Community solar projects let homeowners who don’t have good solar coverage benefit from local clean energy.
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Let the sun shine

The Bright Side of Community Solar Projects

Daren Wang
July 31, 2023

Embracing the Sunshine Together:

Powering your home with solar energy is smart for both your wallet and your carbon footprint. Solar power is one of the cleanest sources of electricity on the grid today, and it can save you money. But what if you want to go solar but you don’t have a broad, exposed roof to mount a solar array on? A community solar project might be your answer.

What is a community solar project?

A community solar project is a central solar facility, whose electricity is shared by more than a single property. While rooftop solar installations are measured in kilowatts, community solar projects are usually measured in megawatts. A single community solar installation can power hundreds or even thousands of homes. But what sets community solar projects above rooftop solar is their ability to make solar energy accessible to a broader audience. Community solar allows people to participate in the clean energy market who otherwise wouldn’t be able to.

Not everyone can afford the upfront costs of installing solar on their rooftop. People in condominiums, apartments or other multi-family buildings are blocked from rooftop installations as well. Even people with heavily-shaded homes might choose to participate in a community solar program.

By pooling resources to fund an offsite solar facility, community solar allows a diverse group of people to tap into the sun's potential and contribute to a greener world. There are two primary business models for community solar:

Ownership Model: With this approach, participants have the opportunity to buy a certain number of panels or a share of the community solar project. By becoming part-owners of the solar panels, they receive electric bill credits or savings equivalent to the power generated by the panels they own. The ownership-based community solar models closely resemble the process of purchasing a rooftop panel system, with the exception that no panels will be installed on the participant's property. Instead, they own a specific number of panels within the solar array or a designated number of kilowatts from the total capacity of the solar project. It is important to note that in such projects, participants can only acquire enough shares to cover their annual electricity usage; no more than that. The actual output of the solar project will be credited to them on their electricity bill, ensuring the benefits of ownership are realized.

Subscription Model: In this model, participants can subscribe to the community solar project and enjoy a reduced price on their monthly electric bills. Unlike the ownership model, subscribers do not own the panels or have a share in the project; instead, they simply purchase electricity at a lower rate compared to what they would pay to their utility company. Subscription-based community solar projects are the most common.

While program details vary from project to project, most subscriptions do not require any upfront fees to join and offer immediate bill savings.

So what happens when you sign up for a community solar subscription? Let’s take a look at the many benefits.

Lower Energy Bills

Participating in a community solar program can lead to significant savings on electricity bills. When you subscribe to a community solar project, you receive credits on your electricity bill for the energy generated by your share of the solar array. This reduces the amount of energy you need to purchase from traditional sources, resulting in lower monthly costs.

Environmental Benefits

At the core of community solar lies its environmental impact. By generating clean, renewable energy from the sun, community solar projects help to reduce carbon emissions and combat climate change. Community solar installations play a vital role in decreasing reliance on fossil fuels, thus mitigating air pollution and its harmful effects on human health and the environment. With each solar share, participants actively contribute to a healthier planet for future generations.

Support for Local Economies

Community solar projects can help revitalize local economies. Most of these projects are developed and operated by local companies, creating job opportunities and stimulating economic growth within the community. Also, the reduced demand for traditional energy sources helps lower energy costs for everyone in the area, benefitting both residential and commercial consumers.

Flexibility and Freedom

One of the most attractive features of community solar is its flexibility. Subscribers are not locked into long-term contracts, providing the freedom to opt-out or transfer their subscription if their circumstances change. This adaptability makes community solar an excellent option for renters or those who don’t expect to stay in their home long enough for the investment in rooftop solar to pay off.

Education and Community Engagement

Community solar projects often foster community interaction and promote environmental awareness. Participants become more engaged in understanding how solar energy works and its benefits, sparking conversations and knowledge-sharing among neighbors. Educational programs and community events centered around renewable energy can strengthen the bonds within the community.

Support for Renewable Energy Development

As more people join community solar initiatives, the demand for renewable energy increases, encouraging more investment in solar infrastructure, driving innovation and technological advancements in the renewable energy sector. The collective push towards cleaner energy helps accelerate the transition to a sustainable energy future.

The 2022 Inflation Reduction Act included $7 billion in funding to encourage the development of community solar programs. As projects are designed and approved, expect to see more of them in areas near you.

It’s important to note that the energy produced by most community solar programs is sent into the local utility’s grid and the subscriber gets a credit on their bill. When a home or apartment is directly connected to a community solar farm and the electricity doesn’t flow to the utility’s grid, that’s known as a microgrid. Microgrids are much rarer in the United States, but some communities have developed their own as power outages become more common.

Community solar is an important tool in the renewable energy landscape. Its ability to democratize solar power, lower energy bills, support local economies, and reduce environmental impact makes it a compelling option for individuals and communities alike. By embracing community solar, we can take another step towards a brighter, more sustainable future.

Community solar is a growing model for bringing truly clean energy to residents who might not otherwise have access, but it’s not available everywhere (yet!) Twenty-two states actively support community solar, and 33 have active programs. If you’d like to see if there’s a community solar program for you, Energy Sage has put together a comprehensive list of programs throughout the country here, and there just might be one in your neck of the woods!

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