June 1, 2023

Community solar project rescoring leads to complaints

Solar developer OneEnergy Development spent two years developing leases with land owners and setting up partnerships in preparation for the state’s community solar program, according to the company’s CEO. 

OneEnergy submitted their proposals to InClime, the contractor hired by the New Mexico Public Regulation Commission. InClime was tasked with determining which of the proposed projects would be able to participate in the initial program. The Community Solar Act only allows for 200 megawatts of capacity in the initial stage and about 1,700 megawatts of projects were proposed.

When the scores were first announced, company CEO Tobin Booth said it appeared that eight of OneEnergy’s projects would be selected.

Then InClime delayed announcing selections and chose to rescore the proposals. After that, Booth said OneEnergy’s best project score was reduced by four points. None of OneEnergy’s projects were selected.

Related: InClime announces community solar projects

Booth said the changes in scores occurred when three scoring criteria were changed from a sliding scale to an all or nothing score. 

These changes left developers like OneEnergy with a bad taste in their mouth and a feeling that the rules of the game had been changed without any explanation.

OneEnergy is one of five developers who have filed complaints against InClime with the PRC over the scoring criteria changes.

The developers are requesting that InClime send out a new request for proposals and that the awarded projects be suspended. Booth said he would prefer that InClime reinstate the original scores and award projects based on those, but if that is not possible he would like to see a new request for proposals process.

In the complaint filed with the PRC, OneEnergy states that all of the developers agreed to abide by the criteria published in the request for proposals.

“Many made greater commitments in reliance on that criteria to maximize scoring and benefits to New Mexico customers and communities,” the complaint states.

Booth said OneEnergy set up partnerships for workforce development as well as donations of solar panels to schools and monetary donations to nonprofits. The company also set up an internship program in partnership to train engineering students that are interested in renewable energy, Booth said.

In the complaint, OneEnergy stated that none of the developers made a timely challenge to the sliding scale and that InClime repeatedly stated a sliding scale would be used. The company states that if developers had known it would be an all or nothing scoring system, their submissions would likely have been different.

“We spent a lot of money and time and expenses to comply with the unique requirements of this program,” Booth said.

He said developers across the nation are watching the implementation of New Mexico’s community solar program in hopes that it may serve as a model for other states.

Booth said New Mexico’s program differs from other states that have community solar in several ways including limiting the size of projects to five megawatts and requiring that 30 percent of the energy produced benefit low-income communities.

But the most significant difference is that the scoring criteria includes economic development.

Booth said that should be replicated in other states because it ensures the dollars do not leave New Mexico.

He said the changing of how projects were scored could impact developers’ interest in participating in New Mexico’s program in the future.

That is something his company also wrote in the complaint.

“Allowing this post-bid change to stand also introduces uncertainty in future participation in the community solar RFP program; it is difficult and costly for developers to commit time and resources to a bidding process that is ambiguous, and ultimately, developers may decide that they cannot afford to participate in New Mexico’s community solar program if they can’t rely on a fair and transparent process. Less participation by developers weakens the program and ultimately hurts the residents of New Mexico,” OneEnergy’s complaint states.

Challenges ahead and lessons learned

Dylan Connelly with Affordable Solar said getting a new program started will have its challenges. Affordable Solar is not among the developers protesting the rescoring process despite having its scores impacted.

“The PRC and InClime did a fantastic job getting this program off the ground from scratch in a short time frame. There will be lessons learned as would be expected for a new program,” he said in an email response to questions asked by NM Political Report.

He agreed that the request for proposals was clear that a sliding scale would be used. But, he said, InClime communicated the change in scoring criteria with developers through a portal the company had set up after challenges arose at the very end of the process.

Connelly said Affordable Solar’s scores dropped when the criteria changed.

At first, he said Affordable Solar received perfect five out of five scores for innovation, but then those scores dropped without any specific explanation.

“We are excited that we still won all 7 possible projects but would have hoped to be higher ranked to ensure earlier utility approval times for our projects,” he said. “But, we’re just excited to have a chance to serve our community when we’re approved to move forward by the utilities.”

The seven projects will be located in Valencia, Chaves, Sandoval, Bernalillo and Doña Ana counties.

Connelly said that each of Affordable Solar’s projects that were awarded a place in the program has reserved at least half of its energy capacity for low-income subscribers.

He said those subscribers will likely save at least 20 percent on electricity without having to pay upfront costs or face credit checks and long-term contracts like rooftop solar could require. Additionally, Connelly said the projects included “significant workforce training and local partnership commitments.”

He said Affordable Solar hopes to have the projects on line in 2024. 

This comes as many solar projects across the country, including utility-scale solar projects in New Mexico, have faced delays.

Connelly said the lead times to acquire switchgear, transformers and other equipment is still about one year.

“But we are still confident these can come online in late 2024 if we receive timely utility interconnection application approvals,” he said.

The interconnection applications are filed with the utilities and allow community solar arrays to connect into grid infrastructure owned by the utility such as distribution and transmission lines.

Connelly said the three investor-owned utilities have “their work cut out for them.”

“They will need to review dozens of large and complicated projects while doing their normal jobs,” he said.

Clock is ticking

The Community Solar Act passed in 2021, which kicked off a rulemaking process on the PRC side. When the rules were adopted in 2022, the investor-owned utilities promptly challenged them in the state Supreme Court. 

Related: Community solar appeal: An expensive delay tactic or customer protection?

Despite that challenge, the PRC moved forward with contracting with InClime and asking developers to submit project proposals.

Community solar is intended to provide renewable energy to people and businesses who are unable to install solar panels on their homes or shops. This includes renters, low-income households and people who live in apartments.

Each of the investor-owned utilities has a certain amount of community solar that will be coming onto its system. The utilities’ customers will be able to subscribe to receive electricity from those community solar arrays.

“The biggest challenge to rolling out the first phase of the Community Solar program is time as the clock is ticking,” Jim DesJardins, the executive director of the Renewable Energy Industries Association, said in an email response to questions from NM Political Report. “However, with good communication and cooperation among the stakeholders, I believe that we are still positioned to have a successful program.”

An interim report is due to the legislature in November 2024. 

Developers believe it will take about a year to build their projects before people can subscribe and receive the benefits.

That means there will be limited information from subscribers when the legislature hears the report.

DesJardins said he believes that there is still enough time to gauge the program’s success prior to the 2024 report.

Related: NM regulators deny request to delay implementation of community solar program pending court appeal

“But we need to keep our eyes on the prize: a program that increases clean energy access to all, especially low income households and provides economic development and jobs,” he said. “If we do that, a quality report can be prepared showcasing the benefits of the Community Solar program.”

Like Booth, he highlighted the unique nature of the state’s community solar program.

“We need to recognize that the path we are going down to implement the first Community Solar program in New Mexico is not well traveled,” DesJardins said. “I think the PRC and the Administrator Inclime are doing their best; having said that, the RFP process has been less than perfect. I think we would all benefit from a debrief process to look at lessons learned and how we can improve the process and implementation moving forward.”