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