What is a Community Solar Program? Is Joining Worth It?

Warren Evans

As the solar industry continues to boom, prices remain a huge obstacle to mass adoption.

Thankfully, community solar programs offer consumers an easy and cost-efficient way to access renewable energy in their area without the upfront cost of purchasing a solar panel.

By enrolling in a community solar program, consumers can reduce their carbon footprint, power their homes with renewables, and even lower their utility bills.

We’ll explore the benefits of community solar programs and explain how they work based on key insights we’ve acquired from working extensively with New York’s community solar programs.

What Is Community Solar?

Community solar programs are local purchasing programs that allow consumers to lease or subscribe to solar-based projects in their area.

For customers who don’t have the money or are unwilling to install solar panels on their roofs, these community projects offer them a way to source their electricity through solar without the hefty investment.

Consumers benefit from lower utility bills and cleaner energy, while the project owners accrue revenue. Utility providers even benefit as community solar projects promote greater stability for the grid.

Projects may be developed at an off-site grid or on-site in the case of condominiums, HOAs, and industrial parks.

Some people may refer to community solar projects as solar gardens, parks, or even rooftops, depending on their specific composition.

How Do Community Solar Projects Work?

There are two different models in which customers can access community solar projects:

The subscription model offers a more affordable way to access community solar projects, while the ownership model requires a larger investment but more long-term savings.

Unfortunately, not every state offers community solar programs, so access depends on your location.

Currently, 39 states, including Washington D.C., have a rudimentary community solar program in place, while 22 states, including Washington D.C., have policies in place to support community solar projects.

Community solar projects are handled by third-party vendors who operate within the state’s open energy marketplace to provide alternatives to consumers.

It should be noted that ¾ of the total market share of all community solar projects is concentrated in four states: New York, Florida, Minnesota, and Massachusetts.

Who Can Benefit from a Community Solar Program?

Anyone without solar panels can benefit from sourcing their energy needs from a community solar project. However, we find that these projects tend to appeal to and benefit the following demographics:

Examples of Community Solar Projects

Community solar projects can be built anywhere with enough land mass to accommodate large solar panels. Some common projects you may see in your area include:

Pros and Cons of Community Solar Programs for Customers

Community solar programs work great in theory and offer several benefits to consumers and utility providers. However, there are some disadvantages to community solar programs, especially when compared to purchasing your own solar panels with a home battery backup.

Pros

Low Upfront Cost: If you want to power your home with clean energy and don’t have the money or roof for solar panels, then community solar programs offer you a cost-effective way to achieve that task. Even ownership projects will not cost as much as purchasing and installing your solar panel system.
Out of Sight, Out of Mind: Solar panels, batteries, and parts require some maintenance and come with replacement costs. Purchasing or subscribing to a community solar program allows you to reap the benefits of solar energy without the overhead.
Virtual Net Metering: Customers who own solar panels through a community solar project can receive credits on their utility bills from the power each panel they own produces. This drastically lowers, if not eliminates, your electricity bills for good.
Clean Energy: Community solar projects power your home with clean energy, so you have cleaner peace of mind.

Cons

Not Always Popular: Some community members may be opposed to community solar programs in your area as they can be quite large and aesthetically unpleasing (depending on who you ask).
No Tax Benefits: Community solar programs don’t offer the same tax incentives, such as federal tax credits, you would receive from purchasing a solar panel yourself.
Benefits May Be Marginal: Community solar programs will lower your utility bill anywhere from 5% to 15%, but these benefits are marginal compared to owning your own solar panels.

Utility Benefits of Community Solar Programs

Utility providers can also benefit from community solar programs by acquiring energy from more stable sources. Likewise, the concentration of energy production in one area also helps promote grid stability in that area.

Utility providers can also better meet renewable goals set up by their state by working with local solar projects in their area.

Lastly, community solar projects also help spur engagement between members of the community and their utility providers by helping to acquaint them with where they source their energy. Similar to the farm-to-table trend, community solar projects allow community members to come together over shared goals, such as reducing their collective carbon footprints.

Should I Join a Community Solar Project

If you don’t own solar panels or have the means to acquire them, then there are virtually no downsides to joining a local community solar project.

In our experience, customers have saved anywhere from 5% to 15% on their utility bills just by subscribing, and they always feel comfortable knowing they are receiving clean energy.

Plus, with the inflation rate hitting the natural gas market, community solar is a great inflation buster that can prove promising and reliable in the long run.