Have some questions about energy freedom and third party ownership? You’re in luck. Read our handy dandy FAQs for answers to some of the most common questions we receive.
What is third-party ownership?
Third-party ownership is an alternative financing solution for solar. Not everyone has the capital to front the cost for a solar installation. But, third-party ownership allows you to enjoy the benefits of having a solar system without the upfront costs of purchasing one. Instead, a solar company owns the system, and handles the maintenance, while you enjoy the benefits of using the electricity generated.
Why do we need third party ownership?
Alabama’s current energy policy environment requires you to purchase all your energy from a state- sanctioned monopoly. This was reasonable when the system was put in place more than 100 years ago. Today, however, many providers are able to generate energy, often at a lower cost than the incumbent utility.
Because you are not allowed to purchase energy from a lower cost provider, the incumbent utility has little-to-no incentive to offer you better products and services.
Third party ownership removes the upfront cost of clean energy like solar, expanding access to more people. It also opens a portion of the market and requires incumbent utilities to compete for your business instead of the state forcing you to give them your business.
Is third party ownership the same as net metering?
No. Third party ownership is completely separate from compensation for excess energy. Legalizing third party ownership does not change how much a utility or any other party will pay for energy you may want to sell them.
Have other states done this?
Yes. And to great effect! As of January 2020, third-party ownership is permitted in at least 28 states, including Georgia, South Carolina, Virginia, and Ohio.
After enacting a limited third party ownership policy, solar jobs in Virginia have grown substantially. In 2015, fewer than 2,000 solar jobs existed in Virginia, with most related to installation. By 2018, a total of almost 3,900 solar jobs were found in Virginia.
Is third party ownership the same as deregulation?
No. Third party ownership keeps the existing utility regulatory system in place. It simply allows you to purchase energy from other providers, up to a limit. The limit, normally 80 megawatts per project, is high enough to allow for meaningful competition but low enough to avoid the creation of new regulated utilities.
How can I learn more about energy freedom and third party ownership
You can read our primer here!
How can we make this happen in Alabama?
Energy freedom can only happen by a vote of the Alabama legislature. Ask your legislator to sponsor a bill legalizing third party ownership!