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Community solar projects being considered for NM

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Each new community solar project added to the state could generate millions each year in terms of payrolls and increased business activity, according to a university research group.

The University of New Mexico Bureau of Business and Economic Research released a report Monday about the fiscal impact of community solar projects, a study commissioned by the Coalition for Community Solar Access, a trade group of businesses and nonprofits based in Washington D.C.

The coalition is one of the members of a working group established in 2020 by the New Mexico Legislature to consider community solar initiatives in the state.

It is also one of the groups pushing for New Mexico legislation this year to allow community solar facilities. House Bill 106 and Senate Bill 84 are being considered by legislative committees. Other bills that address energy diversification also have been introduced this session.

“Community solar has been shown in many markets to have a significant, positive impact for communities,” said Matt Hargarten, public affairs director for the Coalition for Community Solar Access. “I think what this report showed is that community solar can be helpful in rejuvenating New Mexico’s economy and getting regular New Mexicans back to work.”

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Community solar projects would provide alternatives to individually owned solar installations, which can be impossible for lower-income property owners or for renters, according to the report.

A 2020 New Mexico Senate Memorial establishing the working group indicates that community solar projects have been authorized in 19 U.S. states and the District of Columbia.

Small community solar installations could be placed on fallow farm or grazing land or underutilized properties, thereby providing landowners with lease payments. Residents and businesses within that county or nearby counties then could buy into the service to receive credits on their utility bills.

Hargarten said he thinks that community solar has strong support this year, with the two bills before the Legislature originating out of working sessions this summer. Besides financial benefits, community solar projects can provide upgrades to power grid infrastructures and help efforts to use clean energy sources for electricity.

Coal still remains by far the largest source of electrical power in New Mexico, but the state 2019 Energy Transition Act requires that renewable energy represents 50% of electricity generation by 2030 and that investor-owned utilities be carbon free by 2045.

The Bureau of Business and Economic Research report considered the fiscal impact of new solar projects in 18 counties now served by three of the state’s largest electrical providers, Public Service Company of New Mexico, Southwestern Public Service Co. and El Paso Electric Co.

The report concluded that the construction and operation of a single, 2 megawatt facility in the state would create 12.1 indirect and direct jobs, generate $462,529 in annual payrolls and produce $1.64 million in industrial output in the state.

A single 5 megawatt facility would produce 37.6 jobs, annual labor income of $1.47 million and annual industrial output of $5.17 million.

The larger the project, the larger the economic impacts are projected to be. A 100 megawatt array made up of 5 megawatt installations would support 752 jobs, an annual labor income of $29.4 million and industrial output of $103.4 million. It also would create about $2.9 million in tax revenues.

If a 5 megawatt facility were added in Chaves County every year for five years, by the end of year 20, the impact could be 128 jobs, $4.2 million in labor income and $16.3 million in industrial output, with the dollar figures given in 2020 values.

One of the critical comments made during a Thursday committee hearing about Senate Bill 84 is its lack of focus on residential customers. Without that, a representative with Xcel Energy said, such projects are likely to benefit industrial and business customers more than residential consumers, which has been the case in other states. Others have suggested that the legislation should give priority to locally owned or state-owned solar operators. Another concern was that community solar projects in some areas of the state might result in higher costs for low-income subscribers compared to the rates they pay now.

Senior Writer Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at reporter02@rdrnews.com.