Types of Solar Energy Companies
August 9, 2016
Solar is fast becoming the renewable of choice for communities and individuals across the nation. But within the umbrella term “solar,” there are many solar energy companies offering many different methods of clean energy implementation. From residential to local to utility to retail, the ways of obtaining solar are varied, and they require different levels of investment and responsibility on the part of the individual. At first glance, all of these options can be a bit confusing. To clear things up a bit, we’ve created a list of the main categories that solar energy companies fall into and their modes of operation.
Residential Rooftop Solar
Residential and solar energy companies sell rooftop solar installations that power individual homes and businesses. The homeowner typically obtains the system through a purchase, lease or power purchase agreement (PPA), taking advantage of the federal tax credit and other state incentives to fund all or part of the cost of installation. After installation, the solar system is usually connected to the grid so that the utility can supply power to the home when the solar system is not in operation—like at night.
This grid connection also allows the utility to take any surplus power that the system produces and deliver it to other grid-connected entities. The utility effectively buys this power from the residential system and then deducts the price from the homeowner’s utility bill. This system is called “net-metering,” and it has come under scrutiny recently in states, including California and Nevada, because utility companies claim that it allows people to enjoy the benefits of the grid without paying their fair share of the costs to maintain that grid.
Community solar is like residential solar in the sense that the solar project is an energy source operating outside of the standard utility structure, but it differs in that it is usually owned by a utility, collective, non-profit or developer. For people living in apartments or in places where the roof orientation is not ideal for solar, a community solar project provides a way for a group to buy into a larger solar project built offsite, but typically nearby. Individuals can buy a share in the project, or they can enter into a retail purchase agreement with the site’s owners to purchase energy from the site.
Large Utility Scale
The term utility-scale solar can apply to large-scale projects like the 4,000-acre Ivanpah solar power plant located in California’s Mojave Desert. This is the world’s largest solar thermal power plant and has a planned generation, once fully operational, of 940 GWh. NRG Energy, Bright Source Energy and Google own this solar plant, and its off-takers are PG&E and SCE.
Small Utility Scale
The term utility-scale solar can also apply to small utility-scale solar projects, which are the kind for which Cypress Creek is known. These projects typically range between 2 and 20 megawatts in size and cover around 20 to 40 acres. They are far smaller than what one finds in the California desert and can fit both the utility and community model. Because of their smaller scale, they can be tucked into small corners of farmland in states across the nation without creating the environmental or visual impact of an enormous generation facility.
Local solar is our personal favorite here at Cypress Creek. Local solar energy companies are companies that examine the unique needs of a community—whether it’s a community solar project, a utility off-taker situation or a retail energy market—and they build to suit.
Cypress Creek specializes in this type of small utility scale solar development because we understand that each state has its own culture, its own mandates and its own way of doing things. Nearly every state wants to update its energy infrastructure to include renewables to some degree, but the implementation plan for New York, for example, doesn’t look the same as the plan in Indiana or Ohio. Local solar means just that—solar energy projects crafted to suit the needs of the local communities and local regulatory environments in which they are to serve. Learn more about local solar here.
We hope this article helped to shed some light on the various ways solar energy companies are delivering clean energy to individuals and businesses across the nation. For a closer look at how our business works, visit our How We Do It page next.
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