What is community solar?

How does community solar work?

Though it varies from state to state, community solar projects typically work by providing a discount to subscribers who sign up through their local utility provider. Other programs allow residents to sign up directly through the community solar project. Either way, by opting in to community solar, you receive a percentage of savings off your monthly electric bill.

Community solar gives equal access to benefits of solar energy regardless of property type and ownership.

Community solar projects are considered third-party marketplaces. They’re generally regulated at the state level, so state laws dictate how the programs work. Regulations differ from state to state, so opportunities vary depending on where you live.

For example, in California, customers in specific locations can sign up for the Pacific Gas and Electric (PG&E) Company’s local Green Saver program and receive up to 20% off their electric bill. Proximity is one requirement; customers must be within a 5-mile radius of the community solar plant. The program is available to businesses, homeowners and renters — anyone in the designated area who has an electric utility account with PG&E can subscribe.

In Oregon, organizations like the Oregon Clean Power Co-op work more like a solar farm. They choose a location, such as a field, and build and manage the solar array. Customers pay upfront for their panels, choosing as many as they need to power their house or apartment.

“You don’t have to own a home,” explained Dan Orzech, the co-op’s general manager, who has been in the solar industry for more than a dozen years. “You just have to pay an electric bill to get your power from a community solar project.”

“It’s also a great solution for people who can’t put solar on their roof,” he added. “In Oregon a lot of homes have too many trees around them. Or the roof might face the wrong direction.”

» DISCOVER: What are ground-mounted solar panels?

Benefits of community solar

There are many benefits to community solar. These community programs are available to households of all income levels — and some states, like Oregon, offer discounts for low-income households, according to Orzech. You also don’t have to own your home; if you have an electric bill in your name, you can participate.

There’s no upfront cost to the utility subscriber model. “If it’s a solar farm, you’re buying your panels upfront,” said Orzech, “but there’s financing available and it’s a lot cheaper than putting them on your home because the co-op is buying materials in bulk, installing in bulk.”

Other benefits include:

• You don't have to install anything on your home.
• There’s nothing to maintain — the energy comes from the community solar farm rather than your own solar panels.
• Energy cost savings range from 5% to 25% a month.
• It’s a good supplement to other energy-saving strategies, such as energy-efficient appliances or windows.
• You’ll shrink your environmental footprint and reduce greenhouse gas emissions, helping to combat global warming.

What are the downsides of community solar?

There are few actual downsides to community solar. “I don’t know if there are downsides so much as limitations, if you’re comparing it to having panels on your roof,” said Orzech. “One specific advantage to home panels is that you can have a backup battery. You don’t get that with consumer solar, and that might be a concern in areas where grid outages are common, like California.”

Other limitations include:

• Compared with having panels on your roof, you won’t have the potential to sell back excess solar energy to your local utility company.
• A homeowner who installs a solar array on their house is increasing the home’s potential resale value — subscribing to a community solar program does not.
• Your savings may be diluted by administrative costs at the community solar and local utility level, so ask upfront about fees.
• Community solar isn’t available to everyone yet. According to the Solar Energy Industries Association (SEIA), 41 states and Washington, D.C., have at least one community solar project online.

Is community solar worth it?

For most residents, community solar is worth it. Community solar farms or projects enable access to clean energy for people of all income levels and homeownership statuses, without the expense of buying and installing a solar array. These solar programs also help to rally a community around environmental issues, such as global warming and air quality, that affect the quality of life locally.

One downside to community solar is that participants don’t always receive incentives — like tax credits — beyond reduced energy costs.

» LEARN MORE: How does the federal solar tax credit work?

How do I buy community solar?

There are several ways to find out if community solar is available in your area. Check with your local utility, which may have relationships with local community solar projects that send solar energy to their grid. With PG&E in California, for example, those who opt for the Green Saver program save 20% on their electricity bills.

Some community solar projects allow you to work with them directly to purchase or lease a certain number of panels. Do an online search for “community solar program near me.” You can also contact a local solar company in your area for advice.

Bottom line

Community solar offers many benefits with few negatives. It allows households and businesses without solar panels to enjoy the cost benefits of solar power and contribute to the development of clean energy. If you're interested in clean solar energy but can’t install solar panels because you don’t own your property, your property isn’t fit for panel, or you don’t want to make the financial investment, search for a community solar program near you to get started.