ENERGY

State regulators clear path for next wave of community solar projects

Utilities must now consider consolidated billing as New Mexico eyes 500 MWs of subscriber solar by 2030

The New Mexico Public Regulation Commission voted this month to overhaul rules for the state’s community solar program, aiming to clear away the legal and administrative snags that have stalled its rollout for years

Community solar, created from a 2021 bill that called on the commission to develop it, gives electric utility customers the savings of a rooftop solar array without actually having to lease, own and install one on their home or small business — making it easier for low-income New Mexicans to go solar. 

Passage of the new rules allows the PRC to publish requests for proposals for developers to pitch small, subscriber-based solar farms across the state. In 2023, New Mexico awarded developers 300 rights to build 300 megawatts of solar farms, each of them no larger than 5 megawatts. 

“There were some growing pains in the community solar program,” said Nick Bowman, senior manager for markets and research at the Coalition for Community Solar Access, a Washington, D.C., nonprofit that represents several New Mexico municipalities. “The utilities fought the bill after it was passed. They say it gave too much power to the PRC. Ultimately they did not prevail in their legal case.”

With the new rules, advocates hope that by the end of the decade, New Mexicans will be subscribed to up to 500 megawatts of community solar farms across the state. That would represent roughly 4% of the total power production in New Mexico. 

The coalition represents before the commission the local governments of Albuquerque, Santa Fe, Las Cruces, Bernalillo County, Santa Fe County, Los Alamos County and Taos County. 

According to Bowman, subscriber demand has thus far been strong. He predicted that by 2030, community solar output in New Mexico could total 500 MW if all the phase one and two projects are built. 

“It’s my understanding that the vast majority of those projects are fully subscribed or very, very close to it,” Bowman said. “I’m hearing from our member companies there’s been a huge interest by New Mexicans for community solar.” 

Through the community solar program, New Mexicans can purchase shares or leases of small solar farms, which produce no more than 5 MWs of power, through a state-approved subscriber organization. In exchange, customers can get a credit on their monthly electric bill for their share in the energy produced from the solar farm, resulting in savings.

The first community solar project came online in September, and there are roughly four dozen under development across the state. About 16 are fully online as of July, state regulators said. 

There is strong developer interest in the program. In May 2023, a total of 408 projects representing a total of 1.7 gigawatts of power bid into the program. That was 1.5 GWs over the program cap. The next round of requests for proposals has no publishing date, PRC spokesperson Patrick Rodriguez wrote in an email.   

Developers hope that date comes soon. President Donald Trump’s One Big Beautiful Bill Act, signed into law July 4, phased out lucrative federal investment tax credits and production tax credits for wind and solar energy projects. Those tax credits now expire Dec. 31, 2027, which means that New Mexico’s community solar projects need to start work fast to capture the incentives.

“I think it’s safe to say that no one is happy, but no one is like, ‘Oh my God this is the worst thing we’ve ever seen,’” Renewable Energy Industries Association Executive Director Jim DesJardins said of the new rules.

One of the group’s primary concerns is the fact that customers get two bills, one for their community solar subscription along with their regular electric bill. Those customers will save on overall electric costs, he said. But it may not seem that way if they are getting two bills each month. The group had advocated for a net bill credit adopted by other states. 

“It’s not just a paperwork thing. I know how I am. I’m like, ‘Why do I have two bills for the same thing?” DesJardins said. “It’s an issue of clarity, and we need to strive for clarity, and consolidated billing is a part of that.”

“The implementation of consolidated billing will require the utilities to make significant efforts and, potentially, make significant investments to modify their billing systems,” the commission said in its July 2 order, which directed utilities to come up with consolidated billing proposals and submit them to the commission. 

The commission noted that parties supported consolidated billing because it would allow subscribers “to participate in community solar programs without providing a method of payment to the subscriber organization.”

“This is a particularly important consideration in the context of the solicitation and retention of low-income subscribers, who are often unbanked or underbanked,” the commission said. 

Justin Horwath covers tech and energy for the Journal. You can reach him at jhorwath@abqjournal.com.