Solar Energy Toolkit: Stakeholder Engagement

For local governments seeking to expand solar energy, a necessary first step is stakeholder engagement. This means that local officials should seek consultation, support, and assistance from diverse members of their community as they develop new programs and practices. This section of Solar Energy: SolSmart’s Toolkit for Local Governments provides guidance to municipal and county staff on how to develop and implement an engagement strategy. It includes an overview of the relevant stakeholder groups; key topics that are likely to come up in the course of stakeholder engagement; and the tactics for making this engagement as effective as possible.

Who Has a Stake in Solar?

Stakeholder engagement is an ongoing process among relevant members of the community to share information, understand viewpoints, solicit feedback, and explore mutual interests and strategies. Strong community support is essential for any municipality or county to meet its solar energy development goals.

The first step in stakeholder engagement is to identify individuals and groups that should be included. For solar energy, this entails working with local government officials, electric utilities, local businesses, local workforce and economic development boards, nonprofits, financial institutions, and residents. The next step is to determine the key areas of interest for each stakeholder. The key stakeholders in a community will vary by region and jurisdiction. While local governments will know their own communities best, there are certain key stakeholder groups that virtually all communities will need to consider. Below is a brief overview of these groups and their perspectives.

LOCAL GOVERNMENT OFFICIALS

Local government officials shape and guide a community’s strategies for solar energy development. They are often the first contacts to be engaged as part of a stakeholder outreach strategy. As stewards of the public interest, they determine what level of solar deployment is optimal for the community, and what supporting policies are needed to achieve it.

Some key questions to pose as part of an outreach strategy include:

• What solar goals do we hope to achieve in the community?
• What barriers are preventing us from achieving these goals?
• What can we do internally to address these barriers?
• What issues should we address with external stakeholders?
• What is our plan for broader community engagement?

ELECTRIC UTILITIES

Electric utilities are crucial stakeholders within any community. Utilities have a vested interest in stewarding their investments and protecting consumers from cost increases, and they have the final say on the interconnection of renewable energy resources within their service territories. Municipal officials should approach their utilities with a collaborative attitude and keep them informed early on regarding any new developments.

Depending on the jurisdiction, utilities are organized in many different ways. A majority of communities are served by investor-owned utilities, while others are served by city-owned municipal utilities or rural co-ops. To ensure that stakeholder engagement is effective, it is important to understand the regulatory environment in which the local utility operates, along with its ownership structure and business model.

Solar energy can provide many advantages to utilities. It can help them meet renewable portfolio standard targets, reduce infrastructure demands, stabilize energy costs, and increase grid resiliency and reliability. On the other hand, solar energy does not fit neatly into a utility’s traditional cost recovery models. In most states, utilities have an incentive to sell as much electricity as they can. Therefore, utilities prefer not to compete with rooftop solar and other forms of distributed generation that could reduce their sales revenue.

COMMUNITY GROUPS

Community groups are local nonprofit organizations that typically fall into three broad categories based on their mission: social equity, economic development, or environmental protection. Other local organizations, such as homeowner associations, may also have an impact on solar development and should be part of the engagement process.

The interests of these community groups will sometimes coincide and sometimes be in conflict with one another. Each group will consider solar energy in the context of its own mission:

• Social equity groups are likely to focus on the potential savings that solar can offer for low- and middle-income communities, as well as the barriers these communities face.
• Local economic development groups are likely to focus on the jobs solar energy can provide, but also the potential costs.
• Environmental protection groups will likely care about climate change impacts, clean air and water, and protection of natural habitats.
• Homeowners associations will be interested in the impact of solar on their constituents, including topics such as interconnection and aesthetics.

A common strategy for engaging community groups is town hall meetings or facilitated gatherings (see below for more detail on organizing such meetings). In some cases, one-on-one meetings or small meetings with leadership teams may prove useful in garnering support and building consensus.

FINANCIAL INSTITUTIONS

Financial institutions typically provide loans (and sometimes equity) for those looking to install solar. These institutions are interested in making a return on their investments and avoiding borrower default. They may be wary of solar projects because not as much historical financial performance data is available, compared to more traditional loan types such as auto or home loans. However, the fast-growing solar industry presents an opportunity for banks and credit unions of all sizes to expand their consumer lending businesses, by developing loan products that allow their customers to access solar more easily.

The primary goal of engaging with financial institutions should be to help solar customers and developers improve their access to finance at terms that are favorable for their projects. Therefore, financial institutions need to be aware of the role (and potential size) of the solar lending market, and they need to become familiar with solar projects and their associated risks and returns.

HOUSEHOLDS AND BUSINESSES

With effective stakeholder engagement, individuals with a personal stake in solar energy can be among a community’s strongest allies. Households and businesses will be interested in the financial benefits of solar energy, including savings on electricity bills. Many will also want to do their part to reduce greenhouse gases and other air pollutants. Others will prioritize the ability to build microgrids using solar and storage, providing reliable electricity in case of a power outage. Local governments should make an effort to involve these community stakeholders from the early stages as they consider new solar programs and practices.

SOLAR INDUSTRY

Stakeholders from the solar industry include project developers, installation companies, component manufacturers, and other trade laborers such as electricians, HVAC installers, and roofers. These companies can either be locally based or interested in expanding their businesses within the community.

The solar industry is a key stakeholder to engage early in the process, as it can help local governments understand value of, and reduce barriers to solar energy development. Solar businesses have a strong interest in a smooth, transparent, and consistent process for permitting and installing solar. They also have an interest in consumer education and ensuring quality control in the market. Finally, the owners of large, utility-scale solar energy can include third-party investors, who will be interested in timely permitting and interconnection to the grid.

Stakeholder Engagement Activities

Stakeholder engagement allows municipal and county officials to gather varied perspectives from members of the community. These perspectives are used to identify promising ways to address community concerns and build support for solar energy development. The table below lists typical methods for sharing information with stakeholders; options for bringing stakeholder groups together; and ways the meetings with these groups can be structured.

Figure 1: Overview of Stakeholder Engagement Activities

BRINGING PEOPLE TOGETHER

An important step in stakeholder engagement is to convene diverse groups in order to learn more about solar, share feedback, and help identify community goals and next steps. Prior to holding meetings with larger groups, it is advisable to hold one-on-one meetings or phone calls with the most important stakeholders to learn about their interests. Webinars can target large groups or dispersed community members, but in-person meetings allow more opportunities for a robust discussion.

When deciding how to structure a stakeholder meeting, local officials should first consider their goals and expectations. Some key questions to consider include:

• What do you want to convey to stakeholders?
• What do you need to learn about your stakeholder groups and their interests?
• Who in the room will likely support and not support the community’s solar energy goals?
• What kind of feedback do you want to receive? Do you anticipate concerns and how do you hope to address these?
• What is the desired outcome of the meeting and what are the next steps?

There are several options for how to structure a meeting, depending on the audience and the desired outcome. These options include:

Facilitated discussion. Facilitation is often a very effective tool for engaging with stakeholders. Under this model, a designated facilitator structures and guides the meeting. Often, the facilitator will assume a neutral role and focus on moving the discussion forward by setting an agenda, asking procedural and clarifying questions, and recording feedback. A facilitator can either be a member of the local government staff or a third-party professional.

Workshops. A workshop is a type of facilitated discussion with smaller breakout groups focused on particular topics or questions. Each workshop group usually has a designated facilitator to help guide the discussion and record feedback. A workshop format encourages focused discussions with a high degree of participation with diverse stakeholder groups.

Focus Groups. Focus groups are an engagement strategy for obtaining feedback around specific topic areas and/or specific stakeholder groups. In a focus group, a facilitator or moderator comes with a list of predetermined questions, with the goal to assess opinions and perceptions rather than think through solutions or next steps. A focus group can be a helpful precursor to other types of engagement strategies.

Negotiation. Negotiation takes place between two or more parties seeking to reach a mutually agreed upon outcome. One type of negotiation is mediation, in which a neutral third party works with parties to guide discussion and resolve disputes. This approach is advisable if a discussion is especially contentious. A second type of negotiation is consensus building, in which multiple parties seek to find a solution that aligns with all of their interests. A consensus building process is organized and run by a neutral facilitator.

Common Themes in Stakeholder Engagement

While the stakeholders will have many different perspectives, their questions and concerns about solar energy are likely fall into a few key categories. Some of the common issues that are likely to come up in the stakeholder engagement process are discussed below.

ECONOMIC IMPACTS

Stakeholders will likely have questions about whether solar is worth the investment. In fact, solar energy generates economic activity by attracting new businesses to a community and creating jobs. The Solar Foundation’s National Solar Jobs Census found that as of 2019, the solar industry employed nearly 250,000 people nationwide, a 167 percent increase since 2010.[1] Solar energy development creates new jobs in installation, maintenance, project development, finance, and engineering, to name a few, as well as indirect jobs resulting from local economic stimulation.

Some communities may also benefit from increased property tax revenue as a result of new solar installations, though the extent of these benefits will vary by location.[2]

IMPACTS ON ENERGY COSTS

Solar energy adoption frequently leads to substantially lower energy costs for homes and businesses. However, many stakeholders will be unaware of these benefits, and they may still perceive solar as an expensive energy option. In addition, the cost advantages of solar will vary depending on state and local policies and economic conditions. Solar energy is more competitive in states with higher energy costs, and in states that have adopted policy incentives to encourage solar development.

Nevertheless, all stakeholders should be aware that solar energy is dramatically less expensive than even a few years ago. Local governments in all states can take many effective steps to make solar more competitive in their jurisdictions.

GRID IMPACTS

Stakeholders may also be concerned about solar energy’s impact on grid stability. Generally speaking, new solar installations can be very beneficial to the grid. They provide a new source of electricity that helps reduce the need for more capacity investment. With the right equipment, distributed solar can provide electricity to customers during grid outages caused by extreme weather events and other emergencies. However, solar installations do pose new challenges for the grid that should be carefully discussed with the local utility. In addition, siting new transmission lines, if necessary, can lead to complex regulatory hurdles at the state and local levels.

LOCAL CAPACITY

One potential obstacle to solar energy development is local government staff capacity. The department staff involved in the permitting and inspection process may be concerned that they will be overwhelmed by municipal initiatives to encourage solar deployment. In such cases, attentive local governmental officials should address departmental concerns with solutions that are guided by best practices. Such practices include online tools for permitting and inspection and requiring just one application for small residential installations.

ENVIRONMENTAL IMPACTS

One of the most attractive impacts of solar energy may be its environmental benefits. Solar energy helps individuals and businesses reduce their carbon footprints, while reducing local air pollution. Furthermore, many U.S. communities are developing clean energy goals and strategies to meet climate change commitments through increased renewable energy use. Solar energy is one of the primary and most effective ways to meet these targets.

ENDNOTES

[1] The Solar Foundation, National Solar Jobs Census 2019, available at www.TheSolarFoundation.org/national.

[2] Justin Barnes, Chad Laurent, Jayson Uppal, Chelsea Barnes, and Amy Heinemann, “Property Taxes and Solar PV Systems: Policies, Practices, and Issues,” July 2013. http://ncsolarcen-prod.s3.amazonaws.com/wp-content/uploads/2015/06/Property-Taxes-and-Solar-PV-Systems-Policies-Practices-and-Issues.pdf.