With more and more high-dollar investors realizing how lucrative solar farms are, it’s critical that potential investors understand the risks of working with local electric co-ops. Before you agree to do business with a co-op, keep in mind these pitfalls:
First, state utility commissions do not usually regulate local electric cooperatives. That means rules and requirements for solar farms can change without notice, oversight or consequences making for a risky proposition.
Second, co-ops buy power at very low rates from large utility companies, so they pay investors on solar farm projects much less than a partnership between a corporate utility company like Duke Energy.
Third, co-ops aren’t as “credit worthy,” as larger utilities, so investors often feel much less secure entering into a 15- to 20-year purchase power agreement than they would teaming with a public utility.
Finally, co-ops are rarely as tech-savvy in designing and maintaining their electrical grids, so they’re less likely to allow large solar farms to tie into their distribution or transmission lines. This is because co-ops usually hire fewer professional electrical engineers who can perform software modeling on their circuits to determine the effect of adding more capacity.
So before going into business with a co-op, think not twice but thrice. The risks clearly outweigh the benefits for owners or investors involved in massive million dollar large scale solar farm deals.
For more information, contact Innovative Solar Systems of Asheville, N.C. at 828-215-9064. Innovative Solar Systems employs degreed electrical and civil engineers as well as real estate brokers and are considered by the solar community as leaders in solar farm development.