Colorado helped invent community solar. Here’s how he lost the lead and plans to regain it

It was 2006 when Claire Levy, now a Boulder County commissioner, had a conversation that led Colorado to help develop a new way to build renewable energy: community solar gardens.

The idea came from a potential voter Levy met in the Netherlands during her first campaign for the House of Representatives. He owned several acres of mountain property with good sunlight, but he told Levy that his neighbors were in the shade. The situation prompted him to present an idea: Why couldn’t he build a photovoltaic installation on his property and sell electricity to his local community?

“I said, ‘Great question!’ Let me take a look at it,’” Levy recalled.

Levy realized that this concept could help address the fundamental injustice at the heart of the home solar industry. Roof panels can help reduce energy bills, but are usually not an option for renters, apartment dwellers, or even homeowners with shady properties. That’s why, after winning a seat in the statehouse, Levy passed legislation in 2010 establishing the nation’s first statewide solar garden program.

Community solar programs allow developers to build small-scale solar projects and sell subscriptions to nearby residents and businesses. By paying a monthly fee, subscribers receive a reduction on their monthly utility bills similar to the discount offered to residents with rooftop solar panels. A recent U.S. Department of Energy study found that this solution could reduce household electricity costs by 5 to 15 percent.

At least 23 states and the District of Columbia currently have community solar programs. While the concept may have its origins in Colorado, the state’s progress has stalled and other states are moving faster to develop projects. Federal data shows, for example, that New York has 10 times more solar capacity than Colorado. Minnesota has five times that.

The slow pace has recently caught the attention of frustrated state policymakers. After the 2024 legislative session, Gov. Jared Polis signed legislation to overhaul Colorado’s first-in-the-nation community solar program, finalizing a plan that officials say will help the state regain its leadership in the clean energy concept that many consider one of its brightest ideas.

Potential benefits of small photovoltaic systems

One of the leading supporters of the recent legislative changes was John Bernhardt, vice president of policy at Pivot Energy, one of Colorado’s largest local solar developers.

The plan will allow for more projects like Pivot Solar 23, a roughly four-acre community solar plant that his company owns and operates in La Salle, Colorado. The project nestles between corn fields and oil and gas production areas along U.S. Highway 85 connecting Denver and Greeley.

Unlike massive utility-scale solar farms, Bernhardt says smaller community solar projects can be placed closer to energy users, covering parking lots, vacant lots or the tops of large stores. This could help protect wild landscapes and farmland in rural areas.

Tom Brown, farmer and rancher with Brown Land & Livestock, inspects young tomatoes planted between rows of solar panels at Pivot Solar 23.

He also believes that the benefits of solar power go beyond discounts for city dwellers who are lucky enough to subscribe. By building power plants closer to energy consumers, cities could have a better chance of keeping the lights on during major disasters.

Energy from the panels at Pivot Energy 23 flows into a grid operated by Xcel Energy, Colorado’s largest gas and electricity provider. The company’s Solar*Rewards Community program manages relationships with solar developers and lowers electricity bills for subscribers.

“In our experience, there is no shortage of customers who like community solar and want to be able to subscribe and participate. The limiting factor is how much capacity is available under the program, Bernhardt said.

Colorado’s new approach to community solar

The final regulations require Xcel Energy to offer Colorado customers 50 megawatts of solar power annually in 2026 and 2027. Black Hills Energy, another investor-owned utility serving Pueblo and other communities, must offer 3.5 megawatts. The Colorado Public Utilities Commission will reassess the level of development required in future years.

Since the inception of Colorado’s community solar program, the state has built 183 megawatts of solar energy, so updated demand is on track to more than triple the annual growth rate in 2026 and 2027.

Pivot Solar 23 is social photovoltaics — Pivot Solar 23 is a community solar project owned and operated by Pivot Energy near La Salle, Colorado.

It also changes the rules local solar developers must follow to connect the project to the larger power grid. The new system allows you to estimate the cost of combining a project at the stage of obtaining the necessary land or permits. Bernhardt said similar procedures have helped other states develop local solar projects much faster than Colorado.

Another provision aims to pave the way for a wave of federal funding. Earlier this year, the U.S. Environmental Protection Agency awarded Colorado $156 million under the Solar for All program established by the Inflation Reduction Act, President Biden’s flagship health care and climate policies.

The Solar for All program aims to benefit low-income or disadvantaged residents. To ensure the subsidy is allocated, community solar programs under the revamped state program must reserve more than half of their capacity for income-qualified subscribers.

Another battle for usable business models

State Senator Steve Fenberg, a Democrat representing Boulder, sponsored legislation to accelerate community development in Colorado.

There’s a simple reason he thinks Colorado is lagging behind other states: Xcel Energy. The investor-owned monopoly has serious political power in the country and makes profits every time it builds a large-scale utility-scale solar project. The social rise of solar energy reduces the company’s ability to make money for shareholders, Fenberg said.

“They want to do (the energy transition) on their terms and in a way to make as much money as possible,” Fenberg said.

State Senate President Steve Fenberg at the podium on the final day of the legislative session. May 8, 2023

But Fenberg acknowledged that meeting Colorado’s ambitious clean energy goals will require utility-scale solar farms and community solar projects. He said negotiations on the final bill left major utilities with plenty of options to pursue large projects.

Jack Ilhe, regional vice president of Xcel Energy, said it’s also important to remember that large projects tend to be priced lower than smaller systems due to economies of scale. That’s why massive solar farms — like the ones Xcel Energy plans to build on Colorado’s eastern plains — could result in lower utility bills.

“It’s about balancing costs and benefits,” Ilhe said.