In 2024, it’s a demonstrable fact: Most Americans want access to clean energy.
But switching to clean energy isn’t as easy as simply deciding to stop using coal or natural gas. What happens when you can’t install a solar panel on your roof, for reasons ranging from tree blockage to homeowner association rules? What if you rent or can’t afford solar panels right now?
In those cases, community solar might be a solution.
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Community solar expands access to solar energy by allowing you to use energy, not from solar panels on your roof, but from a nearby solar farm. Community solar could become a accessible option in the coming years. In 2023, the White House announced $10 million in awards to boost community solar and additional awards to projects that have a send the most benefits back to participating communities.
Unfamiliar with community solar programs? Let us break it down for you.
What is community solar?
Community solar is a fast-growing solar option for when traditional solar doesn’t work. Rather than using electricity from solar panels located on or around the home, community solar subscribers get power from larger arrays of solar panels usually located nearby.
Community solar arrays are typically owned by nonprofit organizations, third-party companies or utilities. Subscribers sign up to pay for the electricity produced by a portion of that array, often at a discounted price.
Signing up for community solar will make your bill look different, depending on your utility and your community solar supplier. In some cases, you’ll receive two bills; in others, the electricity generated by your portion of the community solar array will be credited against your utility bill. You’ll save over the course of the year, but your bills will vary month to month. The Department of Energy says typical savings are about 10% of energy costs per year.
In most of the US, utility companies operate as regulated monopolies. Unless otherwise mandated, they’re the only ones allowed to generate and distribute electricity in a given area. For community solar to really save consumers money, the state legislature needs to allow third parties to construct and operate solar arrays.
Why community solar?
The most obvious and attractive benefit of community solar is savings on your electricity bill. Saving 10% of an electricity bill in the contiguous US can be anywhere from $97.04 a year in Utah to $187.45 in Connecticut, according to the US Energy Information Administration’s 2021 data.
Community solar opens these savings to people who aren’t able to acquire rooftop solar: renters, low-income homeowners and people who live in shaded areas, to start. Some state’s enabling legislation requires that a certain percentage of subscribers are low- or moderate-income.
Community solar arrays can be built on a larger scale (which is typically cheaper) in places better suited to solar production. Instead of placing panels on roofs oriented in less-than-ideal directions or cutting down trees to eliminate shade, community solar arrays can be sited in ideal locations. That might mean more cheap, highly performing solar in a community than would otherwise be.
Watch this: Easy Ways to Lower Your Utility Bills and Save Money
Because community solar isn’t tied to a rooftop, if someone moves within a service area, they can take their service with them to a new address. Homeowners don’t take rooftop solar panels with them (some research shows that it does boost a house’s selling price).
Community solar can benefit the grid and utilities as well. Placing solar farms on the grid where there are few other power sources can help stabilize the grid. Solar power can also help utilities meet renewable power thresholds mandated by the state.
How does community solar work?
First comes the biggest hurdle: a legislature must pass a bill to allow community solar in that state. But not all states have passed such legislation. Existing forces can often prevent access, said Matt Hargarten, vice president of campaigns for the Coalition for Community Solar Access, a national organization advocating for greater access to community solar.
“Not everyone wants to see competition on the energy grid, namely utilities,” he said. “Those utilities are invested in keeping control of their territories, so generally they will oppose these types of bills, and they carry considerable power and weight in their states.”
But if that hurdle can be cleared, the next steps are relatively simple. A community solar developer establishes its solar array and begins to look for customers, often calling and emailing residents and advertising online and elsewhere. When someone decides to sign up, they pay the developer a fee for that subscription to the energy and, in turn, receive a credit that is typically 10% to 20% more than the bill. After that, it’s business as usual.
What states allow community solar?
As of December 2021, community solar projects were found in 39 states and the District of Columbia, according to NREL. Of those states, 22 and DC, have policies that support community solar.
In those states, community solar projects represent more than 3,200 megawatts of total installed capacity, and about 74% of that total market is concentrated in the top four states for community solar: Florida, Minnesota, New York and Massachusetts.
States with legislation supporting community solar
What are the differences between community solar and similar programs?
The version of “community solar” that we discuss today has, at times in the past, looked like other forms of solar access. Hargarten said the modern conception of community solar has evolved from things like co-ops and group plans, which are still around, but in different forms.
Here are some of the ways today’s community solar structure differs from some of those plans.
Group purchasing
A group purchase of solar is when a community of some kind — usually a municipality, employer, club, etc. — comes together to leverage its buying power to buy energy to cover the energy needs of its members. These arrangements, sometimes called community choice aggregation, or CCAs, are similar to a community solar project but aren’t as accessible because it’s not entirely inclusive.
“It gives them purchasing power to maybe get a better deal for their residents, kind of like how large businesses can get better deals from utilities,” Hargarten said. “In some states, CCAs can subscribe for community solar as a product for their citizens.”
Solar co-op
A solar co-op is typically made up of usually property owners who use their buying power as a group to get a better deal on solar installations and save money. But in a co-op, the process is so controlled by that group that it can be a challenging endeavor. Hargarten said the early days of solar power and co-ops are what laid the groundwork for community solar today.
“To do a solar co-op is a lot of work and requires a lot of organizing,” he said. Co-ops provide “a little bit of choice and control if you live in a vertically integrated or even deregulated territory.”
Community solar, which allows subscribers to buy electricity from solar farms like this one, lets you get solar power without the roof.
Clean energy supplier
Some utilities or energy suppliers offer a clean energy option. But often, those aren’t the same as a community solar project. Rather than installing local panels and guaranteeing savings, these deals are often more favorable to the companies.
“The clean retail energy suppliers don’t produce that energy, they get it somewhere else, most often outside of the state you live in,” Hargarten said. “With community solar, you’re actually supporting the building of solar projects in your community, and you’re guaranteed to save money on your bill. You will never pay more on your bill through a true community solar program.” Clean energy options from utilities may get more expensive over time.
What are the benefits of community solar?
For most people, the biggest benefit of community solar is likely the savings. You’ll receive the electricity the same as before, so why not save a bit of money while you use it? For most, a 10% to 20% savings is worth the switch alone.
But for many, the real benefit is what solar energy brings to not just your community but the world by replacing climate-warming fossil fuels. And you don’t have to have a clear view of the sky, own your home, have a suitable roof or even have enough cash in the bank to invest in solar energy. You just sign up.
“Community solar is one of the best ways to get equity in our energy system and more renewables onto the grid quicker,” Hargarten said. “Those felt like very noble causes to me. The premise behind community solar is that about 75% of Americans can’t access rooftop solar.”
What are the downsides to community solar?
The drawbacks of community solar are fewer than they once were. There was a time when it was a challenging process to sign up. Now, just a few downsides remain, and most come from the existing utility environment.
“Once a state decides that they want to do community solar, the utility — who is generally opposed to it in the first place — has a very important role to play in the issuing of bill credits and the interconnecting of the facilities to bring them online,” Hargarten said. “Sometimes, that process can be a little sloppy, and there are some states where maybe credits haven’t been applied in a timely manner or it’s taking forever to get projects interconnected into the grid.”
The only other challenge can be wait lists for programs in new states, where so many people want to sign up, the provider simply doesn’t have the capacity yet. But even that problem is beginning to fade.
Long wait lists for community solar programs makes it difficult for new customers to sign up.
Is community solar right for me?
If you live in an area that has access to community solar, it’s likely an option to look into. Not only does it support clean energy, it will probably save you money and might guarantee savings. And although there was a time when signing up was challenging, Hargarten says it’s become much easier.
“The product has become almost as easy as signing up for Netflix,” he said. “It used to be onerous contracts, credit checks and all these other things. But as financiers have become more comfortable with these products, it’s become month-to-month, cancel whenever you want, no credit checks and a really easy energy tech product for people to sign up for.”
Plus, community solar deals may actually offer a great amount of flexibility.
“If you move, you can bring that contract or subscription with you to your new house, as long as you’re still within the utility service territory,” Hargarten said.
