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Clean Energy Collective '50% oversold', president says

Clean Energy Collective (CEC), the First Solar-backed leader in the burgeoning US community solar market, is currently 50% oversold, according to president Paul Spencer.

“We have 50% more sales and reservations than we have capacity in the ground,” Spencer told an industry conference recently. “At almost all of our facilities, not only are we sold out but there’s a waiting list to get in.”

Colorado-based CEC claims it has either built or is currently developing more than 100 community solar projects across the US totaling around 160MW. Many are developed in partnership with local utilities, with local ratepayers invited to buy fractional shares in the arrays.

Maintaining high levels of demand for its ground-mounted arrays – typically a megawatt or two in size – is important for CEC because it lowers the company’s customer-acquisition costs and makes its assets more attractive to potential investors.

CEC’s “all-in” customer-acquisition cost was $0.12/W in 2015, or about one-quarter the level of the average residential rooftop solar company, Spencer claims.

Unlike residential solar companies, which face “default risk” on the rooftop PPAs and leases they sign with homeowners, CEC faces much less daunting “remarketing risk” for the customers it brings onto its community solar projects.

“When you have a rooftop lease or loan, you have a risk that person doesn’t pay,” Spencer says.

With CEC’s oversold arrays, however, “the remarketing risk is literally calling the next person on the list”.

“That can take a couple of seconds,” he says.

There is also less production risk associated with community solar arrays than with rooftop systems, Spencer says. “They’re not being maintained on a singular basis with ten thousand other systems; they’re being professionally maintained … as you’d expect a utility to maintain an asset.”

Although CEC has assiduously avoided depicting its model as being in competition with residential rooftop companies like SolarCity, many observers see the two sectors as potentially being on a collision course.

First Solar, which has steered clear of the residential solar market, made an equity investment into CEC in 2014, and last year signed a module-supply agreement with the company.

While community solar makes up a tiny fraction of the overall US solar market today, many expect the sector to take off quickly in the coming years, and Spencer claims it could one day be “five to seven times larger” than the rooftop market.

The US residential solar market grew 66% last year, to 2.1GW.

Spencer refused to be drawn on how large he believes the community solar market will become, and how quickly, but he pointed to estimates that suggest the US could build 10-15GW over the next five years.

“I think the potential is enormously large,” he says. “It dwarves all other types of solar barring, probably, utility-scale.”

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