A couple of months ago, we gave you the facts on a community solar offer from Arcadia Power that had been generating a lot of questions from consumers who received mailers. In this article, we’ll break down the terms and conditions of two other community solar offers advertised by Nexamp and Clearway.
Let’s start with the basics.
What is “community solar”?
Community solar is an exciting new program in Illinois that can help reduce your electric bill while supporting the development of new solar projects. Thanks to a 2016 law, the Future Energy Jobs Act, the program allows ComEd and Ameren customers to now “go solar” without actually installing panels on their property. Under the program, you can purchase a portion of the electricity produced by a solar installation—called a community solar garden—and in return, receive credits that reduce your electric bill.
Community solar is just getting off the ground in Illinois, but we expect many projects to come online later in 2020. One of the final steps community solar developers must complete before they “energize” the garden is to secure a certain number of subscribers. So community solar companies are signing people up in advance for when their solar gardens go live later this year. That’s why people are seeing more advertisements. If you do sign up now, you will not be charged anything until the community solar garden you are assigned to is actually connected to the grid and you begin to receive credits on your electric bill.
How will signing up for the Nexamp or Clearway community solar offer affect my electric bill?
If you sign up, you will still receive an electric bill from ComEd or Ameren, but that bill will now include credits from your community solar subscription. In addition to your reduced electric bill, you will also pay a second monthly bill to the community solar company. Both Nexamp and Clearway will bill you for the value of the credits applied to your utility bill, but at a rate that is 20% lower than the standard utility supply cost. Even though you are now receiving two bills, consumers who sign up with these community solar offer will save money overall.
What if I am with an alternative electric supplier?
If you are signed up with an alternative electric supplier, there’s a high likelihood that they are overcharging you. Being overcharged by an alternate supplier will reduce the impact of your community solar savings. CUB Recommends: Check to make sure you aren’t being overcharged. In most cases we recommend ending your subscription with an alternative supplier when you sign up for community solar. (Read our fact sheets on electric competition, for ComEd customers and Ameren customers.)
Are the Clearway and Nexamp deals any good?
Although CUB has not yet spoken with anyone who has signed up, we have had discussions with both Nexamp and Clearway and reviewed sample contracts that they provided to us. We will update this posting if we hear of any changes. Always read your contract thoroughly.
This checklist summarizes key points about the Clearway and Nexamp deals:
|Is there a credit check when I sign up?||No.||Yes, Clearway performs a “soft credit check,” which will not impact your credit score.|
|How will I be billed?||You will still receive your current electric bill, only now it will be reduced by solar credits. You will now also receive a monthly Nexamp or Clearway bill.|
|What are my billing options?||Nexamp automatically enrolls customers in automatic paperless billing, but you can switch to paper bills or non-automatic payments anytime.||Clearway accepts the following payment methods: check, money order, credit card, debit card, and automatic payments from a checking or savings account. If you enroll in automatic payments, you will receive a $40 credit after making 3 consecutive automatic payments.|
|Do the offers guarantee savings?||Nexamp and Clearway both guarantee a 20% savings off of the default utility rate for the bill credits you receive. Note: This will not necessarily reduce your full supply cost by 20%, as some months you may use more energy than your community solar subscription generates.|
|What’s the contract term?||15 years. However you may end the contract at any time. Nexamp requires 90 days’ notice before cancellation goes into effect.||20 years.|
|Is there an “exit fee” for leaving the contract early?||No. There is no exit fee, however you will still have to pay for bill credits generated during the 90-day period after you provide notice of cancellation.||Yes, Clearway charges a $200 early termination fee if you choose to cancel. However, Clearway waives this fee if you move out of your electric utility’s territory, in the event of a customer’s death, or if you can find someone to take over your community solar subscription. Clearway requires 60 days’ notice of cancellation. During that period Clearway will still bill you for the solar produced, and you will still receive bill credits if your account is still active.|
|What happens if I move?||If you move within your current utility territory you can take your community solar subscription with you. If you move outside of the utility territory, you can either assign your subscription to someone else, or cancel with no penalty.|
|When will my subscription go live? When will I start to see credits on my utility bill?||This depends on which community solar garden the company you choose assigns you to, and when it is completed. The Community Solar Standard Disclosure Form you receive from Nexamp or Clearway includes the month your subscription is expected to go live in the “Subscription Specifications” section.|
Can I sign up for community solar and ComEd’s Hourly Pricing or Ameren’s Power Smart Pricing program?
Yes, you can still participate in these programs. Hourly and Power Smart Pricing allow consumers to pay a rate for electricity that can change by the hour. It’s been a money-saver for most participants, saving them 15 percent, on average, on the supply portion of their bills. Important Note: Nexamp and Clearway cannot promise 20% savings if you are enrolled in Hourly or Power Smart Pricing.
What does CUB think about these two offers?
Community solar allows more Illinois consumers to enjoy the benefits of renewable energy, so CUB is pleased to see these offers beginning to hit the market. From reviewing the terms of Nexamp’s and Clearway’s offers, we did not see any red flags. Still, we always recommend comparing multiple offers and understanding all the terms before signing up for community solar. We’ve summarized our analysis in the chart below.
How can I compare community solar offers?
Under state law, community solar providers are required to provide a Community Solar Standard Disclosure Form before they sign you up. These forms supplement the contracts, and make it much easier to do an apples-to-apples comparison between community solar offers. Things to look for in the Standard Disclosure Form:
- Is there an escalation rate? That is, will the price go up over time? (The Nexamp and Clearway contracts we have seen do not have escalation rates.)
- Has the community solar garden been finished? If not, when is it expected to be finished? When are you expected to start receiving bill credits? (This will vary by garden, even within the same company.)
- Does the community solar subscription require that you enroll with an alternative electric supplier? If so, what are the terms? (Nexamp and Clearway do NOT require you to be with an alternate supplier.)
We expect other community solar offers to hit the market soon, and we look forward to analyzing those offers for their benefits.
Have you signed up for a community solar program? Let us know about your experience!