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  • Sarah Lozanova

What Is Community Solar?

Updated: 6 days ago



Solar energy use has skyrocketed in popularity in recent years, but mostly within certain market segments. In particular, renters, low-income families, residents of multiunit buildings, and households with shaded properties have largely been left out. In many states, an alternative ownership model has made solar energy use feasible, practical, and affordable for many more American households and businesses.


Community solar farms, also known as community solar gardens, are installations that provide renewable energy for a group of households, organizations, or businesses. This arrangement enables participants to enjoy the benefits of clean energy without having solar PV modules installed on their properties.


Typically, the electricity generated from community solar farms is more economical than grid power from the electric utility. This ownership model is relatively new to the solar market and allows more households and businesses to join the clean energy movement.


Community solar programs utilize a concept called virtual net metering, allowing utility customers to receive credits on their electricity bills from solar power generated by the photovoltaic project. Typically, subscribers have two bills: one from the utility company and another from the solar farm.


There are community solar farms in 39 states and Washington, D.C., and there are more than 3,000 megawatts of installed PV capacity on these farms. But, there are far more in some states than in others. This concept is growing in popularity, especially in states with supportive laws and policies.


The leading states for community solar include California, Colorado, Florida, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Jersey, and New York. Policies make community solar farms prohibitively expensive or difficult to develop in some states. For example, some states might have policies that limit the number of subscribers who can join a community solar installation, making the projects less economical to develop and operate.


How Does Community Solar Work?

The ownership of a community solar farm varies by the project, and a couple of popular models exist. Typically, the solar farm is owned by a solar developer, utility company, investment company, or the members themselves. The exact cost to customers varies depending on the size of the subscription or the amount of power generated.


Variable Prescription Options

These pay-as-you-go plans require members to sign up for a portion of a solar farm. Then, they make monthly payments for the electricity produced by their portion. The monthly payments vary depending on the climate and weather.


Therefore, subscribers will likely pay less in the winter when the days are shorter and pay more in the summer. It is important for solar subscribers to understand that their monthly bills will vary, so they can budget accordingly.


Fixed Prescription Options

With this type of plan, subscribers sign up for a specific proportion of the community solar farm. Thus, they pay a fixed monthly fee based on the subscription size. The payments are the same throughout the year, regardless of how much electricity the solar panels produced.


Many states are intentionally updating their policies to make community solar farms an attractive option for increasing solar access. When this happens, there is often a spur of development to make up for the pent-up demand and a surge in project development.


What Are The Benefits Of Community Solar?

Community solar farms have numerous advantages for utility customers, communities, electric utilities, and the planet.


Financial

Often, joining a community solar farm results in lower utility bills and it usually doesn’t require any upfront investment. Unfortunately, purchasing a solar array is not affordable to all homeowners, so community solar farms make clean energy available to people with low to moderate incomes. Some states or utility territories have special programs available for low-income residents that make solar gardens even more affordable.


However, joining a community solar project doesn’t always result in greater cost savings long-term compared to purchasing a solar energy system, especially for people with sunny properties. Also, members of community solar farms don’t usually get the tax credit, renewable energy credits, or other incentives, but the savings can be indirectly passed down to solar subscribers through lower-cost electricity.


Flexibility And Ease

Most solar farms allow members to cancel with a certain amount of notice, often for no fee. Also, many programs allow members to continue their membership with a community solar farm if they move within the same utility service territory. Many subscribers appreciate that it is so easy to join a solar farm or terminate the contract,


Environmental Protection

Just like rooftop solar, community solar gardens have no emissions and reduce reliance on fossil fuels. As concern about climate change increases, these solar projects provide convenient solutions.

Expanded Options

Unfortunately, not all utility customers are a good fit for installing solar panels on their homes and businesses. In particular, renters, owners of shaded properties, and residents of multifamily buildings often can’t install solar panels. Thus, community solar subscriptions overcome these hurdles. Many states with renewable portfolio standards are exploring ways to increase the use of clean energy and phase out coal, oil, and natural gas-fired power plants.


Community-Building

Solar gardens show that great things can happen when people work together and collaborate. Often, community solar farms bring together a group with the shared value of transitioning to clean energy.


Maintenance

When a homeowner purchases a solar system, they are responsible for the maintenance and repairs, although warranties can reduce the cost. It is important to have homeowners insurance that covers the solar installation in the case of a natural disaster.


By contrast, with community solar farms, the solar farm owner is responsible for maintenance. This offers peace of mind to members that they don’t need to review solar monitoring data, utility bill credits, or inverter readouts to make sure the system is operating correctly.


Conclusion

In many states, community solar farms are the fastest-growing segment in the industry. As each project comes online, often hundreds or even thousands of households benefit. In general, laws are changing to make community solar farm development more favorable, but it varies widely on a state-by-state basis.


There are many opportunities for solar companies to get involved in the community solar movement, especially with solar system design, construction, and maintenance.


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