Community solar lets homeowners, renters, and businesses access the benefits of clean energy without installing solar panels on their roofs. It benefits those who can’t, or choose not to, go solar at home.
It also helps communities become less reliant on dirty fossil fuel plants and make the grid more resilient. And it creates local jobs.
Community Solar: What is It?
What is community solar? Community solar (also called community solar gardens, projects, or farms) is a way to benefit from clean energy without the expense and hassle of installing panels on your rooftop. Suppose you cannot install your system due to lack of roof space, tree blockage, homeowner association rules, or rent. Community solar is an excellent option to help you achieve your clean energy goals and reduce electricity costs.
Community solar allows homeowners, individuals, and organizations to subscribe to a solar farm and receive credit on their electric bill for its power. By doing so, they offset their electricity costs and contribute to local solar jobs, economic development, and environmental sustainability.
Most state and utility-run community solar programs allow customers to participate in a project alongside onsite rooftop systems installed in their homes. Depending on the program, you can choose a subscription plan that covers your annual electricity usage and any excess energy produced by your onsite system (sent back to the grid). Your monthly electric bill credit will be determined by the amount of energy produced by the solar farm.
The other type of community solar is ownership-based, which allows you to purchase a share or stake in a project, just like buying a home. This option requires a longer-term commitment but also will enable you to enjoy more significant savings potential over time and take advantage of tax credits.
Both types of community solar are supported by state and federal incentives, including the Investment Tax Credit (ITC), which offers a 30% federal tax credit for renewable energy projects. Additionally, there is a wide range of state solar incentives available.
Most community solar projects are built on a large aggregated scale, often located on capped landfills, open fields, and warehouse roofs. They can also be combined with agriculture in agrivoltaic farms, which makes them a more sustainable form of energy production. In addition to their environmental benefits, these sites can boost local economies and contribute to the resurgence of rural communities across America.
How Does Community Solar Work?
Community solar is an excellent way for residents without rooftops to participate in the clean energy revolution. The model uses centralized solar arrays that local homeowners and renters can subscribe to at no additional cost. It’s a community garden, but instead of growing your vegetables, you produce electricity through a project that generates and sells power to multiple users.
The community solar project can be located offsite on a capped landfill, open field, or even farmland (when combined with agriculture in an agrivoltaic project). It can also be on the roofs of commercial buildings or in affordable housing apartments or condos. Non-regulated utilities, nonprofits, and other community organizations develop many projects. Others are managed by a utility that generates community solar as part of its renewable energy strategy.
Depending on the structure, community solar projects can be subscription-based or ownership-based. Customers can buy electricity from a shared project and receive credits on their electric bill based on their share’s electricity output. In some cases, such as ownership-based projects, customers may be able to access incentives.
Because community solar isn’t tied to a rooftop, it can travel with you when you move within the same utility service territory. However, it’s essential to consider the length of your contract or subscription before you sign up. Many community solar providers require a few months’ notice before you can cancel your subscription.
It’s also essential to understand how your community solar provider bills you. Some offer consolidated billing, where you receive one bill from your provider with the community solar credits reflected. Others will have two bills, one from your community solar provider and the other from your utility company. Both options are equally effective, but the consolidated billing is more convenient.
What Are the Benefits of Community Solar?
Whether you are a homeowner or renter, a community solar project is an opportunity to access clean energy and save money. It also encourages everyone in the community to support renewable energy practices, leading to a greener future. Community solar works by generating energy through large plots of land filled with solar panels, known as solar farms. Typically, participants receive monthly credits on their electricity bills from the power they contribute to the solar farm.
Using these credits to offset the cost of electricity a subscriber pays, they can reduce their utility bill or even make it zero. Depending on the solar project, this could result in 5-20% monthly savings. Often, these savings are more significant than what people might be able to achieve with rooftop solar alone.
A significant benefit of community solar is that it enables people who cannot install their solar arrays on their property (due to high upfront costs or roof constraints, for example) to participate in the clean energy revolution. It opens up solar energy to more homeowners, renters, and families.
It’s crucial to ensure that renewable energy sources are accessible to all households, regardless of their income level. That is because people with low- and moderate income tend to pay a higher portion of their income on energy bills, which makes it harder for them to benefit from renewable energy sources. Community solar projects can allow these customers to save on their electricity bills while helping the grid lower its dependence on fossil fuels and bolstering local economies.
As community solar has become more popular, it has evolved to offer options for all types of consumers. Some projects are organized as group purchases, which allow residents and businesses to leverage their purchasing power with an energy company that hosts the solar farm. Other projects are structured as a co-op, with a collective-owned and operated community owning and maintaining the solar panels. Sometimes, a community partners with a third party to buy and deliver energy to its members (often called Community Choice Aggregation, or CCA).
Another way that communities are expanding solar participation is by engaging community-based organizations to help reach and educate prospective subscribers.
How Can I Get Started with Community Solar?
With community solar, you can harness solar power without owning your home or roof (and with no upfront costs). By choosing solar power, you can save money and contribute positively to the environment and the economy in your local area. Opting for solar energy doesn’t just lead to personal savings; it also helps create new solar projects that are locally owned, generate employment opportunities, and drive the demand for solar energy, further accelerating the virtuous cycle.
Community solar works are simple: you sign up to participate in a project by paying a monthly fee, usually less than what you pay to your utility company. Depending on the state and utility provider, this may be as low as $0.25 per kilowatt-hour. Your provider will purchase solar credits from a community solar farm in your utility service area. These credits are then applied to your monthly utility bill, reducing your electricity cost.
Remember that your savings will vary monthly since the credits are rolled over each month. For example, when it’s sunnier, and the farm produces more solar energy in summer, your savings will be more significant than in winter when the farm consumes less electricity.
Another benefit of community solar is that you can take your subscription if you move within a service territory. It is an advantage over rooftop solar, which homeowners cannot quickly move if they move. Additionally, communities can use community solar to provide green power for people who wouldn’t otherwise be able to acquire it, including renters and lower-income homeowners. Some community solar projects are dedicated to supplying renewable energy for public utilities, helping them meet their state’s enabling legislation thresholds.
Finally, community solar projects can be sited on land not used for other purposes, such as abandoned or underutilized landfills or brownfield sites or on agricultural land (agrivoltaic farms). It can reduce the impact on natural resources and ecosystems, especially when compared to traditional fossil fuel power plants that often require clearing land for construction.