You want to use green energy, but aren’t sure whether community solar or a home array is the better choice. Let’s break down the pros and cons of signing up for community solar.
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The basic idea of community solar is to allow more people to access the benefits of solar power without everyone having to install solar panels on their home (if they own one).
If the idea of community solar is totally new to you, check out our guide, which covers the three main models of community solar, program designs and billing models, and info on the state of community solar in the U.S.
If you’re wondering if you should sign up for community solar, read on!
Should you sign up for community solar?
Are you a renter interested in accessing solar power? A homeowner who can’t decide if it’s better to install your own residential rooftop array?
- Community solar is far simpler than installing your own rooftop solar panels – once you’ve found a community solar program you like, you can sign up in a matter of minutes
- With a community solar subscription, there’s no (or very little) upfront cost to participate – with a home solar array, you pay for the entire array upfront (or as a loan) and only get some back as tax credits or rebates
- A share or subscription in community solar doesn’t obligate you to maintain panels or troubleshoot if your tech goes haywire
- Community solar offers you access to solar power even if you don’t own a home or have a roof or site suitable for a solar array
- Community solar also offers greater flexibility – you can usually keep your lease or ownership even if you move (within a certain area), and can typically sell or donate your subscription whenever you like (it’s tricky to take a rooftop solar array with you if you move!)
Other reasons to sign up for community solar include potential cost savings in areas where solar power works out cheaper than electricity generated by more traditional (read: coal) means. There’s also potential for more stable electricity costs, with less fluctuation in solar power prices than with coal, oil, and natural gas.
If you’re looking at community solar as an investment vehicle, however, you might want to reconsider. Most programs are set up so that customers can only subscribe to the level of their annual household electricity use.
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If your share in the project generates significantly more electricity than your household uses, you may have to actually repay the oversubscribed bill credits back to the utility or project operator. This is the case in Oregon, where any oversubscription repayments are then reallocated to low- and moderate-income subscribers to subsidize lower rates.
Community solar is a great choice for low- and moderate-income households
The cost of installing a solar array is out of reach for many households. Even if you own a roof or patch of land, it doesn’t mean you have thousands of dollars to spare to purchase solar panels. And if your credit history isn’t great, like many Americans, you might have a hard time accessing financing for a home solar loan. (Even if you can access financing, you’ll want to check that the interest doesn’t outweigh potential savings on your electric bill!)
If you want to experience the benefits of solar power and your income is considered low or moderate (LMI), community solar is a great choice. At least 20 states offer provisions requiring or incentivizing LMI community solar. In other states, community solar projects often set aside a percentage of subscription capacity for LMI households.
Community solar benefits everyone!
Community solar allows more people to benefit from solar energy, even if they can’t install a residential rooftop array of their own. Solar farms also provide benefits to the wider community as they reduce reliance on fossil fuels, which means cleaner air for all and fewer greenhouse gas emissions.
As well as playing an important role in tackling climate change, solar farms contribute to a more diversified energy grid, offering greater stability and predictability.
Many clean energy developers are now sitting community solar projects on underused sites, such as landfills, brownfield sites, and public, commercial, and industrial rooftops. Depending on their design, these solar farms can help support pollinator-friendly habitats and contribute to habitat restoration on contaminated sites like brownfields and landfills.
When solar projects are built on farmland they can provide shade for livestock. These projects can also be used to bank land for future agricultural use while helping to improve soil quality by preventing soil erosion.
The best states for community solar
You’d think that the best states for community solar would just be the ones where the total insolation is the highest, i.e., the states that get the most sun. That’s not necessarily the case though, with some states far quicker to enact policies that support community solar. These states tend to be the ones where solar developers set up shop, meaning more choice for community solar subscribers.
I noticed a theme when looking for the best community solar programs; most of the providers offer subscriptions in the following states or regions:
- Colorado
- D.C.
- Illinois
- Maine
- Maryland
- Massachusetts
- Minnesota
- New Jersey
- New York
- Oregon
- Vermont.
Many community solar developers are also gearing up for projects in other states, so if your home state isn’t listed here, don’t worry. Overall, 20 states and Washington, D.C., now have provisions requiring or incentivizing low- and moderate-income (LMI) community solar. This helps expand access for everyone.
Even in states that haven’t taken steps to regulate or incentivize community solar, customers can still access a variety of community solar programs. And, if you’re feeling ambitious, you could look into setting up our own special purpose entity to establish a community solar project with a few like-minded individuals.
Recent regulatory changes for community solar
In 2021, Illinois, Delaware, and New Hampshire increased their maximum community solar system size limits. Delaware and Oregon both loosened their requirements for community solar as a way to expand access to LMI households.
After some uncertainty over the future of community solar in the state, and a pause on funding, Illinois’s Climate and Equitable Jobs Act gave community solar a real shot in the arm in 2021. The act increased the Solar for All program by $30 million and added capacity in the Adjustable Block Programs’ community solar subprogram for projects waitlisted when funding lapsed.
New York State Energy Research and Development Authority (NYSERDA) also introduced the Inclusive Community Solar Adder, adding $52.5 million to previous New York community solar incentives. At least 20% of the new capacity will be reserved for LMI communities.
New Jersey launched its Successor Solar Incentive, which will provide payments for renewable energy certificates (RECs) from community solar. LMI participants also get a bonus under this incentive scheme.
Maryland, Oregon, and Hawaii are all implementing state-level community solar programs. Together with Illinois and New Hampshire, these states are set to install more than 1,000 MW of capacity in the next year or so.
How to choose a community solar program
There’s considerable variety in community solar programs, with some ranging from just a few panels to others running at 5 MW or more. Figuring out your best option can be a challenge. Here are a few things to consider:
The size of the community solar project – a larger provider might offer more competitive pricing and reassurance of longevity but might not be as responsive or grassroots as smaller projects run by non-profits or special purpose entities.
A company’s reputation and history – this is often tricky because there are so many new community solar projects. Try to find at least a few customer reviews, though, or call and ask if you can be put in touch with any current subscribers or owners.
Pricing and billing (i.e., program design) – some projects charge a monthly fee, others an upfront fee when you first subscribe; some offer net metering and others a tariff system; some have cancellation fees, offer guaranteed pricing, variable pricing, or introductory promotional pricing followed by higher rates. Find out the pricing structure and make sure you know all the costs before subscribing.
Panel type – not all solar farms use the same technology, with variable quality and size of photovoltaic panels, inverters, battery storage, etc. This can make a big difference in how much power your share of panels will generate. Ask for real-world data, not an estimate, so you can make a reasonable calculation of any cost savings.
Location – just as panels and other equipment make a difference in energy production, so too does location. If your community solar project has panels in a field with full sun, great! If they’re on a rooftop that’s partially shaded during the day, the same tech won’t get you the same amount of electricity. Again, ask for data on actual energy generated, not estimates or capacity.
Contract length and flexibility – most community solar projects encourage long-term participation with 20-year contracts, but some have shorter contracts. Be sure to find out how long you have to sign up for and how flexible the contract is if you move out of state or out of the service area. Can you sell, transfer, or donate the share or subscription?
Another key question to ask when considering community solar is if a company has ownership and subscription options available. With ownership, you actually buy a share of the panels in the community array. This gets you greater savings on energy bills and means you (usually) get renewable energy tax credits.
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With a subscription model, you don’t own the panels, so you don’t get the tax credits. However, subscriptions are usually easier to sign up for and to cancel, get you some savings on your energy bill, and can be operated as a pay-as-you-go program.
There are nearly 2,000 community solar programs in the U.S., which makes it a bit intimidating to begin looking for a project that suits your needs. Thankfully, you’re now armed with the right questions!