What is community solar, and how does it work?

Community solar is when many people or groups benefit from one solar energy system, known as a solar farm. It allows individuals to use solar energy without the need for panel installation. Whether you’re a renter, live in a home not ideal for solar panels or prefer not to deal with the logistics of installing and maintaining a system, community solar offers a flexible and accessible alternative.

By subscribing to a portion of a local solar farm, you can enjoy reduced electricity costs while contributing to renewable energy production. Your share of the farm produces solar power, fed into the grid. You get credits on your bill, reducing electricity costs. It’s ideal for backing clean energy and cutting expenses without major upfront investments or property alterations.

Solar arrays

The solar array is at the center of any community solar project — a large collection of solar panels installed in a shared location, often called a solar farm or solar garden. These arrays are strategically positioned in areas with high solar potential, maximizing sunlight exposure and energy generation. Setting up a solar farm begins with identifying an appropriate site, which might be a previously unused piece of land, such as a brownfield or an open field.  

Once a location is chosen, developers design the layout of the solar arrays, considering optimal panel orientation, spacing, and land slope to ensure maximum efficiency. The installation process involves key steps similar to those of a residential solar system:

• Site preparation: the chosen land is cleared, and the ground is leveled as needed.
• Mounting structures: the next step is to install the mounting structures to hold the solar panels in place. You can use fixed-tilt mounts, which keep the panels at a steady angle, or tracking mounts, which adjust the panels’ angle during the day to follow the sun.
• Panel installation: once the mounts are securely installed, the solar panels are positioned. Each panel connects to a central inverter, converting DC electricity into AC electricity.
• Grid connection: the final step is connecting the solar array to the local electricity grid, where it will be distributed.

A well-designed solar farm can produce significant clean energy, shared among subscribers in community solar projects.

Subscribers

People and organizations can join a community solar project by becoming subscribers, letting them enjoy the benefits of solar energy without owning the panels. Community projects generally offer easy sign-up processes and flexible cancellation policies, allowing subscribers to exit without penalties after a certain period. 

Likewise, many community solar programs include consumer protections, ensuring subscribers receive the promised benefits without hidden fees or unfavorable contract terms.

Here’s how it usually works:

• Subscription enrollment: potential subscribers select a subscription plan with a community solar provider. This process involves choosing your share size in the solar farm based on your typical electricity usage and signing a contract with the provider.
• Electricity purchase: instead of owning solar panels, subscribers buy the electricity generated by the solar farm and pay a monthly fee.
• Bill credits: the electricity generated by your share of the solar array is converted into bill credits, which appear on your regular electricity bill to offset your energy costs. Savings depend on your subscription size and the energy your share generates.
• Billing structure: subscribers typically receive two bills — one for electricity usage from their utility company and another for their subscription from the community solar provider. However, some projects offer consolidated billing.

This raises the importance of determining whether leasing, ownership, or community solar is the best option to maximize your investment. Consider your current energy usage, budget, and long-term goals and if you plan to stay in your current property before exploring community solar options.

Virtual net metering

Virtual net metering (VNM) allows subscribers to receive credits on their utility bills for the energy generated from their portion of the solar array. In a VNM program, each participant is assigned a share of the solar array’s output, and the energy produced by that share is translated into credits on their electricity bill, effectively lowering their energy costs. The credit amount is determined by the size of their share and the energy generated.

In some community solar setups, subscribers can buy a piece of the solar array, like a certain number of panels or a specific capacity in the project, giving them ownership of a real part of the solar farm. Electricity generated by their panels is credited to their bill, following a subscription model based on panel performance.

Benefits of community solar

Some of the key advantages of community solar energy include the following:

Financial savings

A major advantage of community solar is the cost savings. Subscribers get credits on electricity bills for energy from their share. These credits lower monthly costs, as solar farm rates are usually cheaper. Over time, these savings can accumulate significantly.

For example, if your share of the solar array generates enough energy to cover 50% of your electricity usage, and your typical monthly electric bill is $200, you could see a $100 reduction each month. Over the course of a year, that’s a savings of $1,200, and as electricity rates rise, your savings could increase even further.

If you’re wondering whether community solar is a good financial decision, try using a solar savings calculator to figure out how much you could save.

Environmental impact

Joining a community solar plan allows subscribers to fight climate change by cutting carbon emissions. Solar energy doesn’t produce greenhouse gases during use, as it’s a clean, renewable resource. Lessening dependence on fossil fuels, which emit large amounts of carbon dioxide and other pollutants, these projects help reduce air pollution, support sustainability, and create a healthier planet for future generations.

Also, while solar panels wear down over time, regular maintenance can help them last longer and keep working efficiently, boosting their environmental perks. This shows just how important it is to keep up with maintenance to get the most out of your solar panels.

Flexibility and accessibility

Not everyone can install solar panels on their property due to financial constraints, renting, or having a roof that isn’t suitable. For renters who don’t have a permanent property to use or those living in apartment buildings or in properties with unsuitable roofs, community solar offers a way to support renewable energy without needing installation.

Community building

Community solar projects help build a sense of community by uniting neighbors, local businesses, and organizations around a common goal. When people get involved, they contribute to a collective benefit and feel a sense of pride in supporting their neighbors. These projects can also strengthen local ties and create a shared sense of purpose as participants work together to promote sustainability.

The communal nature of these projects often leads to increased awareness and education about renewable energy, encouraging more people to take part in similar initiatives.

Challenges and potential barriers

Though community solar offers many benefits, challenges and potential barriers can affect its implementation and accessibility.

Location restrictions

One major challenge is location restrictions. These can come from state regulations, utility company policies or the physical limitations of the site. In some states, community solar isn’t fully supported by laws, which can reduce the number of available projects or complicate the setup of new ones. Also, utility companies may impose specific rules that limit the size or scope of community solar projects in their service areas.

Likewise, not all land is suitable for solar arrays, so assessing factors like sunlight exposure and environmental impact is essential. Site selection software can assist by analyzing various data points to determine if a property is suitable. This software can spot potential issues early, helping developers decide where to set up a solar farm.

Subscriber eligibility requirements

While the goal is to be inclusive, some programs have specific criteria that can limit participation. For instance, some projects may be aimed at low-to-moderate-income households, meaning participants must fall within a certain income range. Other programs might only allow residents from a specific geographic area or utility service territory to join.

These requirements can be a hurdle for potential subscribers who want to participate but don’t meet the necessary criteria. Knowing these requirements helps eligible individuals take full advantage of the benefits while guiding those who may not qualify toward alternative options.

To overcome these barriers, it’s crucial to carefully consider eligibility requirements, explore potential alternatives, and collaborate with program administrators for solutions. Tackling these challenges can boost community solar expansion and bring clean energy to more people.

The promise of community solar

Despite the practical challenges that may arise, the community solar model is a potentially revolutionary concept and it goes hand in hand with the idea of a self-sustaining community. Although the typical community solar project is still tied to the grid, an independent arrangement isn’t out of the question. 

In states where there are no laws prohibiting it, a group of homeowners could build a solar farm large enough to allow each household to receive clean energy without the utility company getting involved. 

As it stands, community solar presents a chance for homeowners to benefit from solar panels without having to buy them. That said, they need to keep the lights on, too. Through community solar, people can do just that, lowering their electricity bills and their carbon footprints at the same time.