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A Solar Condo: What is it?

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....A SOLAR CONDOMINIUM - ALSO KNOWN AS A SHARED SOLAR ENERGY COMPLEX - DISTRIBUTES ELECTRICITY TO CONSUMERS.

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....How does it work??....

 

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The main objective of the solar energy condominium is to enable individuals interested in the proposal to share the benefits of solar energy, even if they don’t have access to a roof or don’t wish to install solar panels on their property. Participants benefit from electricity generated by the condominium, which costs less than the tariff which would normally be paid by energy distributors.
The solar condominium allows for the sharing of solar energy, as there are several owners of each plant. The legal configuration of a condominium can be arranged through a “cooperative” or “consortium”. These are legal categories related to the formation of legal entities, not categories of energy generation. The Brazilian Electric Energy Agency (ANEEL) has approved the resolution “Normative Resolution 687/15” which clearly defines remote self-consumption and shared generation, and supports our solar condominium model.

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....HISTORY OF THE COMPANY....

Csaba Sulyok, Founder of COSOL

Csaba Sulyok, Founder of COSOL

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The company was founded in November 2015, the day after the publication of ANEEL's new Normative Resolution on Distributed Power Generation, allowing shared generation and remote self-consumption. These are the two main concepts behind the idea of COSOL. COSOL was idealized by the Hungarian economist, Csaba Sulyok, who is the leader of a research group on economics of renewable energies at the Federal University of Bahia (UFBA), Salvador. The aim is to eliminate the three main barriers to the spread of solar energy in Brazil:

1. High initial investment - Instead of selling expensive photovoltaic systems, we rent pre-installed panels for a lower monthly payment than the equivalent amount of discounted energy. By doing this, we offer an incentive without the need for investment.
2. Low economic efficiency - Our solar lots are 30% cheaper due to economies of scale, they receive 20% more solar radiation in the interior and generate 25% more energy through solar tracking. 
3. Lack of access to the roof - 80% of Brazilians live in cities dominated by skyscrapers and high rise buildings, usually without access to their  roof. Future shading of roofs in these cities is also a problem, as there are no height limitations in neighboring buildings.

The founder, a PhD student in energy and the environment at UFBA, has been living in Brazil since 2010 and has teamed up with several highly qualified professionals to create a multidisciplinary team including lawyers, engineers, administrators, marketing professionals, software developers and web professionals. Prior to founding COSOL, he published his Master's dissertation in Industrial Engineering on the economic analysis of heliothermal energy, and has also published several scientific papers at international events. He has visited research centers in Europe and China, and has also negotiated with the main developers of photovoltaic technology at the SNEC PV Power Fair In Shanghai and InterSolar in Frankfurt and São Paulo.

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....WHAT THE SOLAR CONDOMINIUM IS NOT ....

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The following are some of the approaches which are occasionally confused with the solar condominium:

Collective Purchases: This allows large groups of households or businesses to purchase their own individual solar systems at bulk rates through negotiations with a solar installation company. As such, group purchases do not result in a common project, each participant benefits separately. In contrast, in a solar condominium project, all participants benefit from the same system which is usually located on a piece of land that does not necessarily have to be owned by any of the participants and works remotely.

Green energy tariff: Green energy tariffs allow customers of a distributor to purchase electricity from sustainable power plants, primarily using renewable solar energy and wind power generation. Those who sign up for green fees generally do not do it for the purpose of saving money on their energy bills, but they pay an extra price for green electricity generated by solar or wind farms. Participation in a green energy plan does not necessarily result in the construction of additional renewable energy plants because electricity comes from existing facilities. Most solar condos, on the other hand, are developed with a primary goal of saving participants money by reducing their energy bills by building new power plants.

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Summary of how a remote generation works through the solar condominium. - Image Credits: Practical.

....WHAT ARE THE BENEFITS? .. .. ....

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As a relatively new concept, new groups, companies and consumers are entering this energy-generating industry. For this reason, it is important that anyone considering using solar energy compares all available offers, including rooftop installation options, in order to find the one that offers the best value to them.


In a nutshell, a solar condominium offers the opportunity for virtually anyone to generate their own solar energy without the need to install solar panels on their roof or property. This is particularly significant in tall cities where people do not have access to the roof, and even in individual homes where it is shaded and theft is a risk.

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....FINANCIAL BENEFITS OF SOLAR CONDOMINIUM .. .. ....

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Mainly due to the compensation system, in an increasing number of states the option of shared generation of solar energy is gaining strength as the primary means for people to enjoy the benefits of solar energy despite not being able to generate it themselves.


Like a rooftop solar power system, the compensation system allows a family or business to receive credits associated with a renewable energy project along with other consumers, who do not share a single meter of electricity. These credits are worth the same amount they would pay for the electricity from the distributor. For example, each unit (kilowatt-hour or kWh) of electricity generated by the solar condominium will be effectively deducted from the participant's energy bill on a one-to-one basis; if the participant's part of the plant produces 5kWh of electricity on a given day, they will receive 5kWh of metering credits in their energy bill which they can use within 5 years.


While compensation is helping to promote solar projects around the country, other models are already emerging which allow consumers and developers to get involved. A report on the future of solar energy prepared by the Massachusetts Department of Energy (FAZEDOR) suggests that other programs can outperform the compensation system, such as statewide measurement quotas which are filled. Although the report is aimed towards the context of Massachusetts, its remarks also apply to other states and countries.


Tax credits directly encourage companies to develop power plants in cases where the condominium has insufficient fiscal appetite (ie, doesn’t pay enough in taxes to qualify for a tax credit). They also reduce the cost of installing a system, so electricity from the photovoltaic system becomes more accessible thanks to the ability to benefit from incentives, including federal and state government, such as exemption from ICMS, PIS and COFINS.


Although shared solar projects aim to help participants save money, there may also be cases where environmental or social outcomes are the primary goal.

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....MODELS OF PARTICIPATION ....

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Shared solar projects and programs are usually offered in two formats:

  • Ownership: This model allows participants to be directly involved in the project. Participants can take advantage of all energy produced by their part of the solar panels or system. COSOL is not currently selling solar lots due to CVM restrictions. 
  • Rental: This model allows participants to become subscribers and pay a lower price for electricity from the solar condominium. They do not own the panels, they only buy the benefit of being able to have a reduced rate of generating their own energy in the solar batch.

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....PROPERTY-BASED PROJECTS  ....

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When projects are property-based, participants can buy their panels or finance them through a loan from the project developer or their bank. In this way, ownership-based models are very similar to purchasing a solar energy production system, except, of course, that no system will be installed on the roof property. Instead, the participant will either have a certain number of panels in the matrix, or, will have a certain installed capacity expressed in kilowatt-peaks (eg 5 kWp) of total solar plant capacity (up to 5 MWp in Brazil) .


In these programs, participants can only buy lots generating enough energy to meet their annual electricity consumption. The proportion corresponding to the actual generation of the project will be credited to the customer through their electricity bill, unless leased to tenants.

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....PROJECTS BASED ON RENT .. .. ....

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In the solar condominium model based on rent, the participation is more fluid: third parties or a distributor will develop and own the project, being able to invest in it with the objective of taking advantage of associated tax credits and to extend an opportunity for the public to participate. The project will usually be administered by the condo board, which will manage the participants' enrollments and billing. Therefore the owners of the lots, if they wish,can lease them to other consumers.


The details of the program may vary but most require upfront fees to join while offering instant savings. In this case investing in a solar condo project is similar to signing up to use green power, except that instead of paying a premium for clean energy participants will pay a lower price for their electricity.


As with property-based projects, there are limits to participation. Tenants and self-generating landlords must reside in the condo's distributor area, and their share of energy through the project will not exceed 90% of their electricity use.


Subscription-based programs allow participants to enter or exit easily. If a subscriber decides to choose to leave or move to a different distribution area, his place will be opened to the next aspiring participant in the queue.

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