Co-operative Solar
Project Description
Co-op Solar is a community-driven approach to solar ownership. The cooperative structure makes solar ownership more accessible and affordable by organizing residents, removing upfront cost barriers, and leveraging economies of scale. Instead of navigating the solar installation process alone, participants join together to explore solar development and ownership cooperatively. Cooperative solar is focused on arrays that can serve a small group of off-takers through a single array. These arrays require either substantial roof space (such as vehicle storage spaces or boat houses) or land (begin by looking for disturbed land locally).
Solar ownership brings substantial benefits to the owner, including significant cost savings on electricity bills and increased energy literacy. However, true solar ownership (different from solar subscription) is often inaccessible to low and even moderate income homeowners, and particularly inaccessible for renters. Co-op solar addresses this inequity by removing or greatly reducing the upfront cost barrier while retaining true ownership (again, different from a solar subscription). By decoupling onsite arrays with the flow of benefit, renters can become solar owners as well. Additionally, the co-op model builds literacy and community around energy decisions.
It is important to note upfront that forming co-op solar involves establishing a formal cooperative, with all the accompanying legal framework. This is an involved process that includes creating bylaws and establishing a financial agreement for the co-op members. If you are in Central Maine Power territory, rather than beginning your own cooperative, you could consider joining Maine Community Power, which was developed by the Center for an Ecology Based Economy and established to facilitate cooperative solar. If you are not in Central Maine Power territory, you still might want to begin by reaching out to Maine Community Power to learn from their model and explore possibilities for working with their organization.
Why This Project Matters
Overall, co-op solar is a pathway that helps remove access barriers to solar ownership while increasing the development of distributed renewable energy resources. These projects help communities transition off fossil fuels and build a more resilient, equitable energy system. Specific benefits of the project include:
Flexibility: Participants don’t always have to live in the same neighborhood. Some co-ops span several counties, giving them greater buying power and drawing interest from multiple solar providers.
Lower Costs: Through the specific financial structure of the co-op model, the upfront cost of solar ownership is removed or significantly reduced. Depending on the specific financial structure in-place, it will take varying amounts of time for co-op members to achieve the full financial benefits of solar, but all members begin with a discount on their monthly energy bill.
Energy Literacy and Empowerment: As members learn how solar works, explore the local, state, and federal policies supporting projects, research financing options, and evaluate installation quotes, they gain the tools and understanding to make informed energy decisions and the ability to advocate for regulatory policies and structures that support these projects.
Local Benefits: These projects often prioritize local contractors, keep dollars circulating in the community, and create jobs in renewable energy. These projects also often require interconnection upgrades that improve the local distribution grid.
Democratic Ownership: In fully cooperative models, members may have an equity stake, vote on decisions, and share in the financial benefits of the project.
Key considerations:
Community readiness
While extensive energy expertise is not necessary at the start of the project, there does need to be strong interest in participants. This interest will help fuel the work involved in building the necessary energy literacy and forming the co-op, or establishing a new branch of an existing co-op program. Energy literacy and understanding the value of community ownership can grow during the process. The key is having people who want to learn and shape the project together.
Resources
“Community-Owned Solar Guidebook” developed by the People’s Solar Energy Fund
*This co-op solar plug and play was developed with the support of Beth Woolfolk.
Cost
Cost associated with forming and maintaining a co-operative:
For groups starting a new cooperative, budget at least $1,000 for early paperwork and legal costs.
Cost associated with developing solar installations:
The financial feasibility of a project varies by location. A local feasibility study will tell you what’s possible based on grid requirements, contractor availability, and site conditions. Groups will want to budget at least $5,000 for initial interconnection applications and associated grid studies.
Time Requirement
Project Planning (~6 months)
Form your team, identify the community need and clarify your vision. Explore preliminary site feasibility and develop a business/financial plan. The time needed here depends on how complex the project is and how ready the community feels. If your group and project size are smaller, expect a more streamlined and faster process.Legal and Administrative Steps (~4 months)
Choose a business structure and incorporate as a cooperative by filing with the Maine Secretary of State. Create bylaws and hold a charter member meeting. Develop a lease and secure the project site with the land owner.
Permitting and Interconnection (~8 - 12 months)
Select contractors, apply for local and state permits, and apply for interconnection. This often requires grant funding, legal support, and volunteer coordination.Secure Funding and Begin Construction (~4 months)
Once the project has received interconnection approval from the utility and all necessary permits, identify and secure funding sources, such as member investment, grants, or loans. After the funding is secure, the project can proceed with construction.
Launch operations:
Train members or hire a part-time administrator to manage membership and the flow of benefits.
From idea to operation, expect at least 1.5 - 2 years for mid- to large-scale projects. A well-supported small group can often move faster.
People Power
Aim to start with a core group of at least five committed individuals. Clear roles will help things move smoothly. See the resources section for support in building out your team.
How to:
There are two main pathways depending on where you’re located:
Option 1: If you're in CMP territory
If you're in CMP territory, consider Maine Community Power. If you go this route, then:
You can explore joining a project through Maine Community Power. They handle site selection, construction, and ongoing management. You and other residents can either buy into the project, purchasing enough panels to cover all or part of your annual electricity needs, or subscribe for a certain amount of electricity. The panels feed electricity into the grid, and your electric utility credits you for the power your panels make on your electric bill each month. Visit Maine Community Power’s website, which walks you through each step of the process.
Option 2: Starting Your Own Solar Co-op if you’re outside CMP territory
Establishing your own cooperative will require significantly more time and additional resources. You will want to establish a connection to others with experience forming cooperatives early in the process. You might consider reaching out to the Center for an Ecology-Based Economy (CEBE) and/or A Climate to Thrive (ACTT), as both have done extensive work around solar cooperatives. The Cooperative Development Institute, through the Northeast Center for Cooperative Business is an important general resource on co-ops.
The following is a rough breakdown of what the process looks like for forming a new cooperative and developing an initial solar array (sized to serve more than 10 households). Please note: smaller projects are simpler, with fewer members, a shorter interconnection process, and reduced administrative needs.
Research and Exploration
Clarify your goals: Who are you trying to serve? Are you focused on one neighborhood or several? Is your goal energy savings, ownership, education, or all of the above? This will help shape your cooperative model.
Establishing a Steering Committee
The Co-op Steering Committee will do the work of developing articles of incorporation and bylaws for the cooperative as well as a business plan. The steering committee will also oversee initial site feasibility study and development and will conduct considerable outreach to enroll initial cooperative members. Skills highly relevant for the steering committee include: business skills, legal skills, outreach/communication skills, energy knowledge, community knowledge and connections, connections to potential sites.
Solidify Project Scope and Identify Potential Sites
Begin scoping whether a solar project is technically and financially feasible in your area. Develop an understanding of how much solar generation would you need to service the community/number of households you’d like to include in an initial project. Begin a list of potential sites and establish a relationship with the landowner. After identifying possible sites, begin working with potential contractors to develop an understanding of the generation potential of each potential site and interconnection prospects. It is important to understand the feasibility of site development in your area before you progress too far.
Develop articles of incorporation and bylaws for the cooperative
You can turn to resources like The Cooperative Development Institute to help develop an understanding of the requirements within this process. Your articles of incorporation and bylaws will set the legal framework for your cooperative and need to be reviewed by a lawyer. You will ultimately submit your articles of incorporation to the Maine Secretary of State for authorization, which you must receive before you begin operating and enrolling members.
Establishing ownership structure and business plan
Determine the initial ownership structure for your cooperative. The ownership structure is a central component of your overall business plan and will directly influence the savings experienced by members. This is another important step during which to seek guidance from organizations like the Center for an Ecology-Based Economy or ACTT, as they have specific experience in ownership structures for solar cooperatives.
Build out your full business plan. Determine how much funding will be required to develop your initial array and to manage members (this often requires membership software). Identify revenue streams. Start with a five year business plan.
Develop outreach materials
Recruiting and training members
Once the foundation is in place, start outreach. Bring in new members and train them on the vision and structure of the co-op. If you're transitioning to full membership ownership, this is when you begin setting up voting processes and member responsibilities.
Pre-development phase (approx. 1 year)
You will need funding for this part, as you will need to leasee the solar site and pay for interconnection applications and potential studies.
With the potential site identified, now you will secure the host site (land or rooftop) and finalize leasing agreements
Develop and issue a Request for Proposals (RFP) for contractors
Collect and review bids
Secure the pre-development financing. Go to credit unions, Northeast Cooperative Development Fund, and start applying for grants
After funds are secured, go through permitting and engineering (getting designs), interconnection application and studies.
After receiving interconnection approval the project can move forward with construction
Launch operation
Hire someone to manage ongoing administration like handling member accounts, communications, and troubleshooting.
Establish regular board meetings and hold annual member meetings to keep the co-op democratic and community-led.