Community solar is a growing market for people who need more rooftop space to install their clean energy system. These projects, also known as shared solar or roofless solar, deliver the benefits of clean energy to all electricity consumers. Customers keep their current electric utility and receive credits on their monthly bills based on the power generated by the project.
Cost
Renters, homeowners, local companies, schools, and organizations can participate in cooperative solar projects that reduce their electricity costs, bringing the advantages of solar energy to a larger population. The projects also help the environment and strengthen the grid. As more people join these programs, it will lower the cost of building new plants and create a virtuous growth cycle.
Unlike home solar installations, which require an upfront investment and lock you into a decades-long loan, community solar offers a flexible contract structure that allows you to cancel or transfer your subscription when you move. Most community solar programs use a single-bill model called Universal Consolidated Billing (UCB), which shows your monthly utility bill’s credits or savings.
Moreover, the solar panels are owned by the project developer, which manages and maintains them, rather than the subscriber. The solar energy the system produces is delivered to the electric grid and used by all subscribers on their bills. This type of solar power has no emissions on site, but it can increase the load on the local electric network, leading to voltage and frequency fluctuations. Consequently, the system must be designed with these factors in mind.
Benefits
Community solar offers a great opportunity to expand the benefits of clean energy for households that cannot install rooftop systems, such as renters and low-income families. But what is community solar? The community solar model is a proven way to reduce reliance on fossil fuels, combat climate change, and save money on electricity bills.
Customers can participate in community solar through either an ownership or subscription model. In an ownership-based program, customers purchase a portion of the project upfront and receive a proportional share of the solar farm’s electricity output on their monthly utility bill. In a subscription-based model, customers buy a fixed number of monthly kilowatts.
In addition, a few programs allow participants to invest in renewable energy investments through crowd funders or online investment platforms. However, gains from these projects are taxable, whereas electricity savings from community solar are not.
Many community solar programs are located in open fields, although they can also be constructed on capped landfills, abandoned industrial sites, and even schools. They may include energy storage capacity that allows communities to use clean electricity when the sun is not shining, increasing grid reliability and resiliency. These projects also create jobs throughout the supply chain, from research and development to engineering, manufacturing, and construction. They are a cost-effective and convenient way for utility customers to support solar power.
Regulations
The scale and duration of large-scale solar energy projects have significant impacts that local governments must consider. These projects can change the character of an area, imposing new land uses and changes in the economic and social fabric. They also require extensive permitting processes and surety requirements. The process can take years and occupy significant staff time, effort, and talent. If not properly regulated, these facilities can disrupt the future of a community and negatively affect property values and land use.
Communities seek ways to increase solar access without installing rooftop panels. It is why community solar is gaining in popularity. These schemes allow members to purchase or sign up for a subscription to a share of a nearby solar farm that feeds clean power into the grid and offers them cash and electricity credits on their utility bills.
These credits are a great way to reduce energy costs and simultaneously help the environment! However, due to their size, many community solar programs still need to qualify as utility-scale solar. Some industry organizations have a size threshold for determining whether a project is considered utility-scale, but these definitions can be difficult to define and apply.
Eligibility
Community solar (also known as shared solar) makes solar power accessible to millions of Americans who cannot install a rooftop system due to location, roof size, or financial circumstances. These customers gain economic and environmental benefits from solar power while helping build a more distributed and resilient electric grid.
Community solar projects connect to the grid “in front of the meter,” meaning they do not use traditional behind-the-meter systems. These projects can be investor-owned, cooperative, or municipal, depending on state regulations and utility policy. They are a key utility tool to promote distributed energy and reduce costs. These projects can be located in open fields, buildings, or parking lots.
The electricity they produce is sold to the public through a subscription program. The subscriber gets a credit on their utility bill equal to the value of the kilowatt-hours (kWh) produced by the community solar project. The kWh value varies by state and utility company but is generally higher than the price of traditionally generated electricity. Subscribers can join multiple community solar projects in their area, though rules vary by state.
