It’s 2020 and one of the biggest influencers in the solar and clean energy business runs a software company.
If you ask Kiran Bhatraju what his company Arcadia does, he will tell you that his team has built a software technology platform. This platform just happens to sell energy products.
Arcadia, previously Arcadia Power, connects subscribers in all 50 states via its software to its 11 wind farms and community solar projects. Arcadia has 20 live community solar projects and around 40 projects in development, making them the largest residential community solar manager in the country.
—said Bhatraju, who is the CEO of Arcadia.
Arcadia closed its Series C funding with $30 million and plans to use that to double its community solar efforts. Arcadia’s community solar projects are currently in just four states: Illinois, Massachusetts, New Jersey, and Colorado. By the end of 2020, Bhatraju hopes customers in nine states will have access to community solar.
Arcadia is enabling the masses to connect to clean, renewable energy at lower costs.
Community solar versus roof top solar
Rooftop solar revolutionized the average homeowner’s ability to subscribe and utilize clean energy. While rooftop solar did enable millions to go solar, so many where still left in the dark because they either live in an apartment, don’t own their roof, or simply the roof was in the wrong direction.
Enter community solar. Large solar arrays were built either in fields or on buildings, not for commercial use, to help add clean energy to the grid.
But in its infancy community solar was “a rich person’s product,” according to Bhatraju. Community solar cost more than electricity from the traditional utility, there were long 20-year contracts and high credit score requirements. Once they were signed up, the customer would receive two bills, one from the solar farm and the other from the electrical utility. The other option was to purchase panels within the grid, which was also costly.
Now community solar is booming in states such as Massachusetts and New York in large part thanks to subscriber models that Arcadia and some competitors such as Clean Energy Choice and Blue Wave have rolled out.
Customers can connect to community solar at a discount and don’t need a roof. The utility gives the customer a credit on their bill for the power they used, therefore lowering the cost of their total electricity usage.
However, the big drawback of community solar is it’s not actually active in every state. Currently, there are 40 states with at least one community solar project online, according to the SEIA. But only about 19 states have policies and programs encouraging community solar’s growth.
The Solar Energy Industry Association, SEIA, sites that 1,523 megawatts of community solar have been installed in the U.S. through 2018. SEIA predicts that in the next five years the U.S. community solar market will add as much as 3.5 gigawatts.
Arcadia’s team is pushing this growth by getting involved with political committees and even asking customers to speak to legislators about how much they love their community solar. Arcadia also recently hired Max Minzner as its General Counsel, a former General Counsel of the Federal Energy Regulatory Commission, to help the company navigate its policy and efforts.
“We are convincing the market that there is a huge demand for these projects,” Bhatraju said. “If done right, customers want clean energy and they want it to be easier. More legislators are starting to recognize that.”
How Arcadia’s business model works
Users who arrive on Arcadia’s website can sign up for clean energy in their area in less than two minutes. When someone becomes a new Arcadia customer they will essentially give up contact with their traditional electrical utility. Customers only pay Arcadia for their clean power, and then Arcadia works out the rest with the traditional utility behind the scenes.
To make clean energy more accessible to the masses, Arcadia has structured its offering to have no long-term contract. There’s also no credit check, which is common with most roof-top solar PPAs.
Arcadia waves the credit card fees that utility typically have and puts their customers on autopay. Every bill a customer receives from Arcadia lays out how much the customer saved each month by opting into clean energy and the local disruption charges they have to pay. The cost per KWH varies by state, but customers who are subscribed to the community solar projects do save money.
“We show you the production of your project in a cool, digital way,” Bhatraju said. “Customers get this from other parts of their lives, but not from energy providers.” Behind the scenes, Arcadia’s team does the net metering and adjust each customer’s allocation within the solar farm based on each customer’s individual usage and the production they get from the array. They don’t own or build any of the solar arrays, but they manage the customers and allocations for the customer. Bhatraju’s Uber comparison works here, as Uber has both the drivers and customers as a part of its business model, Arcadia has both the developers and the average utility customer.
“Arcadia unlocks residential demand for clean energy by providing simple and compelling products to the customer,” Greg Callman, Global Head of Energy Technology at Macquarie Capital, Arcadia’s newest investor, said in a press release to announce the closure of Arcadia’s Series C funding. “Behind the scenes, renewable project developers, trading desks, technology players, utilities and capital providers can connect and manage the complexity.”
Arcadia in the future
While Arcadia does have customers in all 50 States, Bhatraju has high goals and hopes for the future and growth of his company.
He also seems Arcadia continuing to expand its product offering to products such as PV charging, batteries, and smart thermostats.
“One of the things I’m most proud of is we have customers in all 50 states. It’s not just the coasts, we have customers in Kansas and Arkansas,” Bhatraju said. “People have been watching community solar and they want to see it’s growth. It’s exciting.”