New Mexico community solar market on the verge of opening

Legislation that will bring community solar to New Mexico is heading to Governor Michelle Lujan Grisham’s desk after passing through the Senate concurrence process earlier on March 18. Once signed, the new law will set in motion the creation of the state’s community solar market.

“This will expand access to renewable energy to customers who never had access to it before,” Kevin Cray, mountain west regional director for the Coalition for Community Solar Access (CCSA) said.

In addition to generating hundreds of millions in economic benefits and creating thousands of high-quality jobs, bringing community solar to New Mexico will lower the monthly electricity bills of subscribers by about 10-20%.

Because low-to-moderate income customers and service providers, like public housing authorities and shelters, must represent 30% of capacity generated from the community solar projects, the new bill will help out some of the state’s neediest residents, Cray said.

Under the new bill, New Mexico’s Public Regulation Commission (PRC) has until April 1, 2022, to develop rules for the state’s new community solar market. The bill also tasks the PRC with evaluating the program and reporting to the legislature on its progress after the program’s first three years. During this phase, up to 200 MW of community solar can come online.

According to Cray, the 200 MW cap was key to the bill’s passage. Last Saturday, the state’s investor-owned utilities said they could support Senate Bill 84 if the amount of community solar projects allowed was lowered from 300 MW to 200 MW during the community solar program’s first three years.

Coming to an agreement with the utilities was a key step in both ensuring the passage of the bill and bringing the Governor the consensus-based approach she has been asking for. Having a prescribed review of the program by the PRC will allow them to evaluate the benefits that community solar is bringing to the state based on real world experience and also provide an opportunity to expand the market as well as make recommendations for how the program can be improved.

Enabling legislation for community solar has consistently stalled in New Mexico, the U.S.’s second sunniest state. Advocates for community solar often tout its potential, but utilities have consistently opposed community solar, often on grounds that it might negatively impact those who are not participating in community solar programs.

To address this utility sector concern, the three-year look-back study and additional consumer protections were added to the bill.

The bill grants utilities the renewable energy credits generated from community solar projects supporting their compliance with the state’s Energy Transition Act. For most utilities, the last 20% of a decarbonization plan is often the trickiest hurdle to clear, and under New Mexico law, investor-owned utilities and rural electric cooperatives must be carbon-free by 2045 and 2050, respectively.

Under the new community solar bill, in addition to residents, local and municipal government offices, rural community colleges, religious organizations, public housing facilities, K-12 schools and Native American tribes and pueblos can also participate in the program.

“All New Mexicans deserve to benefit from the renewable energy transition and have access to the benefits local solar projects provide. Community solar provides a pathway,” said Ben Shelton, Conservation Voters New Mexico’s political and policy director. New Mexico’s tribes and pueblos have been invested in this since the beginning, he added. “They are looking at this as an area where they can grow an expertise and make a boutique industry out of it.”

If all goes as expected, New Mexico’s first community solar projects will be awarded next spring, Cray said.

News item from the Coalition for Community Solar Access

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