Nexamp and Invenergy discuss challenges to solar development at both ends of the scale

In a new web conference series on solar development hosted by Kimley-Horn yesterday afternoon, representatives from community solar developer Nexamp and utility scale solar developer Invenergy met to discuss the continuing rise of the solar industry and the growing number of challenges facing developers.

Over the last few months, the Northeast U.S. has emerged as the premier hotbed for the community solar market and community solar developer Nexamp has been right in the thick of it. The company has been heavily involved in development in Massachusetts, New York and Rhode Island and is currently bolstering its pipeline in Illinois. The company now has over 300 MW of operating capacity across the U.S., a massive number considering the scale of the average community solar project.

“Most of our projects are 1-7 MW,” Nexamp’s Director of Channel Development Ethan Gyles said yesterday. “That’s the sweet spot of community solar.”

That sense of scale is a little different for utility scale developer Invenergy, which recently closed financing for the 1.3 GW Samson Energy Center in Texas, the largest single-energy project in the U.S. While community solar developers like Nexamp rely on strong state policies and contract structures, Invenergy’s scope and experienced leadership team allows the company to be more flexible and risk-taking with its development approach.

“We don’t have a pre-conceived notion of what a project or contract structure must be so long as there’s a project that can be added that will add value,” Invenergy’s VP of Renewable Development Michael Kaplan said. “We’re able to be quite nimble with changing market conditions.”

But while there is much that separates them, both developers must cope with the rising issues of grid congestion, rising development costs, and, particularly in areas unfamiliar with solar development, NIMBY issues. And regardless of the size of the project, getting it off the ground can be a heavy lift when considering the laundry list of necessities including site control, permitting, design and production numbers, and revenue, offtaker and interconnection certainty. For Invenergy in particular, finding a site with enough acreage for a solar project in the hundreds (if not thousands) of MW can be a challenge, even impossible in certain areas. And that level of scale can be intimidating to locals and municipal officials.

“The sheer scale of our project sizes has the potential to sound a lot scarier to folks than community solar projects,” Kaplan said. “But when obtaining land-use permits, we try to cast a wide net to make sure the project will still be viable following field analysis. The buildable area is always a very different number than the acreage total.”

But regardless of project size, NIMBY issues always have the potential to arise and is a growing problem for developers expanding their geographical footprints. And these issues, often born out of misinformation and uncertainty, can lead to frustration on the part of developers searching for a good fit. In extreme cases, these issues can even lead to an increase in project cost or even project cancellations altogether.

“Nine times out of 10, we can reach a solution to viewshed NIMBY concerns with some kind of screening, but we do get those cases where municipalities are particularly concerned and concealing it is just not within the economics of the project,” Gyles said. “As we expand renewables, we need to check out our NIMBYism a little and realize we may have to see a solar panel or wind turbine because we have a climate crisis going on.”

“It never ceases to amaze me how little the average person in America understands the energy industry or what it takes to turn the lights on and off,” Kaplan agreed. “We’re not going to be able to make you understand everything it takes to bring a project forward. There are a lot of questions that take complicated answers.”

Nevertheless, dealing with these NIMBY concerns is becoming a key component to successful project development and both Invenergy and Nexamp have established strategies to help stymie the concerns of local residents and officials. For Nexamp, much of that revolves around highlighting the favorable economics of cheap, local power. Meanwhile Invenergy leverages its ability to bolster the economies of communities connected to its larger utility scale developments.

“Whether it’s a first-time experience for a jurisdiction or not, the approach is similar,” Gyles said. “We want to express why each project is going to be a community good. Local, independently produced power that saves money is universally attractive, regardless of politics.”

“The number one item for getting municipalities on board for us is the economic impact study that helps identify the multiple different economic strains that our projects provide,” Kaplan said. “Plus, at the end of the day, 70 percent of our employees actually live in these communities where they work. That really seems to resonate with folks.”

In some case, Gyles says that it may be even possible for developers to help shape local policies to make them more attractive to community solar development, particularly as increasingly more communities begin to grapple with how to attract developers to their areas.

“In new markets, jurisdictions may still be crafting their first solar regulations so, trying to get involved in a way that’s collaborative, we can have some reasonable influence on that process,” Gyles said. “Expanding capacity in community solar programs with a cap is critical.”

But even in areas where community solar programs are established like the Northeast, growing grid congestion and a lack of concrete planning to deal with it is leading to rising costs for developers of all scales and even contributing to ballooning corporate PPA prices. Gyles says addressing this growing issue is critical, particularly for already crowded northeastern states.

“Interconnection for community solar particularly is a huge issue going forward,” Gyles said. “Developer activity has long outpaced grid planning. As a result, you’re seeing pervasive impacts that are saddling developers with additional costs and multi-year timelines. We can’t usually bear that kind of waiting around; it threatens to bring the industry to a halt in some of these northern states, particularly within ISO New England.”

In fact, these issues are becoming so pervasive that, in addition to focusing on other states like Maine and Illinois, Nexamp is beginning to consider shifting its focus to other project sizes or even new technologies like storage.

“We’re beginning to explore standalone storage and utility scale solar opportunities, though we’re not quite there yet,” Gyles said. “We’re eager to see new markets and favorable policies come online and are set up to go into any state that is enacting them.”