Dive Brief:

• Exelon's subsidiary Constellation announced a partnership with one of the biggest residential solar installers, Sunrun, to offer a solar option to retail residential electricity customers in Massachusetts, Maryland, New Jersey, and New York.
• Under the partnership, Sunrun will install the solar array while overseeing insurance, monitoring and upkeep for 20 years. Customers will then purchase power from their system at a rate less than their current electricity rates while Constellation will continue to supply energy if more power beyond the system is needed. 
• In order to qualify, customers must own their own home, have about a $100 monthly electrical bill and a roof in good condition with solid sun exposure. 

Dive Insight:

Utility ownership of rooftop solar is emerging as one popular avenue to offer residents distributed solar. There was policy action on it in only five states last year, according to a recently released report from NC Clean Energy Technology Center. The question is how regulated utilities can participate in the highly competitive rooftop solar marketplace.

National solar installers, including Sunrun, have vocalized their opposition to regulated entities in the competitive rooftop solar marketplace. 

Constellation, an unregulated power developer and subsidiary of Exelon, mulled starting its own line of rooftop solar systems, the Baltimore Business Journal reports, but chose to partner with Sunrun instead to roll out the program faster. 

"We looked at options across the board — partnering, acquiring or organic growth," Stewart said. "It made a lot of sense for us to be able to step into this relationship very quickly."

While 59% of utility professionals surveyed by Utility Dive thought their utility should build a business model around owning and operating distributed energy resources (DERs) and rate-basing the investments, only 29% thought it should be done through a unregulated subsidiary and only 5% thought their utility should not have a business model around DERs.

But some utilities are moving in that direction. Two Arizona utilities are just starting to implement approved rooftop solar projects. 

And similar to Constellation, Georgia Power and New York’s Consolidated Edison are developing trial programs through unregulated affiliates. CPS Energy, the San Antonio municipal utility, is in the process of implementing utility-led rooftop solar and community solar programs.

“Utilities in four states implemented or announced plans to develop programs for utility ownership of customer-sited rooftop solar systems in 2015, and regulators in New Mexico are weighing the pros and cons of utility-ownership of distributed generation more broadly,” the report stated.