Community Solar
What is Community Solar?
Community solar refers to local solar farms that produce power sent to the utility grid for the benefit of a group of subscribers, who receive credit on their electricity bill for their share of the solar power produced. The subscribers are not the owners, and thus do not invest anything into the solar farm, just receiving credit for the solar power. The owner(s) invest in the solar farm and sell the solar power to the group of subscribers through a Power Purchase Agreement (PPA).
Process to Acquire Land for Community Solar
- ICAST conducts a desktop review of the suitability of the land, and if review is favorable, then:
- ICAST talks to potential Landowners about the opportunity to sell/lease their land for a community solar farm for the benefit of their community and Low-Income residents. If Landowner expresses an interest in either selling or leasing their land, then:
- ICAST performs preliminary due diligence over the next 45-60 days or more involving site visits for land surveys and analysis for size, orientation, transmission, wetlands, topography, soils, engineering design and prescreening with the Utility. If due diligence results are favorable, then:
- Parties will negotiate and execute an Option for land Lease or Purchase/Sale. The landowner has a choice to receive an Option payment at the time of signing of the Option, per agreed upon terms OR defer the Option payment until the Lease or Sale Contract is exercised, at which point, landowner receives a much larger Signing Bonus, per the agreed upon terms.
- Option Period - During the Option Period, extensive engineering, environmental and interconnection tests will be conducted and ICAST will start obtaining the necessary permits and approvals. If it all works out per the plans, for both Parties, then:
- Exercise Land Contract – If the Land Contract is a Lease Agreement, it will need to be concurrent with the Power Purchase Agreement (usually 20-25 years). Else the Land Contract is a Purchase/Sale Contract. ICAST will pay the owner per the agreed upon terms.
Why is the Option period for 2-years?
ICAST needs a 2-year option period to conclude all its site analysis and obtain necessary permits and approvals (we hope to finish sooner). Please be aware that in addition to all the engineering, environmental and interconnection studies that must be performed, the rules and logistics to implementing a Community Solar project requires local land permits, approvals from the utility, and sometimes from the State Utility Commission, all of which may a year or even more.
Why should I tie up my land for so long? What is in it for me?
Typical power purchase agreements (PPAs) with the utility are for 20-25 years because the life of the solar farm is typically 25-30 years. This allows for long-term steady income producing leases or a good sale/purchase price.
Upon execution of the Option Agreement, ICAST will spend considerable funds performing engineering, environmental and transmission studies, getting local permits and approvals from the Utility and State Utility Commission. ICAST is taking all the risk by spending funds that might yield nothing. This is why, if you consider taking the risk alongside us, we reward you with a handsome Signing Bonus.
What happens if the Project does not Launch at the end of the Option Period?
Rights that we would hold under the Option Agreement would all revert back to you and the money ICAST spends for studies, etc. are simply our cost of doing business and have no implications for you.
Ideal site will have the following characteristics:
- Topography - Relatively flat, although slight grade (Maximum 15% slope) is acceptable as long it does not have a north facing orientation.
- Wetland – No wetlands are acceptable since electric power equipment needs to be placed.
- Transmission - Close to 3- Phase lines is necessary and ideally close to a substation
- Zoning – Acceptable to local municipality either “as is” or with a Zoning Variance or Conditional Use Permit for a solar farm.
For more information on Community Solar and our Solar Programs, please contact:
Ravi Malhotra
Founder & President