Recently, The New York Public Service Commission (PSC) announced a plan called Reforming the Energy Vision (REV) to help consumers make better and more informed energy choices, enable the development of new energy products and services, protect the environment and create new jobs and economic opportunity throughout New York State. REV will also overhaul the regulations that govern utility companies,and create and promote new energy markets. According to the PSC,  the initiative seeks to give customers more choice and control over their energy usage for every dollar spent on utility bills, and to promote a private-sector-driven clean energy market. REV is also designed to significantly reduce the amount of money spent on crumbling energy infrastructure.

Increasingly extreme weather events, coupled with excessive environmental issues and rising costs of fossil fuel dependence compelled regulators to adopt this policy. The policy favors small scale energy sources like rooftop solar, residential wind, battery storage, combined heat and power, energy efficiency, demand response, and other decentralized energy resources. A decentralized system based on these resources is generally more efficient and resilient (meaning it can better withstand or recover from extreme weather events and outages).

“To spur the creation of the electric grid of the 21st century, the commission’s initiative will lead to a top-to-bottom restructuring of the state’s energy-efficiency programs to ensure that New Yorkers have access to reliable, clean and competitively priced electric power,” said New York commissioner Audrey Zibelman, a strong proponent of the initiative.

“The end goal of the process will be to give consumers greater freedom to manage their total energy bill,” she said.

YSG Solar’s community solar development aligns with the goals of REV and New York State’s energy plan.

Goals of the REV initiative include reforming  New York State’s energy industry and regulatory practices, promoting energy-efficient  programs and increasing renewable energy resources such as wind and solar. It also aims to promote the use of more distributed energy resources such as microgrids or on-site power supplies and energy storage, encourage customer use of advanced energy management products such as demand response and empower customers by allowing them more choice in how they manage and consume electric energy.

The initiative also ties in with the draft State Energy Plan released the beginning of the year, which calls for more customer choice and private-sector-driven clean energy markets.

Community solar is becoming a compelling and rapidly growing industry, thanks to favorable state legislation and substantial interest from utilities. The new industry provides utilities with a role in solar and provides solar ownership options to many who do not otherwise have them.

Utilities are poised to be the biggest contributors to the growth of community solar over the next five years. With close to 50 percent of U.S. households and businesses unable to host rooftop solar systems, community solar is an untapped market for consumers looking for green energy. Solar power is even becoming cheaper than retail electricity in parts of the country.

Community solar allows residential, commercial, nonprofit and municipal consumers to obtain solar power through various forms, including group purchasing of solar equipment, crowd financing, community investment, and donation-based models.

There are various models for community solar projects, but most projects today are utility-sponsored. Utility customers participate by contributing either an up-front payment or an ongoing monthly payment towards the solar project. Customers receive a payment or a credit on their electric bills based on their contribution and how much electricity the community solar project produced.

Third-party market leaders in community solar, such as developers Clean Energy Collective (CEC) and SunShare, use different models to manage community solar projects nationwide. CEC, for example, partners with utilities who have agreed to buy all of the electricity from the solar array through a long-term power purchase agreement. CEC then oversees the projects, partnering with photovoltaic system providers such as First Solar. CEC owns the arrays and manages all operations and maintenance of the systems. It also licenses software for the billing and crediting to customers’ bills.

One additional factor that’s fueling the expansive growth in community solar is an increase in investment from utilities that are developing their own community solar projects. Utilities say community solar makes economic sense, as the price of solar continues to drop and consumer demand for solar increases.

Although each state handles community solar differently, state laws generally mandate that utilities offer customers the option of community solar, with unique definitions of what “community solar” implies. The legislation often puts a cap on the size of the projects—for example, they can’t be larger than one or two megawatts—as well as requirements about how many subscribers a community solar system has to have.

Utilities are searching for a way to keep their customers happy and on the grid, yet still provide them with what many customers are now asking for – green energy. Because there are more utilities involved in community solar developments than rooftop solar projects, there is minimal resistance at the consumer level.

How each solar market is defined, in terms of things like incentives and annual caps on development, are occasional sticking points between solar developers and utilities. Developers, analysts and utilities predict that the pace of community solar will continue to grow in the future as prices of solar decline and more utilities get involved. GTM Research estimates that in 2015 and 2016 the total amount of community solar projects installed will increase by seven-fold.

Community solar is poised for explosive growth in 2016. Forbes magazine has declared that “next year will be a breakout year” for community solar, and that the alternative energy technology is becoming increasingly more mainstream as new business models make it available to customers who were unable to consider solar in the past.

Community solar projects include neighborhood solar arrays owned or leased by residents without access to traditional solar energy sources.  Thus far these types of residents have been unable to take advantage of lowered electricity bills and federal tax credits. However, in certain locations across the U.S., including NY, communities have come together to fund and build community solar arrays, also knowns as shared solar, or solar ‘farms’. These installations provide renewable energy alternatives to local electric companies, who in turn provide the alternative energy to customers.

Designed for those without rooftop access, these shared solar projects will open up opportunities for some 50 percent of current U.S. households and businesses that are unable to host a photovoltaic system due to site unsuitability, ownership, or multi-unit status, according to a recent National Renewable Energy Laboratory analysis. The analysis found that by bringing shared solar to households and businesses that were previously unable to host on-site PV, shared solar could represent 32 to 49 percent of the distributed solar market in 2020, representing $8.2–$16.3 billion of cumulative investment.

GTM Research has identified community solar as the next largest solar growth market in the United States. Over the next two years, community solar in the U.S. is positioned to see its market size increase sevenfold, Power generated by U.S. community solar projects will grow from an estimated 181.1 megawatts in 2015, to a predicted 465 megawatts in 2016, according to GTM Research.

2016 is on track to be a milestone year for U.S. solar, with more than 10 GW added on annual basis for the first time ever and the number of homeowners with solar installed eclipsing the 1 million mark. 10 gigawatts is not a one-time peak, but more likely a floor, with U.S. solar installations reaching 20 gigawatts per year by 2020.

The federal government showed its enthusiastic support in July 2015 when the Department of Energy launched the National Community Solar Partnership, which promotes solar arrays with shared ownership. The government is interested in promoting shared solar because of the growth opportunity it represents for solar power.

Despite that, only 24 states had at least one shared solar project online at the end of 2014, according to the Solar Energy Industries Association, which also said that four states – California, Colorado, Massachusetts and Minnesota – were expected to account for more than half of all community solar installations over the next two years.