6, 7 megawatts. Illinois, as well, kind of in the same range.

Typically, it’s like a 5-megawatt AC cap. And then they load them up to be about one and a half X per DC.

Kerim: And what does that project have to have in terms of attributes to qualify as a community solar project versus a five-megawatt utility scale project?

Marc: Yeah. So let’s start with what does community solar mean? 

Kerim: Right. 

Marc: It’s really a formal program that’s done typically by the state, where multiple residential or non-residential customers can, basically, effectively buy a portion of the power produced by a larger site. And so the benefits are, you’re able to get scale. And so instead of you and I putting a bunch of 5, 10, 20 kilowatt projects on our house and paying four bucks a watt, five bucks a watt, you can do a five-megawatt project and subscribe 200 of those people to that for two bucks a watt or a buck and 50, a watt.

Kerim: Yeah. 

Marc: And so – 

Kerim: Although they’re subscribing to the kilowatt hours, the KWHs that flow out of that project, probably for a period of multiple years, or they commit for a year or more, probably, at a time. 

Marc: Yeah. It depends on the program, and if it’s a corporate versus a residential and some programs have constraints on this, but generally they sign up for so many kilowatt hours or kilowatts, that’ll generate production, and they’ll get it at some discount, typically 10%-20% off of their rate they would otherwise pay. And so their benefit is they get support solar energy. They don’t have to necessarily put it on the roof or in their backyard. And they get a discount on their power bill. And then they typically, will subscribe for, it’s usually in perpetuity, and they can opt out whenever they want. 

Some of the businesses, some of the contracts will have some penalties, depending on how much of an anchor they are and how big of a discount they’re getting, but that depends on the state a little bit. So it can be a five-year term, and then, an evergreen, one-year renewals, or there’s a couple of different ways that can be structured.

Mapping the Community Solar Landscape: State-by-State Analysis

Kerim: Yeah. And how many such programs are, I mean, they’re all unique programs from state to state. Perhaps within a state they’re from utility company to utility company. There are different variations, too. I don’t know if that’s the case, but how many different programs or markets are there? And what’s the driving force behind them, and how is that whole landscape evolving in the U.S. market?

Marc: Yeah, I think there are 15 markets, states that support community solar and you’re right. Some of them, usually, there’s some level that’s tied to the utility area. So a typical requirement is you need to subscribe customers that are within the same utility zone. But, typically, it’s across the state that supports community solar.

You generally were seeing the trends, that oftentimes, there tend to be more left-leaning states, kind of the bluer states, but not always. So I’m in Cincinnati, Ohio. It’s where I live and Ohio has been talking about community solar for a while. It’s one of those markets that’s been on the horizon for a while.

Ohio is pretty firmly a red state, especially as of late. But Ohio has bipartisan support for community solar. Not everybody supports it, but generally because it’s a great way for farmers and people with a lot of land, flat land to monetize it and get more for it than they could from just simply farming the land.

Some of the states on the horizon that are maybe up next, you’ve got Pennsylvania and Ohio that have kind of been sitting there for a while that have people keep hoping will be that, one of the next ones to follow. Michigan seems to be getting some nice momentum, and Wisconsin. So like some of the other Midwestern states, seem to be ones that seem, could be – 

Kerim: And what are some of the other strong states that have been traditionally, really into community solar and have been strong markets for it?

Marc: Yeah, some of the earlier ones, like Minnesota was one of the earlier ones, and they, I think, they’ve got close to a gigawatt of community solar projects that are installed now. And they’re like 1-megawatts at a time. So smaller, and they’ve had, it’s even been kind of constraining in terms of like what the subscription requirements are.

I think, historically it used to be, you can subscribe in that county that the project is in, or an adjacent county, but nothing else. And so now I think Minnesota just changed it. So if you’re in the same utility, if you’re in XCel Territory, for example, you can subscribe. So Minnesota is like one of the earlier ones, and they’ve been pretty steady.

Today, I mean, I think SEIA puts out some pretty good data on SEIA/Wood McKenzie on the community solar market. And I think they estimate like 45% of the community solar in the US is in New York. And I imagine there’s a pretty good chunk in Illinois, as well. I think those are probably the two largest markets.

New York’s been declining a little bit. We can go into some of the challenges of community solar in a second. But those are some of the bigger states that are out there. So New York and Illinois, and then some of the growing states are New Jersey and Maryland. So Maryland had this long pilot program for a number of years. And just last year, they passed a program to make that permanent. And so there’s been a lot of activity and growth in the Maryland market, but it’s still nowhere near as big as New York, for example, where there’s a ton of good land, across the state.

Kerim: Any markets on the West side of the country?

Marc: Well, we almost had California. 

Kerim: Yeah. 

Marc: They passed some legislation and I guess the CPUC just, and it came down claiming it was in violation of the consumers’ best interest or something. So I think California community solar, you know, people started putting in, investing hard dollars on developing projects and getting land and all that. And I think they’re – it’s kind of a false start. It seems like it might be killed altogether. So that’s California. 

Oregon, I think, has had a bit of a market. I’m not real familiar what’s up there. New Mexico actually has just started some community solar, I think, last year, and this year, kind of the first years that they’re getting going, to get like a hundred megawatts a year.

Kerim: And how about Colorado? I think they’ve had some activity there as well.

Marc: Yeah, I think Colorado is one of the earlier ones. 

Kerim: Yeah. 

Marc: I don’t think of them as a big state. I’m not too familiar with that market to be honest. I think it was more popular. And I’m not real, can’t give you a lot of specifics on that program.

Kerim: And then what about Texas and Florida? Is it happening there or if not, why not?

Marc: Yeah. I haven’t heard of anything, any movement for Texas or Florida. Texas is a weird state with like, some areas support solar and third-party ownership, and some different options, but there are so many different, like little utility zones and ERCOTs, you know, funky ISO. And then Florida is just, I mean, the utilities are heavily in the pockets and we’re seeing a fair amount of solar in Florida. 

Kerim: Yeah. 

Marc: We typically work on PPAs and third party ownership. And so we, (Conductor Solar) doesn’t see much, but Florida has a fair amount of solar going up on the residential and some on the commercial side.

Kerim: Got it.

Marc: But too red of a state and too controlled by the utilities. Like you think about the utilities and all of like these five-megawatt solar arrays popping up around the state. Like you get a couple of them. It’s no big deal. But when you start having a lot of them and you have this non-dispatchable resource, like they’re just not used to that.

Kerim: Right.

Marc: And so at least with the trend, you’re starting to see what community solar is needing – storage – to help balance it out and provide some more flexibility for the grid.

Kerim: And is that happening on site? Are you starting to see that? Is that being developed in tandem with the solar array?

Marc: Yeah. Massachusetts is a really good example. The SMART programming, that was just loaded with projects. It’s been really slow lately because of the permitting and interconnection, some of the delays and the program as intended, the blocks have decreased, and there’s a little less value there than there used to be.

But now, I think, it’s pretty much, all community solar projects in Massachusetts require storage to be paired with it. 

Kerim: Wow. 

Marc: And they’ve got different incentives for it and different ways you can connect it, but you start to see a little activity. We’re hearing a little activity of storage being paired with projects in New York, because there’s a little bit of incentive there, but I think it’s moving in that direction, but there’s still a lot of ways to go on the storage front.

Forecasting the Growth of the Solar Market: Hot & Cold Trends

Kerim: So what do you see as the hot trends or like what seems to be working well and growing? And where do you see the opposite, like shrinking markets or maybe not so hot besides the ones… ? 

Marc: Yeah, I guess, I’d say some of the trends that we see are a couple of things. So one, on the program side, we’re seeing more requirements and specificity for providing solar and benefits to low to moderate income areas and subscribers and residents. And so you’re starting to see programs require certain amounts of the community solar projects be subscribed by these LMI – 

Kerim: – communities. Yep.

Marc: Yep, communities. And you’re also starting to see, and there are programs. Like Illinois has a whole kind of separate program targeted for LMI communities. 

Kerim: And in most of these markets, the residents are getting a 5-10% discount to their electric bill, or more, perhaps.

Marc: Yeah, usually it’s at least 10, could be more. Like for example, in Illinois, there’s a community-driven, community solar part of, so when you think about all the different awards for projects, so everybody wants to get awards for Illinois Community Solar to get RECs. And so that way they can have some nice value in the project.

There are different tiers, so most of the projects are in this traditional community solar bucket. And then there’s a carve out for a certain number of projects that have more community-driven benefits. And with those projects, for example, I think, 20% of the subscribers need to be LMI-related, and they need to be given at least a 20% discount to their power. And so typical discounts are more like 10. And so they get a little bit more of a benefit, as well.

Kerim: Got it. 

Marc: So other trends that we’re seeing, starting to see these markets that are more saturated like New York, like Massachusetts, probably Illinois, pretty soon. Interconnection timing and upgrade costs are just getting really, really large and long, and being hard for the projects.

The permitting seems to be getting harder and longer, as well. And all of that just makes it a little harder to – it’s a longer time horizon. You’re talking about some real dollars that go into developing these projects, and it’s hard to wait two years. 

Kerim: That long. 

Marc: Yeah. We’ve talked about some projects that are thinking about putting a couple of projects together to justify larger upgrade costs, but the timing on that can be like two, three, four years before those upgrades get completed.

Kerim: Wow. Yeah, it seems like the whole grid in the US is going to be so overloaded with so much extra capacity coming online. And I think it was Elon Musk’s interview that I saw recently where he was talking about where transistors and transformers are going to be the bottleneck in the growth of energy, in the US, unless we start putting batteries right on site, at the point of consumption, which is not happening fast enough.

And the batteries are still not cheap enough for that to happen for most people, or for most applications, I would say, but it’s going to eventually have to happen.

Marc: The grid’s a mess. 

Kerim: Yeah. 

Marc: There’s a lot of innovation and support that needs to go into that over time, especially as, this transition to more renewable resources is underway. And batteries are a piece of the puzzle. But they’re not the only solution, and so figuring out ways to help support the grid and the interconnection process and some of the really important equipment, like a transformer, getting those more regularly available and quicker turnaround, are all super important.

What are the Main Community Solar Market Challenges and Trends Today?

Kerim: Yeah. So what other challenges and solutions are you seeing and wanting to talk about in this conversation, in solving the growth of this mid market C&I community solar segment, which seems to be trailing vis a vis the utility under the residential market? So what needs to change for that segment to grow faster? It is still growing.

Marc: Yeah, it’s still growing. I mean, we think, we’d really expect the market to double once, if not twice in the next, probably, not even 10 years. So we think there’s a lot of growth to be had by the middle market, the C&I and community solar market. One just anecdote I’ll share. That doesn’t directly answer your question. Yeah. We, through working with a lot of C&I installers and developers, there’s not a ton of overlap in people who are doing a lot of C&I projects and ones who are doing community solar. There are some, but there’s a lot of overlap in C&I installers with residential installers. And we’re hearing that the shift of the revenues they bring in from the last couple of years to like this year, used to be 50/50 or 60/40 slanting on the residential side. And now like it’s, 80/20 commercial, 90/10 commercial, just focusing a lot more on the commercial side. 

Kerim: And these are markets outside of California. 

Marc: Yes. 

Kerim: I know if you said that was California, I would understand because things are changing quite rapidly with Net Metering 3.0 in California, but also outside of California, you’re seeing that, huh?

Marc: Yeah. I mean, we’re hearing it anecdotally. We don’t see their books, but yeah, we’re hearing a lot of people coming to us saying, “Hey, we’re looking to shift more into the C&I market.” Obviously, there’s still a ton of really strong resi developers and installers out there, but that seems to be a trend. 

Kerim: Yeah.

Marc: So one of the barriers to growth and just I guess one of the things that we really focus on to talk about is, the challenge of developing and financing community solar projects is hard. It takes a certain skillset, it takes a lot of expertise, it takes patience and thick skin because, as I’m sure you can attest to, I know of a lot of projects that took longer and cost more than expected. I don’t know too many projects that came in quicker and were cheaper than expected. 

Kerim: That’s the nature of developing anything, I guess. 

Marc: Yeah. 

Kerim: Yeah.

Marc: So you’ve got to have thick skin, but thinking about some of these larger community solar projects, it can take $200,000, not even including interconnection costs just to get a project ready to construct, going through an interconnection process, getting a site control, dealing with some legal, some permitting, some environmental stuff, a lot of engineering. So it can be really expensive. 

Kerim: Yeah. 

Marc: And what we come across is a lot of needs for support in that $200,000, either getting it ready to construct, or then once it’s permitted and ready to start construction, finding a financial partner to fund and own and operate that.

And I think what we found is that it really is so important to be clear on the roles and responsibilities of the different parties. And so if somebody is looking for a financial partner, are they looking for just a financial partner? Do they also want their expertise in development, in legal and engineering, or none of the above?

Kerim: Right.

Marc: And everybody wants a different flavor of it. So teasing out those details is really important and doing that in a way that helps you compare your options in a more ‘apples to apples’ in way is really important. Those industries have trouble doing because at least, another,  one of my favorite topics and we wrote a blog post on this a year or so ago, we’ve realized that across the country, everyone speaks a different dialect of solar. 

The resi people, the C&I people, the community solar people, they all have different dialects. And then the California ones, the people doing small projects, large projects, Midwest. Anyways, there’s like all these things that you can say. We heard somebody today mention, they were just talking about their solar project, and they were saying, “We got NTP from the utility.”

And when I hear that, like, I think, okay, great. Like, this procedure’s fully developed, permitted, all this stuff, and it just wasn’t the way they thought about things. And they explained it, and they were actually closer to where my head was at than not. But it goes to say, like, they could say that, I could hear it, and I think, great, the project’s ready to go.

And they’re like, “Well, no, I’m just talking about this one piece.” And we see that all the time. And there’s like, we’re not going to be the Rosetta Stone for mid market solar, but I mean, that causes so much friction and experiences, right? Like, if your experience has been working on small cash deals and all of a sudden you get these, like, small 100 KW cash deals and you get this one megawatt community solar opportunity, like, you’re working with a totally different counterparty and financing and the depth of it and heft of it is so different from what you’re used to, and it’s just like –

Kerim: Yeah. So what you’re saying is, you’re wishing that there was some standard way of doing these projects, perhaps.

Marc: That’s why we’re here.

Kerim: Yeah. 

Marc: Yeah. Much more standardized way that’s all of that. 

Kerim: Airbnb way of renting a home or Airbnb way of developing solar projects for the mid market.

Marc: That’s right. Like do you need to know if there’s a shower or bath in the bathroom? Bathtub? Like maybe you’ve got a little kid and you need a bathtub, but you know, it’s not necessarily clear. And so anyway, just getting like those details sometimes matter. And like do you recall, like oftentimes what we see in this market is someone’s like, “Hey, I’ll, you know, we’ll pay you $2.50 a watt for this project.” “Great. Great.” And then like, “Let’s go, let’s lock together. Let’s plan to work on this over the next 60 days. Let’s close it.” 

You find out like, “All right. And we need bonding and you actually need these monitors and not those. And your engineering standards, you know, this five-page stamp package doesn’t work. We need 40. And we’re going to want you to check in, like, every two days on like how the construction’s going. And you may not like, I don’t know if you have an administrative capacity for that, but we need that and all these things.” And then like that 2.50 becomes like effectively like 225. And it’s just super. It’s tough. Yeah.

Kerim: Yeah, yeah, I get it. Yeah. I wish there was one platform that standardized all of this. 

Marc: We’re getting there. Yeah, we’re working on that.You can’t just all of a sudden make it appear because you’re going to, I mean, you learn a ton along the way and continue to refine a little bit here and there and anyways, we’re having fun. We’re having fun building it and working on it.

Major Independent Power Producers in the Community Solar Market

Kerim: Great. Well, what else can we talk about this community solar market, as we conclude this conversation? What would you like to cover, additional points?

Marc: Yeah, I’ll talk to just a couple points about the state of the market and kind of what we’re seeing. We work with, in solar IPP or Independent Power Producers, people who own and operate these community solar projects across the country. Sometimes they develop them as well, but oftentimes, at least we’re involved. They’re acquiring them from a solar developer. And I think they just do it.

Kerim: How many such companies are there in the US, would you say?

Marc: That’s a good question.

Kerim: Like that own and operate community solar assets, the IPPs.

Marc: Yeah, maybe, I don’t know. Maybe like somewhere around 50.

Kerim: Any of them, any big names that are public companies or big acquirers?

Marc: Like there are, and I’m trying to think of some of the bigger names that are out there. There’s a number of them that are backed by really big companies, Blackstone or Aries or stuff like that. I can think of, Brookfield has, I think, two actually, Standard Solar and Luminace.

There’s a company called Nautilus, that is really solely focused on community solar. Summit Ridge Energy has been a really big, fast growing player in the space. Those are just some of the names. Cypress Creek is kind of like, almost like an OG community solar developer because they were doing all these similarly sized projects, but more in like some sort of tariff environment as opposed to community solar environment, but the same size project. So anyways, just a sample for some those. 

Kerim: Yeah, those are some of the buyers. Anyway, please continue. I cut you off, but you were saying… ?

Marc: So they’re across the country, and it’s really interesting from our perspective, seeing them go hot and cold in a market in a given year, or even within a year, like, really hungry for projects and have a really aggressive pricing and view in the first half of the year. And then all of a sudden, it changes, fairly dramatically. Their pricing for a similar project is 10% lower.

And I just find that really interesting and I think it makes sense, right? They’re hungry. They’ve got so many megawatts they need to get under commitment and want to start building. And to some extent, they become aggressive because they need to get better pricing with more scale and things like that.

But it’s just really interesting from our view to see it just changes so rapidly, for different reasons. So that’s fun, fun for us to see, and always interesting. We’re always learning it. And sometimes we think that our partners can be great for this project in a given market.

And they’re like, “Actually, we’re not in this market anymore.” And I’m like, “Oh, well, two months ago, like you were really active and excited about it.” And that doesn’t happen too often, but anyways, everybody sees that happen here and there.

Key Considerations and Tips for Developers of Community Solar Projects

Kerim: So I have one more last question, Marc. We talked a little bit about this shifting dynamic of a lot of the long tail EPCs, developer and installers focusing on 50/50 resi and C&I, perhaps, shifting a little bit more towards a 80/20 mix of higher C&I and perhaps community solar type projects in their portfolio mix. So what would be your advice to those EPCs and installers and developers starting to focus from the small resi type projects to more, larger C&I and community solar market?

Marc: Yeah, it’s a very doable jump, but it’s not necessarily easy. Because the institutional rigor that supports some of the best pricing and players who are in this C&I and community solar market typically comes with banks and tax equity and people that have a lot of specific requirements that de-risk the project because they’ve been burned by something in the past. And I think it’s really just getting a handle and making sure you understand what you’re jumping into.

If you’ve done some C&I PPAs with some of the more professional investors out there, not like you’ve got some doctor friends who you’ve convinced to own the project and set up the PPA, but really like somebody who buys and owns and operates projects for a living. I think if you haven’t done that, it’s another animal and just requires more rigor. So I think it’s getting a sense of how much you’re going to have to spend at risk to get the project to the right place for them to want to come in and start funding. 

Kerim: And I assume that means a lot of documentation, a lot of tight processes and providing lots of paperwork, pictures, documenting your development process for the benefit of the investor and perhaps some other to-do’s, post development, maintenance work and so on and so forth. Is that kind of the way to describe this? Or what else? What’s unique about that animal that a smaller residential installer/developer would not be familiar with?

Marc: I think that at the basic level, I think this should resonate well with most people. Most small kind of C&I and residential developers are used to having someone else pay for the interconnection application and process just like there.

If you’re doing this kind of community solar or sometimes larger C&I projects, you need to fund that yourself. And it can be a much more substantial check to write. And if it comes back really badly, that’s money that’s just gone. 

Kerim: Yeah.

Marc: And that’s like a different risk profile than they’re used to taking. So we’ve worked with a number of EPCs who build for four or five megawatt sites, but just for people who are paying cash for it. And now they want to do a PPA, and they’re just not used to having to do some of these things on their own dime, and then the requirements tend to be more onerous.

So thinking about a rooftop project, still not that big or that expensive, but you want to make sure your site lease, if you’re doing a community solar project is good, and that you’ve got a good legal representation there. And it’s done in a way that’s consistent with solar project financing.

You need to typically get like some sort of boundary survey and understand the title and who owns it and some of those things. If you’re doing a ground up project, it’s a lot more. It can be things that you’ve never had to do before because these ultimately are the banks who you never talked to, require a phase one environmental site assessment, wetland delineation, environmental studies, and all these things that can add 20-50K onto the project and doing that all at risk again, where if it comes back negatively, and it kills the project, like nobody else put that money in. That’s something that most people aren’t used to. 

And now there are solutions for it, right? There are these long-term owner operators who will fund and support some of those development costs. Maybe not all of them, but some of them. And as long as you’re clear about roles and responsibilities and who funds what, when, you can find the right partner to do that with you and help you grow to that next level. Maybe for a couple of projects, and then you can go off and do it on your own. 

So that’s probably the recommendation that I’d conclude with is doing it with a party that can support you as you are growing to that next level, and help you know what potholes are in front of you, can be really helpful and worth it. Yeah, you give up some upside, but worth it for a little peace of mind. That, or hire a super expensive experienced community solar developer, could work, too.

Kerim: Got it. Got it. Well, thank you very much, Marc. For the viewers it’s been great, someone who’s played with the best and the biggest solar developers at the utility scale market, now focusing on the mid market and sharing all his wisdom and experience with those, helping grow the mid market for solar C&I and the community solar segments.

Thank you so much.

Marc: Mid markets is where it’s at, Kerim. 

Kerim: Yeah. 

Marc: Thanks. Yeah, thanks for having me. A lot of fun, just talking back and forth with you, on some of these things.

Kerim: Yeah, we’ll probably do a future segment on the other attributes of, and challenges and potentials of the community solar market and beyond.

Thank you. 

Marc: Sounds great. Thanks. 

Kerim: All right.