How Community Solar Works [CNET]

Here’s how you can still benefit from clean solar energy without the cost and hassle of installing panels on your roof.

Going solar is a great way to save money on electricity and cut down on your household’s carbon footprint. What if you can’t put solar panels on your roof, or it’s financially out of reach? What if you’re a renter who can’t install panels on your home or apartment? Community solar could be the answer. 

The National Renewable Energy Lab has found that 42% of households and 44% of businesses in the U.S. are unable to access “behind-the-meter” solar, meaning solar power generated on-site. The lab estimates that community solar projects could one day meet the electricity needs of those households.

Community solar isn’t available everywhere. If it’s an option, getting your energy supply via a community solar project can make your home greener and help you save money without the hassle of construction or the substantial cost of installing your own panels. Here’s how community solar works, with tips on how to find a provider near you. 

What is community solar?

Community solar projects generate electricity from the sun just like rooftop solar panels do. They’re typically large solar farms or solar arrays that generate much more energy than a rooftop system. Area residents, businesses, nonprofits, and community organizations can become subscribers to a community solar project or, in some cases, part owners to receive renewable energy through their local utility, typically at a lower rate. 

“Community solar helps open access and democratizes renewable energy,” said Melanie Kelly, Vice President of marketing and client partnerships at Pivot Energy, a renewable energy provider and independent power producer developing community and commercial solar projects. “With community solar, we can serve homes, commercial entities, and households with low to moderate incomes.”

Installing solar panels is a great option for many people, but it’s not the best choice for every household. The upfront investment can be daunting, even with a 30% tax credit provided by the Inflation Reduction Act. Not every home is ideal for solar, either. 

“It’s an option for those who might have a roof that’s not a good fit for solar—maybe it’s too old, or they’ve got big old oak trees they don’t want to cut down,” said Ben Delman, senior communications director with nonprofit advocacy group Solar United Neighbors. “Folks who rent don’t own their homes, so they can’t install solar, but they can still benefit from solar energy through community solar.”

Renters accounted for around 30% of U.S. households in 2019, according to census data analyzed by the Pew Research Center. Community solar projects make this form of renewable energy available to more ratepayers, regardless of home ownership. It’s an ideal renewable energy option for Gen Z, whose members may be juggling high rents and utility bills.

How do I get the energy from a community solar farm?

Community solar farms, also called community solar gardens, may be installed in a nearby field or open space and can generate between one and five megawatts annually. They’re located in or near the regions they serve to provide economic benefits as well as clean energy. 

“We work with local communities, farmers, and grazers,” said Kelly. “All of our projects have some sort of plant mix underneath that can be grazed by sheep or pigs. That supports those communities, helps keep the land healthy underneath the panels, and keeps the array itself cool.” 

Community solar projects can also be located on top of a large building, such as a warehouse or apartment complex. Delman notes that IRA tax credits are incentivizing developers and other institutions to invest in community solar projects. 

Energy generated by community solar goes directly into the public electrical grid, where it’s pooled together into your utility’s energy mix: the combination of different sources, like solar, wind, nuclear power and coal that generates the electricity that flows into your home. Joining a community solar project offers the greater benefit of increasing the amount of clean, renewable energy in that supply. 

“As a community solar customer, you wouldn’t get the exact electrons that are being produced by the system,” Delman said. “What you do get is a credit on your bill relative to the share of the community solar array that you either own part of, rent part of, or have a stake in.”

How do I pay for community solar?

Depending on the project, you can participate in community solar by purchasing a share of a project or signing up for a subscription that charges a monthly fee. You’ll likely pay the community solar project on one bill plus a separate electric bill from your utility, where you’ll see a credit for a portion of the solar energy generated as a subscriber. 

“If you were producing solar on your roof, you’d typically have some sort of net metering arrangement where the utility recognizes that you are giving them energy and credits your bill,” Kelly said. “It’s the same thing with a community solar project.”

How large of a credit you get will depend on various factors. Even with the cost of the community solar subscription, your electric bill should be lower than usual, thanks to that credit. For example, Pivot indexes its fees to be lower than the credit on your electric bill, so subscribers always net out with savings. 

How to find community solar near me

If you live in a state with legislation supporting community solar, all you have to do to be eligible to sign up is pay an electric bill. You can sign up for an existing project or one that’s in the process of being built. Once the community solar farm is up and running, you’ll start seeing that credit on your electric bill. 

“There are no upfront fees, there’s nobody coming to your home. It’s just a lot easier to sign up,” Kelly said. “There aren’t any loan fees or interest that you might be paying if you get solar installed and finance it.”

Community solar projects are located in 44 U.S. states, but only 23 states plus Washington D.C. have passed legislation enabling or mandating support for them. States with the most community solar installed, as measured in megawatts, include Florida, New York, Massachusetts and Minnesota. Other states, like Pennsylvania and Maryland, are considering community solar legislation or regulatory changes. 

Kelly recommends checking out NREL’s website or the Solar Energy Industries Association website for lists of community solar projects to consider in your local area. In states with community solar legislation, your utility will also have information on community solar projects that it works with. Solar United Neighbors also maintains a community solar directory for certain states. 

As with any solar project, you’ll want to read the fine print to avoid scams and make sure you understand the rules. For example, if you’re moving households but staying in the same utility territory, check that you’ll be able to keep participating at your new address. Delman also cautions that a true community solar project will benefit subscribers directly with those solar credits. Beware of utility-owned projects that may resemble community solar but simply sell you solar energy at a premium. 

If community solar isn’t available in your area but you live in a state with energy deregulation, you may be able to opt for a green supplier through your electric utility. If it is, you can sign up for both to reduce your carbon footprint even further. 

“Consumers don’t have to choose between the two. If they live in a state with a deregulated utility, they can choose a clean energy supplier, or any supplier they want, and subscribe to community solar,” Kelly said. 

If your state doesn’t yet support community solar but you’re excited to participate, Delman urges you to get involved and help make it happen. 

“Reach out to your state legislators and say, this is an opportunity for me and my family to benefit from solar energy while creating jobs and economic development here in the community and keeping the money local,” he said. “It’s important that lawmakers are educated about community solar so that as these bills continue to move through, there’s opportunity for them to pass.”