Month: December 2016

4 Ways to Motivate People to Warm to Community Solar

Let’s be honest, designing a community solar product that resonates with customers, utilities, and regulators can be challenging. Many of the products we see in the market overlook customer needs and include unattractive requirements, such as upfront costs and rigid contracts. Designed to mitigate utility risk, these elements actually increase risk by hindering marketing and participation goals. While helping our utility clients launch community solar programs over the last year, we’ve gathered customer insights and marketing lessons that will help smooth the road to success for the many types of community solar products.

Share this image:

Share this image: Facebook, Twitter, LinkedIn

1. Warm up the community solar market by boosting awareness and education

There is still work to be done in offering more marketable community solar programs to customers. In our white paper, the Four P’s of Community Solar, we recommended planning for longer sales cycles as a result of premium pricing. After assisting with planning and launching several community solar programs, we can definitively say that the community solar customer’s decision-making process lags behind that of the traditional green power program customer. In our experience, aggressive launch timelines don’t provide adequate lead time for educating customers on the ins and outs of community solar — resulting in lagging sign-ups and confused customers.

The community solar customer’s decision-making process lags behind that of the traditional green power program customer.

Simply put, customers need time to educate themselves on the costs, benefits and terms of a community solar offering as well as how community solar differs from other options, such as rooftop solar. Recent market research on What the Community Solar Customer Wants, conducted by SEPA and the Shelton Group, revealed that 59 percent of Americans are interested in powering their home with solar energy. However, 80 percent of Americans are not familiar with the community solar framework. In our work across the country, we have certainly found this to be true. The good news? Once customers gain an understanding of community solar, 47 percent of them warm up to it and express an interest in participating.

2. Motivate customers with the right pep talk

In order to craft messaging that resonates with community solar customers, it’s essential to understand the participation drivers. While market researchers continue to explore customer motivations behind going solar, our experiences have illustrated that the community solar market isn’t limited to disappointed rooftop solar shoppers. In fact, customer needs differ nearly as much as the variations in community solar products.

Consider the top reasons why customers are interested in going solar. Traditionally, rooftop customers are motivated to save money, achieve energy independence and live more sustainably. With utility-led community solar programs, cost-saving isn’t always part of the offer, therefore it’s important to target the customers who are attracted to sustainability and appreciate ease of participation.

At the end of the day, community solar customers care about doing the right thing for the planet. This sentiment is reinforced time and time again during customer conversations with our nationwide outreach teams. So, it’s not surprising that the Deloitte Resources Study 2016 found that nearly 65 percent of respondents are “very concerned” about climate change and their personal carbon footprint. What does that tell us? Awareness campaigns that lead with environmental benefits can help drive customer interest. And while cost-saving is an ideal benefit, don’t underestimate the power of a well-crafted message focused on sustainability to drive engagement.  

Awareness campaigns that lead with environmental benefits can help drive customer interest.

3. Adapt your community solar launch plan to fit the terrain

Part of understanding your target audience is knowing how and when to make your move in the market. There are a number of factors that can impact how receptive customers will be to community solar, ranging from local legislation to cloudy climates. These market drivers — along with how visible solar is in the community — can help inform the timing of program launch and prioritize areas of education.

A direct approach to gauging customer interest in community solar is simply asking them what they want. Despite servicing a rainy climate, one of our northwest utility clients installed dozens of small solar projects across their territory. After raising awareness about the viability of solar in their region, they launched their first local community solar program that filled up fast. Before building more projects, they deployed multiple customer surveys to help them refine and deliver a product their customers wanted. The result? Highly visible community solar projects that sold out in a matter of weeks.  

Additionally, brand trust and recognition is an important consideration when building program awareness. While customers may not love their electric utility, a utility is known as a well-established energy provider. This is an enormous benefit when marketing a new product to customers.

4. Pace your expectations for results

Until community solar programs become simpler and more widespread, customers will have questions on what these programs have to offer. Making these answers readily available will be integral to building a positive customer experience. Likewise, the more informed customers become, the more trust and advocacy they’ll be willing to place in community solar programs. The future of community solar is promising, but to ensure customers participate, we must patiently manage our expectations for results while being thorough and intentional in our marketing efforts.

Originally published on GreenBiz.com

3Degrees Joins RECS International

Deepening our commitment to European renewable energy markets.

3Degrees is pleased to announce that we have joined RECS International, an organization committed to building global renewable energy markets that are standardized, transparent and most importantly, consumer-driven.   

“3Degrees – through its work with Green-e and WRI – has a proven commitment to building high-integrity renewable energy markets,” says Jared Braslawsky, Secretary General of RECS International. “We are proud to have them join RECS International and support our mission of creating reliable attribute tracking markets in Europe and around the world.”

Since its founding, 3Degrees has helped customers with needs for international renewable energy certificate (REC) and carbon offset products. Today, we offer comprehensive international offerings including GOs, I-RECS, TIGRs, carbon offset products, as well as PPAs, VPPAs and consulting services. We have done business in over 40 countries and are proud to be a CDP Global Renewable Energy Partner.

“More and more of our customers are looking to us to help them address their global needs around renewable energy and greenhouse gas emissions,” according to Steve McDougal, CEO of 3Degrees. “Joining RECS International allows us to stay plugged into the nuances of the European renewable energy markets and better serve our customers.”

3Degrees will be speaking at the upcoming RECS International conference in March of 2017, providing a perspective on the US RECs market.

A Western Regional Electricity Market Would Be a Boon for Corporate Renewables Buyers

Wind turbine stands over green fields

An integrated market would drop the cost of wind and solar integration, and make buying wholesale renewables a lot easier

What would an expansion of the California wholesale market to a broader Western regional market mean for businesses looking to buy renewable energy?

We recently tried to answer that question at a seminar. After a stimulating discussion with representatives from Fix the Grid, Energy GPS, MISO, and Bay Area-based corporate buyers, our takeaway is that a regional Western grid would increase the opportunity to contract for cost-effective renewable energy .

It’s well known that the installed cost of wind and solar has declined dramatically over the past several years; Lazard’s Levelized Cost of Energy Analysis 9.0 quotes a decline of 60 percent and 80 percent since 2009, respectively.

This cost-competitiveness has been a driver of the increased corporate interest in buying renewable energy via physical or virtual power purchase agreements to support their sustainability or greenhouse gas (GHG) emission reduction strategies. The creation of a Western RSO (an aggregation of state markets in Washington, Oregon, California, Nevada, Colorado, Utah and Arizona) would change the landscape for renewable energy buyers in a few different ways.

The creation of a Western RSO would change the landscape for renewable energy buyers.

A Western RSO would lower the cost of integrating renewable generation

In order to accommodate intermittent generation, the grid needs flexibility. Wind and solar cause significant “noise” in the energy system throughout the day based on the weather conditions that exist. In order to manage this intermittency, the system operator must create financial incentives for flexible and ramping products to help smooth out variability (i.e., natural-gas-fired power plants, energy storage, demand response). The operational costs of these flexible generation and load resources equate to the cost of integrating renewables.

A geographically diverse regionalized grid would increase efficiency and decrease integration costs. The amount of flexible resources required for reliability would decrease in proportion to the overall system size because the impact of localized weather events and the corresponding spikes or plunges in renewable generation are less pronounced when the supply and demand on the system are spread across a larger physical area.

Since RSOs are revenue-neutral organizations, operational costs are spread across all generators via grid charges. A decrease in the cost of integrating intermittent resources would result in lower operating costs for renewable generators, allowing developers to pass through a more competitive PPA price to the buyer.

A Western RSO would increase the value of renewable energy in the wholesale market

Once a seller and a buyer agree to a PPA price, the buyer reaps the benefit of the energy price and the renewable energy certificate price in the market. In CAISO, the value of renewables, specifically solar, has decreased over time as more generation has been integrated into the system. This is largely due to oversupply when the sun is shining.

FIGURE: Historical and Projected Wholesale Market Value of Solar in 2025 With and Without a Western ISO (WISO)

Historical and Projected Wholesale Market Value of Solar in 2025 With and Without a Western ISO (WISO)

Source: Energy GPS

Before significant solar capacity was installed, periods of high solar production were closely correlated with periods of high energy usage (hot days mean more air conditioning) and peak electricity prices. Now, with more than 10 gigawatts of solar installed across CAISO, the periods of maximum solar output more frequently correspond with low or negative wholesale prices.

The degraded solar value is problematic for businesses that may be buying solar via a virtual PPA, under which they benefit from wholesale prices above the PPA rate but are required to pay the delta when wholesale prices fall below the PPA rate. Within a Western RSO, it would be easier to move power around the grid thanks to alternate transmission paths, and renewables can become a cost-effective export during periods of over-generation.

Analysis from Energy GPS estimates that the average wholesale price for solar in 2025 would be ~120 percent higher if the West moved to a regionalized grid.

A Western RSO would allow for a broader array of transaction structures for corporate buyers

By expanding CAISO market constructs to neighboring states, physical purchases and virtual PPAs would be available to buyers throughout the Western grid.

Under the current grid structure, a business that is interested in purchasing Washington wind via a virtual PPA is likely to transact at the Mid-Columbia trading hub (one of two liquid points in the Pacific Northwest). The buyer would bear the costs associated with delivering and liquidating power to the trading hub, including transmission, logistics, and the bid/offer spread.

Additionally, the buyer would be subject to pricing at Mid-Columbia that is less reliable and more at risk of volatility than a hub within an independent system operator (ISO) territory; Mid-Columbia is an “informal” hub and lacks the formal market rules that come with an ISO.

Alternatively, a similar project in CAISO would face none of the delivery costs and would be earning revenue from capacity payments (resource adequacy). The buyer would also benefit from greater wholesale price certainty at a hub that is subject to ISO market rules (such as NP-15 or SP-15). If both projects started at the same price, the CAISO project could be delivered at a lower cost to the corporate buyer. Moving to a Western RSO would increase the availability of cost-effective transaction structures for corporate buyers across the Western grid.

As detailed above, the creation of a regionalized Western grid would be beneficial for businesses looking to purchase cost-competitive renewable energy and decrease their Scope 2 GHG emissions. When considering renewable energy purchases in the West, corporate buyers should also keep in mind that an expanded RSO will allow for a cleaner grid overall — integrating renewables across a broader geographic region can reduce the need for redundant baseload resources and support the shutdown of fossil generation.

With a regionalized Western grid, there will be more options for buying cost-effective renewables, and the energy from your utility will be less carbon-intensive. In our opinion, these benefits add up to a very compelling case for business to support an expanded RSO.

With federal climate policy uncertain, it is increasingly important for renewable adoption to be driven by cities, states and the private sector.

For more information on the Western RSO, visit www.fixthegridwest.org.

Originally published on GreenTechMedia

More on 3Degrees +

3Degrees named Best Trading Company by Environmental Finance

Creative products and stellar service sets 3Degrees apart

3Degrees was again named the 2016 Best Trading Company in the Renewable Energy Certificates (REC) – North America category by Environmental Finance magazine. This is the second year in a row the company earned the top position and is based on a survey of customers and peers.

The award reflects the value 3Degrees products and services bring to partners throughout the voluntary and compliance marketplaces. “These markets are complex and ever-shifting,” explained Scott Eidson, Vice President of Environmental Markets. “In response, 3Degrees has developed flexible products that use renewable energy certificates as well as other solutions to help clean energy suppliers and buyers mitigate risk and meet carbon reduction goals.”

3Degrees products and services span the globe including North America’s most complex markets such as the WECC, PJM, New England and Illinois but it is the extensive industry knowledge and focus on high-touch customer service that keeps hundreds of energy suppliers and buyers returning to Scott’s team each year. “Our focus on relationships and ease of transacting gives our partners a simple way to support the type of clean energy that is most beneficial to their business and geographic location.”

Since 2015 3Degrees has transacted  more than 90 million megawatt-hours of renewable energy from over 500 facilities – with nearly 50% of those facilities coming online in the last six years. Overall, this is the fifth time 3Degrees has earned a top designation by Environmental Finance readers in this category.

Find out more about RECs available from 3Degrees