Solar adoption is surging across the U.S., and it isn’t just limited to rooftop solar. The newest innovation in the solar industry: community solar, which offers many of the benefits of a home solar energy system without the need to install solar panels on your roof. To understand whether community solar is right for you, you’ll need to learn about the process and technology, when you should consider it, and how you can find local community solar projects near you.
Community solar, also known as “shared solar” or a “solar garden,” is a solar power plant whose electricity is shared by more than one home or business. A third party, such as a municipality, utility, or project developer, will construct a large solar panel array and sell shares of that project to members of the community. In exchange, project participants receive the benefits from their share without having to install a solar panel system at their property.
Community solar projects offer both environmental and financial benefits. If you own or subscribe to a community solar share, you receive credit for the electricity that your share produces through a policy called virtual net metering. The credits appear on your electric bill and are counted towards your total monthly electricity use. Each credit is equal to one kilowatt-hour (kWh) of electricity.
For example: you use 1,000 kWh at your home in one month, and your community solar share produces 800 kWh. The 800 kWh in credits from your share are applied to your electric bill, and your utility then charges you for the remaining 200 kWh. You pay your community solar provider directly for the cost of your share or subscription.
Your electricity cost savings depend on the kind of contract you have for your share. There are two commonly used community solar pricing models:
Ownership. With this format, you buy some of the panels in the community solar project from the owner, either in cash or with a loan. You then receive all of the benefits from the share of the system that you own.
Subscription. With this format, you “subscribe” to the project and pay a lower price for the electricity sourced from the community solar project. Some subscription projects charge a fixed dollar amount that increases slightly each year, while others offer a fixed discount off your utility electricity rate.
The financial benefits of owning a share of a community solar garden are similar to buying a rooftop solar energy system. If you sign up to a subscription model, your savings will be similar to a lease or PPA for a rooftop solar energy system.
Community solar is a great option if you can’t (or don’t want to) install a solar energy system on your roof. Renters, apartment and condo owners, and property owners whose homes aren’t good candidates for solar can enjoy many of the benefits of solar by purchasing or subscribing to a community solar share. If you’ve already installed solar on your home, but aren’t able to meet 100 percent of your electricity needs with your panels, you can get a community solar share to make up the difference with emissions-free electricity.
Most community solar projects require that you live in the utility territory where the project is located. However, certain community solar companies, like Arcadia Power, also offer special billing structures that make it possible for residents of almost every state to own a community solar share. This option can be a great alternative for property owners who live in states where the economics of rooftop solar aren’t as favorable.
According to the Solar Energy Industries Association, there are 25 states with at least one active community solar project, and the market is expected to grow significantly in the next five years. Use a marketplace that lists community solar projects to explore all of your options. Different project owners offer different bill structures, prices, and savings – comparing your options is the best way to find the community solar project that’s right for you.
If you’re trying to compare community solar vs. rooftop solar, get offers from multiple providers of each solar solution. You can use EnergySage's Solar Calculator to compare your estimated savings from various rooftop solar options, and you can receive rooftop solar offers from qualified installers on the EnergySage Solar Marketplace. Whichever sustainable energy option you choose, you can be confident that you’re reducing your impact on the environment as well as your electricity costs – that’s what we call a solar win-win.
Vikram Aggarwal is the founder and chief executive of EnergySage, the online solar marketplace. EnergySage simplifies the process of researching and shopping for solar. By offering shoppers more choices and unprecedented levels of transparency, EnergySage allows consumers to select the solar installation quote that provides the best value for them, quickly and easily. Read all of Vikram's posts here.
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