Developer and Financier Survey

Introduction

Entities providing financial capital needed to site potential land plots, conduct environmental impact analyses, and fund construction are essential to community solar farms. While the Community Priorities survey reached out to potential customers, this element of the research seeks to establish qualitative measures of developer and financier preferences and perceived barriers to better serving LMI population.

Methods

Due to the exploratory nature of this research, we intends to leave analyses associated with the developer and financier component of this research unstructured in part. As a result of the expected small sample size, described in more detail below, we do not expect to be able to test for significance between observations. Rather, this analysis will be conducted through a detailed analysis of primary data collected via survey responses. Absence of existing published data detailing limiting factors and decision points related to constructing community solar subscriber agreements makes it difficult to establish a baseline in order to conduct hypotheses-generated analyses as outlined in previous sections. This research takes a grounded theory approach to construct theory through primary data collection and subsequent comparative analysis.

The primary outcome of this research will be collecting and analyzing average terms used by solar developers and financiers in existing community solar contracts. The secondary outcome of the survey responses from developers and financiers will be measured by variables suggested to influence and limit offerings for existing community solar products.

The developer and financier research consists of an analysis of survey data in which each respondent was asked to provide estimated community solar contract attributes, including estimated savings rate, term length and cancellation fee. Respondents were asked if these rates differ when being offered to LMI respondents, and if the difference was positive or negative relative to the general population. Finally, information was collected regarding feedback on potential loan loss reserve characteristics, including ideal length of time and total project revenue to be covered.

Additionally, community solar access for LMI population is qualitatively coded using a Likert scale, by which respondents recorded the relative degree of importance. These factorized survey questions included three main sections. The first related to a variety of factors that may influence the respondents ability to make community solar projects accessible to LMI populations. Secondly, which internal factors were most important that lead to the inclusion of LMI populations. Finally, what factors effect the project’s ability to fill out enrollment in a timely and efficient manner.

Data Collection

to-do add more detail on how the developers/financiers were recruited, via qualtrics right? what was time period? how many were hit up and how many ultimately responded?

There were 254 unique responses.

Results

Descriptive Statistics

Table 1: Average Savings Rate by Rates Differing for LMI Customers Yes, N = 921 No, N = 1081 Unsure, N = 91
Savings Rate
0-5% savings per month 4 (4.3%) 2 (1.9%) 0 (0%)
6-10% savings per month 28 (30%) 34 (31%) 4 (44%)
11-15% savings per month 25 (27%) 41 (38%) 3 (33%)
16-20% savings per month 23 (25%) 26 (24%) 2 (22%)
21-50% savings per month 12 (13%) 5 (4.6%) 0 (0%)
If Differ, higher or lower
Higher savings 43 (47%) 0 (NA%) 0 (NA%)
Lower savings 49 (53%) 0 (NA%) 0 (NA%)
Unknown 0 108 9
1 n (%)

Average market wide savings rate are shown in Table 1.

to-do add takeaways for Table 1

Table 2: Average Term Rate by Term Differing for LMI Customers Yes, N = 951 No, N = 1111 Unsure, N = 21
Term Length
No minimum length 1 (1.1%) 9 (8.1%) 0 (0%)
1-3 years 10 (11%) 9 (8.1%) 0 (0%)
4-6 years 38 (40%) 35 (32%) 1 (50%)
7-10 years 23 (24%) 37 (33%) 0 (0%)
11-15 years 15 (16%) 16 (14%) 0 (0%)
16-20 years 4 (4.2%) 3 (2.7%) 0 (0%)
20 or more years 4 (4.2%) 2 (1.8%) 1 (50%)
If Differ, higher or lower
Longer terms 55 (58%) 0 (NA%) 0 (NA%)
Shorter terms 40 (42%) 0 (NA%) 0 (NA%)
Unknown 0 111 2
1 n (%)

Average market term lengths are shown in Table 2. For those respondents who marked that term rates differ for LMI customers, the majority (58%) noted the term lengths are longer relative to the general population.

to-do add takeaways for Table 2

Table 3: Average Cancellation Fee by Term Differing for LMI Customers Yes, N = 1041 No, N = 1001 Unsure, N = 51
Cancellation Fee
No cancellation fee 8 (7.7%) 7 (7.0%) 2 (40%)
$1-$100 19 (18%) 12 (12%) 2 (40%)
$101-$250 56 (54%) 54 (54%) 1 (20%)
$251-$500 18 (17%) 26 (26%) 0 (0%)
$501-$1,000 2 (1.9%) 1 (1.0%) 0 (0%)
More than $1,000 1 (1.0%) 0 (0%) 0 (0%)
If Differ, higher or lower
Higher cancellation fees 24 (23%) 0 (NA%) 0 (NA%)
Lower cancellation fees 79 (77%) 0 (NA%) 0 (NA%)
Unknown 1 100 5
1 n (%)

Average cancellation fees are shown in Table 3. Respondents were recorded that cancellation rates were lower for LMI populations relative to the market average. As shown in Table 3, 77% of developers and financiers who responded that cancellation fees differed for LMI customers offer lower cancellation fees.

to-do add takeaways for Table 3

Table 4: Average Churn and Default Rates N = 2091
Estimated default rate for Market
0-2% 6 (2.9%)
3-5% 84 (40%)
6-8% 98 (47%)
9-11% 16 (7.7%)
Unsure 5 (2.4%)
Estimated default rate for LMI
4 (1.9%)
0-2% 4 (1.9%)
3-5% 63 (30%)
6-8% 106 (51%)
9-11% 24 (11%)
Unsure 8 (3.8%)
Highest Churn Rate by Project Phase
2 (1.0%)
After 5 years 4 (1.9%)
Prior to COD 7 (3.3%)
Within 1-3 years 93 (44%)
Within 3-5 years 36 (17%)
Within first year of operation 67 (32%)
Highest Default Rate by Project Phase
5 (2.4%)
After 5 years 6 (2.9%)
Prior to COD 3 (1.4%)
Within 1-3 years 103 (49%)
Within 3-5 years 39 (19%)
Within first year of operation 53 (25%)
1 n (%)

When asked to estimate the default rates for community solar customers, the difference for general market and LMI population is stark. When asked to estimate default rates for the general market, nearly 90% of respondents estimated that default rates would be below 8%. For LMI customers, the proportional total fell to 83% of respondents.

to-do add takeaways for Table 4

Table 5: Loan Loss Reserve N = 1901
Importance of Loan Loss Reserve
Extremely likely 16 (8.4%)
Moderately likely 60 (32%)
Moderately unlikely 4 (2.1%)
Neither likely nor unlikely 26 (14%)
Slightly likely 57 (30%)
Slightly unlikely 27 (14%)
Ideal Percentage of Loan Loss Reserve 37 (22)
Ideal Coverage Time 9 (14)
1 n (%); Mean (SD)

34.4% of respondents marked savings rate from 0-10%; 33% recorded 11-15%, and 32.5% answered 16-50%. Hence, nearly two-thirds of respondents recorded over 10% for savings rate for community solar.

Pie Charts

Factors: Ability to make CS accessibility to LMI

CAC

Churn

Default

Communication

LMI ID

Financing

Takeaways

  1. Customer aqcuisition costs (CAC) was the strongest factor, with 55.5% responding as either very or extremely important.

  2. Defaults were relatively less important, nearly a quarter (23.6%) responding that it was either not at all or slightly important. When compared to threat of churn, respondents shifted from slightly to moderately important, implying that churn is more of a concern compared to default.

Bar Charts

Factors: Influence decision to include LMI in projects

Policy

Community Interest

Financier Interest

Company Interest

Equity

Takeaways

  1. For factors influencing the decision to include LMI households in CS projects, the most common answer was policy requirements and equity/inclusion efforts, with 63% and 58% or respondents marking these as very or extremely important, respectively.

  2. Community interest exhibited a large degree of moderate importance, with 44.7% of respondents, whereas only 43% respondents marked it as either very or extremely important, the smallest proportion exhibited in each of the five questions.

Bar Charts

Factors: Fill out CS Projects Quickly

Savings rate

Term length

Cancel fee

No On-bill credit

On-bill credit

Contract complex

Trust

Takeaways

  1. presence of on-bill credit for community solar projects exhibited the strongest positive response, with 58% of respondents recording it as probably or definitely impacted speed of CS projects being completed.
  2. Conversely, though marginally different, contract complexity and trust were the least powerful, with 17.6% and 19% of respondents, respectively, stating it either probably not or definitely did not have an effect on projects being quickly filled out.

Bar Charts

COD = commerical operational date (?)

Discussion