Chugach Electric Launches Community Solar Project, Others May Follow Soon
Published March 24, 2025
By Brian Kassof
Note—Although AETP is fully editorially independent, it receives its funding from the Alaska Public Interest Research Group (AKPIRG), which is mentioned in this story.
Chugach Electric Association (CEA) recently announced it will open the application period for its community solar project on April 1, with the project coming online in July. CEA also announced that the per panel subscription rate will be considerably lower than the one proposed last year, falling from $267 a year to $110. The drop in price is due to an increase in the project’s size (from 1,280 to 1,560 panels) and the expectation that it will receive an investment tax credit worth 40% of the project’s cost. (More information on the project and how to apply can be found here; CEA’s updated submission to the RCA can be found here).
The program will allow CEA members unable to install solar panels on their own homes or businesses to support renewable energy production and receive credit for the power their panels produce. CEA is building and will operate the 650-kilowatt (kW) array located near Dimond Center in Anchorage. Members will be able to subscribe to 1-20 panels. At current CEA rates, participants will pay a small premium to participate (roughly $14 a year per panel for South District members, $30 for North District members). In the future participants may save money if rates increase.
This will be the first community solar project in Alaska, although others may follow soon. Golden Valley Electric Association (GVEA) recently announced that it intends to convert its existing solar array in South Fairbanks to a community solar project. In 2024, the Legislature passed SB 152, the Saving Alaskans Money with Voluntary Community Energy (SAVE) Act, which will require some utilities, including the four Railbelt cooperatives, to accommodate community energy projects. The Regulatory Commission of Alaska (RCA) is still developing the regulations required by this bill, which are due by November 11. Because they are being launched before the RCA finalizes its regulations, both the CEA and GVEA projects will not be covered by SB 152, and require separate RCA approval. CEA received approval for its project in February 2024; GVEA has not yet submitted a proposal to the RCA.
What is Community Solar?
Community solar projects allow utility customers unable to install their own solar systems to enjoy the benefits of solar energy—these include energy savings and promoting renewable power generation. They allow utility customers to buy or rent one or more panels in a large solar array and receive credit for the power they produce. There are a number of reasons why some people cannot install their own solar energy systems, including poor solar exposure, living in a multi-unit dwelling (such as a condominium), renting, or lacking the funds or access to credit needed to buy a solar array (which cost over $10,000 in Alaska). Community solar projects are also seen as a good way to bring additional renewable generation on the grid quickly.
Community solar projects are quite popular in other parts of the United States. A National Renewable Energy Laboratory (NREL) database from June 2024 lists over 3300 such projects that have opened since 2003. The NREL database lists one existing Alaskan project—the Shungnak-Kobuk Community Solar Independent Power Producer project, which opened in 2021. This is actually an independent power producer jointly owned by the Native Villages of Shungnak and Kobuk, and does not have individual subscribers. CEA’s project will be the first in the state.
CEA’s Updated Proposal:
The program will operate much like CEA’s current net-metering program for members with their own solar arrays. Participants will subscribe to 1-20 panels and receive credit for the power they produce on their monthly bill (this is why community solar is sometimes referred to as “virtual net metering”). The energy produced by participants’ panel(s) will offset an equivalent amount of power on their monthly bill on a one-to-one kWh basis (a net offset, hence the term “net” metering).
If the panel(s) produce more power in a month than a member uses, they will receive a credit for the surplus, to be deducted from a future bill. The value of this credit will be based on CEA’s non-firm buyback rate, which is pegged to its avoided cost—the amount it would otherwise pay to buy or generate power. This rate is much lower than the retail cost of power. Current CEA retail residential rates (the value for offset power) are 23.6 cents per kWh for South District members, while the non-firm buyback rate (the value of power above a member’s monthly usage) is 5.7 cents per kWh. These are the same terms as CEA’s regular net-metering program.
CEA forecasts that each panel will produce 399 kWh of power the first year, with a slight (less than 1%) decline in output each subsequent year. Actual output of individual panels will not be measured; CEA will assign a proportional amount of the entire facility’s monthly production to each panel.
Based on this estimate, members participating in the program initially will likely pay more in subscription fees than the value of the power their panels generate. At current CEA residential rates, 399 kWh of power would cost a South District member $95.63, $14.37 less than the $110 per panel subscription rate. Because North District rates are lower (due to the BRU Capital rebate), the difference for members in that area would be $29.90 per panel a year. The gap would be even larger if members subscribe to multiple panels whose output exceeded their home power use in the summertime, since the excess power would be valued at the lower buyback rate.
The economics of the program may change in the future. CEA is only guaranteeing the $110 per panel subscription price for the first year; the charge may be adjusted upward or downward to reflect actual operating costs. Projections included with the updated RCA filing indicate that the per panel cost (and correspondingly, the subscription cost) is expected to rise slightly each year, reaching an annual the per panel cost of $117 in 2035 and $130 in 2050.
The value of the energy produced by the panels will also change along with CEA’s rates. If, as expected, CEA is forced to use more expensive imported LNG for part of its generation in the near future, then the value of net-metered kWhs will rise. Participants must commit to an initial 12-month subscription period, but after that can withdraw from the program at any time without penalty. Only CEA members with active accounts can participate in the program.
The current per panel price assumes that CEA will be able to claim an investment tax credit for 40% of the project’s cost. While CEA believes it will receive this tax credit, in a supplementary filing with the RCA it acknowledged that it will have to raise the per panel subscription rate if it does not. The estimated monthly cost without the tax credit is $14.06 per panel ($168.72 a year). If it is forced to raise the subscription fee for this reason, the increase would not be retroactive and participants would have the option of withdrawing from the program with no penalty, even if the initial 12-month subscription period had not ended.
Applications to participate in the program will open on April 1 and run through May 15. Members will indicate how many panels they want to subscribe to at the time of application (with a limit of 20 per member). If there is more demand than panels available, CEA will conduct a lottery, with those not being selected placed on a waiting list. If the project is not fully subscribed as of May 15, CEA will extend the application period. If there are any unsubscribed panels when the project comes on line, CEA will treat their output as generation from a utility-owned plant. The project’s overall impact on CEA’s energy profile will be minimal—its anticipated output will only meet 0.03% of CEA’s annual demand.
This is a 3-year pilot program, during which CEA will gather information. At the end of that period, it is possible that the program’s rules and pricing may be changed.
Earlier Versions of the Project:
CEA had first proposed creating a community solar project in 2018, after a member survey showed that a majority of CEA members supported the idea and that over a third were willing to pay a premium to participate. That program was substantially different from the current proposal and was ultimately rejected by the RCA, which complained it was not well-developed and termed it “too confusing and undefined to offer to the public.”
The current program was proposed in December 2023. Its initial subscription price was far higher, $267 a year per panel ($22.77 a month). The price drew criticism from some renewable energy advocates. In a letter to the RCA, the Alaska Public Interest Research Group (AKPIRG) argued that the project’s financing, construction estimates, and contributions to CEA’s margin (its revenues above costs) made it far more expensive than it needed to be. As a result, its power would cost seven to nine times as much as that of recent large-scale solar projects, such as Renewable IPP’s Houston Solar farm. AKPIRG worried that this would create a perception that community solar was uneconomical, although most community solar projects in other states lower participants’ energy bills. The RCA approved CEA’s proposal in February 2024, but it required CEA to post AKPIRG’s letter on its website.
CEA submitted its updated proposal, with the lower prices, on February 10, 2025. According to CEA, the decrease in subscription costs was driven by two factors. The most significant was the deduction of the value of the 40% investment tax credit. This, in turn, reduced interest and depreciation costs (as well as the margin, which is based on a percentage of revenue).
Second, CEA increased the project’s size by about 20%, from 1,280 panels to 1,560, which lowered the per panel construction and operation cost. Several other changes also appear to have helped lower costs, including the elimination of a $200,000 charge for billing system modifications included in the original proposal. In February 2025, AKPIRG provided CEA with an updated letter that recognized the utility’s efforts to bring down subscription prices and its willingness to be the first Alaskan utility to undertake such a project.
GVEA’s Community Solar Project:
In December 2024, GVEA’s Board of Directors approved moving ahead with its own community solar program. Unlike the CEA project, which involves the construction of a new solar facility, GVEA is turning its existing 563 kW solar array in South Fairbanks into a community solar project. GVEA has not yet submitted its proposal to the RCA, but in a November 2024 presentation to the Board, GVEA staff estimated that over the course of a year, a participating member would save $5.76 per panel. GVEA’s staff recommended only allowing members to subscribe to a single panel (the installation has 1,760 panels), at least initially.
The timetable for GVEA’s program remains uncertain—the November presentation anticipated opening an application period in February and beginning the program in April. However, the plan requires RCA approval, a process that will take a minimum of 45 days—as of the time of publication, GVEA had neither submitted a tariff revision to the RCA nor announced when applications would open.
At GVEA’s December 2024 board meeting, it became apparent that its approach to community solar had become a source of tension between the Board and its Member Advisory Committee (MAC). While the MAC supported the conversion plan, it hoped it would only be a first step, and that the Board would give serious consideration to developing other projects, potentially even issuing a Request for Proposals (RFP) from developers. The existing facility provided opportunities for members unable to install their own arrays to participate in virtual net-metering, but it did not add new renewable capacity.
Members of the Board, however, were unwilling to commit to additional projects before gauging member interest and seeing how the conversion project worked. Instead, the Board advanced a two-part recommendation at the December meeting. One part instructed staff to move ahead with the conversion of the existing solar array. The other stated the Board was “making a commitment to evaluate future expansion of community solar generation options”. This was intended as a compromise that acknowledged the MAC’s position without committing the Board to pursue another project. Director Rick Solie argued against including this language, worrying that it could be misinterpreted by the MAC. He also believed the current board could not make obligations for a future board. Chair Tom DeLong, while sharing Solie’s concerns about misinterpretation, did not think it unreasonable to make a future commitment to consider other projects. After some discussion, the recommendation was approved without dissent.
Progress on SB 152.
The Legislature passed SB 152 in May 2024, and it was signed by the Governor on August 13. It requires Alaskan utilities that offer net-metering programs to facilitate the establishment of community energy projects. These are usually solar arrays, although SB 152 also allows for other renewable technologies. Currently there are only five utilities regulated by the RCA that have net-metering programs—the four Railbelt cooperatives (CEA, GVEA, Homer Electric Association, Matanuska Electric Association) and the Alaska Power Company, which serves communities in Southeast and Interior Alaska. For more on SB 152, see this AETP article.
SB 152 requires the RCA to create a regulatory framework for the creation and operation of community solar projects. This will include how participants are compensated for the power produced, rules for interconnection, and how community solar projects created by developers or non-profits will interact with utilities. The RCA launched its regulatory process on December 4, 2024. The development of new regulations is done through what is known as a “Rules Docket” (R-Docket—this is Docket R-24-004). SB 152 gave the RCA a year to complete this process, with the clock starting on November 11, 2024.
The initial RCA Order included a draft set of regulations, as well as seven questions on specific issues. It opened a standard 30-day comment period for utilities, other stakeholders, and members of the public. The timing of the comment period proved somewhat controversial. It was scheduled to end on January 3, which meant that its final two weeks would coincide with the winter holidays, when many organizations were closed or operating on a limited schedule. For this reason, several interested parties, including AKPIRG and CEA, asked the RCA to extend the comment period for an additional week.
The RCA agreed to extend the comment period at its January 8, 2025 meeting, 5 days after the initial period had lapsed. The Order extending the comment period indicated that the Commissioners believed this action had to be taken at a public meeting, with the January 8 meeting being the first opportunity (the RCA only held one public meeting in December due to the holidays). Comments were also accepted at the January 8 meeting. In addition to the oral comments at the meeting, the RCA received 25 written comments, 13 of which were submitted after January 3.
A number of events related to this docket were held in January. Working with AKPIRG, NREL held a webinar on January 10 and a workshop on January 24 (the latter event was hosted by CEA). These looked at the strengths and weaknesses of different organizational models for community solar projects. On January 28, the RCA held a Technical Conference, where utilities and other stakeholders were able to discuss the proposed regulations and the questions accompanying the initial Order. Based on these discussions, the RCA issued a new set of questions on January 30. 10 comments were submitted in response to these. No further action is currently scheduled, although the RCA is likely to present revised regulations and request further input on them before November.
