State regulators are increasing the amount of community solar that can come online in New Mexico.
During its Thursday meeting, the New Mexico Public Regulation Commission unanimously approved increasing the existing cap on community solar from 200 megawatts to 500 megawatts.
The Community Solar Act that passed in 2021 set an initial cap of 200 megawatts divided between the three investor-owned utilities. This was done in an effort to sort out potential problems before expanding to a larger community solar program.
Community solar essentially involves a third-party developer building an array that is then connected to the utility grid. Utility customers can then subscribe to receive all or some of their electricity from this array. It is intended to help people like renters and low-income households access clean energy resources.
While the initial cap was set at 200 megawatts, the legislature gave the PRC the authority to expand the program.
The commission considered two options on Thursday: Whether to keep the 200 megawatt cap in place pending a thorough review of the program or expanding the cap by 300 megawatts.
After the Community Solar Act went into effect, developers submitted proposals to a third-party administrator that the PRC selected. Those proposals totalled 1,700 megawatts of potential new solar capacity. The third-party administrator ranked those projects and announced the awards in 2023.
Expanding the program to 500 megawatts would allow for a new round of projects to be selected.
This 500 megawatt cap will go into effect Nov. 1.
However, the utilities opposed increasing the cap.
Commissioners did voice some concerns about expanding the cap in part because none of the current projects have been completed. This makes it hard to gauge the actual demand for community solar.
But, while acknowledging this, Commissioner Gabriel Aguilera said he thinks it would hurt the community solar program more not to expand the cap in part because of how long it takes these projects to be built.
“If we don’t raise the cap now, we’re creating a gap, a pretty large gap, where the next round of projects would not be built until at least 2028 and I’m concerned that waiting that long would remove some of this momentum,” he said.
Commission Chairman Pat O’Connell said that he believes community solar will “grow organically to the size it should be.”
Aguilera pointed to the Solar for All grant funding that New Mexico received. This was something that the state Energy, Minerals and Natural Resource Department highlighted in comments to the PRC. This grant is bringing $156 million to the state to increase the access to solar.
“They’re concerned that if we don’t expand the cap now, that they will not be able to use that money for these projects and I don’t want to eliminate that possibility,” Aguilera said.
O’Connell pointed out that the Solar for All grant funding is not limited to community solar and said that he does not believe that the funding would go away if the cap wasn’t raised.
Commissioner James Ellison said that raising the cap could signal that the PRC is “interested in an aggressive timeline for community solar, and I think we’re all interested in seeing community solar go forward.” But, at the same time, he expressed concerns that doing so could raise false expectations about when the PRC might approve additional community solar projects. Just because the cap is raising to 300 megawatts does not mean that the PRC will immediately move ahead with approving new projects.
“What really needs to happen here is we need to see at least some of these projects actually be realized,” he said.
Ellison said that the PRC could use the lessons learned once a few of the projects are completed to guide future decisions.
This story has been edited to reflect that the PRC raised the cap by 300 megawatts to a total of 500 megawatts. A previous version stated that the cap had been raised to 300 megawatts.