Community solar anchor tenant and sponsor – simply explained

First a quick review
What is Community Distributed Generation? Community DG involves one large solar array where local residences, businesses, and industrial users otherwise known as members can buy into a portion of energy from the large array without having to install any equipment on their land or property. The energy credits are sent remotely via the utility and the energy savings can be seen directly on the member’s utility bill.

Anchor Tenant
Community DG bridges the gap for higher risk clients to obtain offsite solar savings with little commitment. An anchor tenant in a CDG array is an entity who agrees to buy the influx of power when these higher risk members enter and exit the array. Typically the anchor tenant is a lower risk entity who is a large energy user who has an established history and will be around for the term of the 35 year agreement. At any point in time the anchor tenant may agree to buy 0%-100% of the power, each tenant may vary. This is the only member within the array that is sold before the array is constructed. The anchor tenant may also be the sponsor.

The sponsor could take a number of shapes. The most popular example, also seen below, is where a municipal, or strong local entity supports the construction of the CDG array in order to draw more attention to its construction to draw in members. Heightened visibility due to positive publicity through the media is another reason why sponsorship is important. Members like to feel familiar with something when they are being sold something that is foreign to them. Having a recognizable entity is another way the developer can help fill these arrays.