There’s a new clean-energy pitch coming to your mailbox or web browser in Maine: Sign up to receive power from solar farms and save 15 percent on your electric bill.
A Boston-based solar energy developer that’s planning to build three solar farms in Maine has begun a marketing campaign offering residents and small businesses a 15 percent credit on their electric bills if they subscribe to the projects, the first example in Maine of a new way to invest in clean energy that is expected to grow over the next few years.
The site plan shows the 30-acre solar farm that Nexamp wants to build in Gorham. The 5-megawatt project would be one of three solar farms to which Maine electricity customers could subscribe and receive 15 percent credit on their bills. Image by Palmer Moore
Nexamp has launched digital ads and is sending direct mail to customers in Central Maine Power’s service area, seeking to sign up subscribers for energy that will be generated by solar farms planned for Gorham, Auburn and Rumford. Each farm will have a generating capacity of 5 megawatts, enough energy to power roughly 1,500 homes.
These projects aren’t scheduled to be online until next year, but the company says it takes several months to attract the 4,000 or so customers needed to support the venture. Additionally, the projects need to win contracts that will allow Nexamp to sell power to CMP, as part of a renewable energy project bidding process expected to wind up within weeks before the Maine Public Utilities Commission.
Nexamp’s solar farms are benefiting from recently passed laws in Maine meant to encourage the growth of renewable energy projects, in this case community solar.
Community solar farms involve thousands of panels spread across several acres of south-facing land near power grid connections. They are an expanding segment of the industry because they allow households and small businesses to “go solar,” even if they are renters, their property doesn’t have a clear southern exposure or they don’t want panels on their roof or grounds.
In a typical community solar farm, electric customers purchase ownership shares in the project calculated to offset most of their annual electric bill. It can take several years to pay off the initial investment of more than $10,000, however, which is a deterrent for many people who want to invest in clean energy.
Under the subscriber-based business model being offered by Nexamp, there’s no upfront investment, long-term contract or cancellation fees. Nexamp reviews a customer’s annual electricity usage based on past CMP bills, and allocates a small share of the solar farm aimed at meeting the expected future demand.
“Every subscriber has a customer allocation, based on how much energy they’ve used in a year,” said Keith Hevenor, a spokesman for Nexamp.
Those subscriptions to purchase electricity provide a steady revenue stream and, along with state credits for generating renewable energy and government tax incentives, provide a financial path to profit for Nexamp, which develops, owns and maintains the solar farms. And because those incentives and the value of the power add up to more than the cost of the project, developers can offer a discount to subscribers.
“Our wholesale cost of producing the power is less than the retail value for which we’re credited by CMP,” Hevenor said. “Those credits are what we share with our subscribers.”
At community solar farms, the electricity generated doesn’t go directly to customers’ homes. It is fed into the area’s power grid. That has the overall effect of reducing the need for electricity generated by fossil fuel sources that contribute to climate change.
“We want people understand that we aren’t delivering electricity to their home,” Hevenor said.
A GROWING SOLAR MODEL
Subscription-based community solar projects are expanding rapidly across the country, and the flexible terms being offered by Nexamp – a month-to-month contract, no cancellation fee and a 15 percent credit – are among the best being offered, according to a recent article on the practice in PV Magazine, which covers the solar industry.
“Subscription offers in this category will become the standard offers in the near future because they are now disrupting the marketplace,” the magazine said. “Households are engaged and even becoming evangelists on social media.”
Nexamp has used this business model in states including New York and Massachusetts, signing up more than 10,000 households.
The level of discount that its customers receive varies based on state incentives and power costs, but it tends to range from 10 to 15 percent. In Maine, a CMP residential customer with an average $100 monthly bill would receive solar credits that reduce the amount they owe to $85. Subscribers would receive a bill from CMP for the cost of distributing the electricity, and a bill from Nexamp – with the 15 percent discount – for the cost of generating the electricity, Hevenor said.
Community solar farms are among the dozens of projects under construction or being planned in Maine, including utility-scale solar farms spread across hundreds of acres. This land rush has led to environmental activists sounding a note of caution, as they worry about farm and forest land being lost in the name of clean energy. They recently created a guide of best practices for siting solar projects.
In Gorham, Nexamp plans to mount 17,000 panels on 30 acres of hayfield. As it has done in New York and Massachusetts, Nexamp is considering a partnership with a local farmer to graze sheep on the land. That has the dual benefit of providing income for the farmer and managing vegetation around the panels.
REGULATOR URGES CAUTION
Nexamp’s marketing has caught the attention of the PUC, which requires companies selling power to register with the agency, provide disclosure information about their product and follow consumer protection requirements.
Mitch Tannenbaum, the PUC’s general counsel, said the consumer protection division is starting to get some inquiries about Nexamp’s offer, but hasn’t had any complaints. He advised potential customers to read contracts carefully before signing.
“This is just getting moving,” he said. “But we are getting questions. So far, we haven’t seen any fraudulent activity, but that’s what we’re looking for.”
Energy marketing has come under extra scrutiny in recent years following problems involving Electricity Maine, a competitive energy provider. After receiving complaints, the PUC charged the company with making deceptive claims about savings and other violations linked to a door-to-door sales campaign.
Earlier this year, a class-action lawsuit against the company was settled for $14 million.
Hevenor said he wasn’t familiar with the Electricity Maine saga. But he noted Nexamp has an A+ rating with the Better Business Bureau and has earned four out of five stars on reviews posted with EnergySage, an online solar shopping site.
“It’s very difficult to market a program that seems too good to be true,” Hevenor said.
CMP also sought to clarify that Nexamp and other community solar projects have no affiliation with the utility.
“CMP’s role is limited to the administration of bill crediting for community solar projects in accordance with the PUC rule,” company spokeswoman Emily Spencer said. “CMP receives information from the sponsor of the project regarding subscribing customers’ percentage share of the project and applies these percentages to the metered energy generation to determine the individual customer’s kilowatt-hour bill credit.”
Nexamp’s experience is being watched closely by Maine’s leading solar installer, ReVision Energy.
ReVision has focused on the shared ownership model for its community solar farms. It now has roughly 200 members who, after tax credits, each spend $11,100 on average to offset most of their electric bills. The company says that approach offers a stronger return on investment for members.
But Phil Coupe, one of ReVision’s co-founders, said the company is thinking about offering a subscription option later this year or in 2021, but hasn’t yet made a decision.
“Subscription solar has a legitimate place in the energy transition,” Coupe said, “particularly for folks at the lower end of the income spectrum who may not be able to afford an investment in an ownership share.”
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