The potential of Low-Income Community Shared Solar (LICSS) is immense, offering an opportunity to promote environmental justice and ensure that solar benefits are shared among marginalized communities. However, the current LICSS model in dual bill states, such as Massachusetts, creates significant challenges, leading to increased risks and revenue losses for solar developers and owners. In this blog post, we discuss the real-world challenges of LICSS and how Gridwealth’s unique approach presents a powerful alternative, overcoming these obstacles and ensuring a brighter future for CSS projects.
Challenges of the Current LICSS Model
The current LICSS model in dual bill states is fraught with issues. Despite receiving substantial SMART adders, LICSS projects in Massachusetts are still costly, time-consuming, and difficult to fill. With customer acquisition rates as high as $150/MWh and an industry default rate as high as 50%, the model simply does not work for solar developers. Over the 20 year lifecycle of the LICSS project, the asset owner risks revenue loss and continuous reacquisition expenses that can significantly impact project ROI. The need for a better solution is evident, and that’s where Gridwealth comes in.
Gridwealth’s Innovative Approach to CSS
Gridwealth aims to transform the MA CSS landscape by offering a unique approach that can help late-tranche traditional CSS projects increase their net revenue and even exceed the net revenue of LICSS projects. In fact, over the full 20-year life cycle, Gridwealth’s model can create 14% more revenue for a traditional CSS project compared to a LICSS project. By blending low customer acquisition costs, revenue guarantees, low management fees, and exclusive bonus product commissions, Gridwealth’s model enhances traditional CSS projects and delivers bankable, predictable revenue.
How Gridwealth’s Model Works
Gridwealth’s innovative model is designed convert late tranche CSS projects into viable, predictable, and bankable projects. Here’s a breakdown of how the approach works:
Low Customer Acquisition Numbers: By focusing on a 100% Commercial and Industrial customer base, Gridwealth ensures a more targeted and cost-effective approach for customer acquisition.
Revenue Guarantees: Gridwealth offers revenue guarantees to protect solar developers and owners from the risks of attrition and default, providing them with the confidence they need to invest in CSS projects.
Low Management Fees: Gridwealth’s low management fees ensure that more revenue flows back to the solar developers and owners, making the CSS project financially viable and attractive.
Unique Bonus Product Commissions: Because we sell multiple products and services to our customers, Gridwealth enables solar developers and owners to tap into additional revenue streams by being paid as a channel partner. This additional revenue can easily mitigate the management fee and further boost the overall profitability of their CSS projects.
Conclusion
The challenges of low-income community shared solar in dual bill states are real and pressing. Gridwealth has developed a unique model to mitigate these significant risks. Gridwealth paves the way for CSS developers to achieve significant ROI enhancements for traditional CSS projects, resulting in a more bankable and less risky solar project. Gridwealth invites solar developers and Independent Power Producers considering LICSS projects in MA to reach out and explore this viable alternative.
Ease the Burden of Customer Acquisition
Customer acquisition is an expensive capital outlay that can sometimes be a burden before project revenue flows. Gridwealth solves this with flexible customer acquisition fee contracting. Tap into our flexible and custom acquisition model and relieve cash flow stress.
Managment Fees that Drop
Solar project generation degrades over time – don’t let your revenue go down with it. Gridwealth’s de-escalated management fees decrease over time to align with your project’s lifecycle.
Generate New Revenue with Shared Customers
Get paid for every product or service sold to shared customers.We pay you like a channel partner for every product and service we sell to shared customers.. This strategy reduces customer acquisition costs, saves customers more money, produces more loyal customers, reduces management overhead, and continually feeds more revenue to the IPP.
Capture Lost Revenue with Flexible Contracts
CSS discount rates fall over time as markets mature. Static discount rates leave money on the table. Gridwealth recovers this lost revenue and shares it with our IPP clients with unique contracts that allow us to reduce the discount rate over the project lifecycle.
Far Beyond Traditional Management
Gridwealth is a full-service asset monetization and management firm offering an integrated suite of services:
- CSS Customer Acquisition, Billing and Management
- REC Brokerage Services
- O&M Services
- Competitive Structured Finance
- Battery Modeling and Dispatch
- ISO NE Lead Market Participant Services
- PPA, VPPA and Carbon Free Energy Management