Currents Ep339: Adapting Community Solar for a New Grid

Podcast: Currents (Norton Rose Fulbright)
Host: Todd Alexander
Guest: Aaron Alimi, Founder & CEO, Renewable Properties
Date: March 12, 2026

Episode Overview

In this episode, Todd Alexander welcomes back Aaron Alimi to discuss the ongoing evolution of community solar, focusing on innovative financing methods and regulatory strategies—particularly in California. The conversation explores why the classic community solar subscription model hasn’t taken off in some states, emerging models for project deployment and finance, and the ever-growing influence of data centers and storage technologies in shaping the future of distributed solar energy.

Key Discussion Points & Insights

Shifting Community Solar Models (00:27–06:13)

• California’s Unique Journey:
  Aaron explains that while third-party subscription models have succeeded in states like New York, Illinois, and Minnesota, new markets—including California—aren’t opening up as easily under this construct.

  "If I had it my way, we'd have walk-up community solar tariffs with third party subscription models all across the country...Unfortunately, over the last couple years, we as an industry have failed to open up additional markets across the country with that construct." (B, 00:51)

• Alternative Approaches:

  • Utility-Led Procurements: Utilities issue RFPs, and developers bid for projects, with utilities then offering community solar discounts—mainly targeting disadvantaged communities.
  • Value-of-Solar & Value Stack Models: These use state-defined value calculations and RFPs to determine project compensation, reflecting more than just raw wholesale or retail rates.

• Barriers & Opportunities:
  Aaron highlights the intricacies of state-level policy and regulatory implementation, particularly the importance of achieving "load modifier" status for distributed generation (DG).

  "If we're successful... those utilities that have DG resources can use those DG resources as an offset to their RA [resource adequacy] requirement in the state of California... it's something that the utilities are required to procure and are typically coming up short." (B, 04:02–04:49)

Policy and Advocacy Focus (05:06–06:13)

• Industry Advocacy:
  Aaron’s trade association in California is working on policy corrections following unsuccessful implementation of state legislation (AB 2316). Their focus is on getting legislative intent honored and working closely with utilities.

  "We're going to be focused on what I just mentioned, the load modifier status, as well as lobbying and finding the right angle to...fix this." (B, 05:19)

Utility-Customer Relationships & Market Structures (06:13–08:13)

• Utility Involvement is Key:
  Utilities prefer to retain customer relationships, making models where they serve as intermediaries more likely to succeed, especially in regulated markets like the Southeast (e.g., Duke Energy’s “sleeved” green tariffs).

  "The utility wants to maintain that relationship with their customer. So if the utility can stay involved...they are going to be more inclined to make something happen." (B, 06:32)

Data Centers and Demand Trends (07:41–09:22)

• Community Solar & Data Centers:
  While community solar projects are typically small (1–20 MW), their speed to market is a big advantage. Data centers, increasingly driving grid demand, benefit from quick deployment—even if through multiple smaller projects.

  "What the DG developer is offering that the utility scale developer cannot, is speed to market. We could come online much quicker than a large 500 megawatt utility scale project." (B, 08:13)

Financing, Investment, and Developer Landscape (09:22–14:08)

• Market Outlook Post-Regulatory Clarity:
  Despite a rocky past year due to evolving tax rules and tariff uncertainty, clarity and certainty have returned, spurring increased investor activity in the sector.

  • Megatrend: Soaring demand from new tech (AI, cloud compute), onshoring, electric vehicles.
  • Investor Selectivity: Capital is flowing, but established, well-capitalized developers benefit disproportionately.

  "Our existing suite of investors...have said to us, hey look, we're leaning in with the developers and sponsors that we believe in and we're not open for business with other people." (B, 11:38)

• Project Monetization Strategies:
  Aaron describes a hybrid approach: half of developed projects are retained, half sold at Notice to Proceed (NTP), allowing the company to capitalize on strong valuations for quality assets.

Pricing and Economic Pressures (14:08–16:02)

• Rising PPA Prices:
  Community solar PPAs are up ~20% over the past 12–18 months, not due to developer margin expansion but to offset:

  • Labor shortages & increased EPC costs
  • Compliance with new wage rules
  • Supply chain tariffs

  "PPA price is about 20% higher...that's just a complete pass through in terms of tariffs, labor shortages, additional requirements..." (B, 14:52)

• Main Constraint: Labor, not Capital:
  While money and equipment aren't limiting, skilled labor—both in offices and on job sites—is increasingly a bottleneck.

  "The constraining variable is people. That's the constraining variable. It's not equipment, it's not capital, it's not know how." (B, 16:02)

Market-by-Market Perspective & Retroactive Policy Risk (16:54–18:51)

• Best and Worst Markets:
  • Best: New York (VDER/value stack, now DG storage), Illinois, Maryland
  • Worsening: Minnesota (policy changes), Maine & Rhode Island (retroactive policy threats)
• Retroactive Changes a Major Red Flag:

  "To be in a business environment where they can do something retroactively doesn't really flies in the face of kind of corporate America, if you will." (B, 17:55)

The Storage Surge (18:51–21:41)

• Bullish on Storage:
  With U.S. capacity (not energy) as the central challenge, energy storage—especially standalone—is essential, with favorable tax treatment secured for years to come.

  "I've never been as bullish about the future for renewables and storage as I am today. This Megatrend is a real thing. It's here to stay." (B, 21:48)

• Regulatory Adaptation & Supply Chain:
  Developers like Renewable Properties have "safe-harbored" projects to benefit from current policy through 2030 and see domestic supply chains rapidly adjusting to comply with new rules (e.g., FIA/FEAC).

Notable Quotes & Memorable Moments

• On the Community Solar Model’s Plateau:
  "Unfortunately, over the last couple years, we as an industry have failed to open up additional markets across the country with that construct." – Aaron Alimi (00:59)

• The Utility’s Enduring Role:
  "If the utility can stay involved in the transaction, I think the utility is going to be more inclined to make something happen." – Aaron Alimi (06:32)

• Megatrends Driving Demand:
  "It's insatiable demand for kilowatt hours and for capacity onto the grid." – Aaron Alimi (10:36)

• Labor’s Bottleneck Effect:
  "It's not equipment, it's not capital, it's not know how. It's the capable hands to get you from point A to point B." – Aaron Alimi (16:08)

• Bullish Closing Note:
  “Let's keep up the good work and thanks again. Appreciate it.” – Aaron Alimi (21:54)

Timestamps for Key Segments

• 00:27: Community solar models—successes and new hurdles
• 02:32: Alternative market-opening mechanisms
• 05:19: California policy advocacy and load modifier status
• 06:32: Utility engagement in customer-facing solar models
• 07:41: Data center demand reshaping distributed generation
• 09:22: Market changes, deal-making climate, developer strategies
• 14:08: Pricing pressures and rising project costs
• 16:02: Labor as the industry’s critical constraint
• 17:04: Most and least hospitable state markets
• 18:51: Storage outlook and integration with community solar
• 20:55: Storage deployment challenges and regulatory adaptation
• 21:48: Final bullish outlook for the next five years

Tone and Style

The episode maintains a knowledgeable yet practical tone, reflecting industry experience and candid assessments of recent challenges and market evolutions. Aaron’s explanations are clear, optimistic, and often incorporate hard-won insights into the realities of energy project development and finance.

For listeners interested in how U.S. community solar can adapt to a “new grid” reality—facing policy bottlenecks, spiking demand from new tech trends, and the urgent need for storage—this episode offers up-to-the-minute context and actionable intelligence straight from the field.