Community Solar – A Comprehensive Guide
New developments across the United States have been introducing many new people to the idea of community solar. In fact, the idea is becoming so prevalent in today’s world that most people find out about community solar through a news report or by simply driving past a field of carefully arranged solar panels.
With community solar growing rapidly in the United States, we hope to provide an educational resource to provide answers to any questions on the subject. For this reason, we’ve put together this comprehensive guide to cover everything there is to know about community solar.
What is community solar?
Simply put, community solar 1 can be defined as “a solar energy installation in which users can pay to receive output credits and tax benefits.” In this sense, community solar is essentially a group of people sharing the electricity generated by harvesting solar energy.
Community solar has adopted many official and unofficial monikers. Other names include:
- Solar Farms
- Solar Gardens
- Community Solar Farms
- Roofless Solar
- Shared Solar
- Energy Sharing
Of course, with so many names and the ability to be built anywhere the sun shines, solar farm projects come in all shapes and sizes. In the United States, there is a fairly large chance that there is a community solar garden somewhere near you.
In most cases, a government, private company, non-profit, or utility will install arrays of solar panels and offer individuals a chance to essentially lease energy from the solar farm, rather than using traditional utility electricity. Otherwise, many shared solar projects are cooperatively owned power plants for members of a designated community (i.e. housing development or city).
Community solar projects are easy to identify. Although they are more common in sunnier states like Nevada, California, and Colorado, solar farms can be seen in many communities throughout the United States. Like in the image above, a community solar project may not be much more than simply a few rows of solar panels. Typically, solar farms will be encompassed in a fence with security and utility equipment surrounding the arrays.
Community solar is great, in that it can bring an immense amount of electricity to locations anywhere in the world. In order to operate, solar farms only require a set amount of equipment and the free, renewable energy provided by sunlight. Globally, solar farms are being built in the UK, China, and beyond. The image below was taken at a community solar farm in South Sudan.
Of course, community solar projects come in all shapes and sizes and are not always located in the middle of a field or the desert. Government, utility and other buildings with unused solar potential on the roof can also be used as the location for a community solar project.
Financial Benefits of Community Solar
Financial benefits are one of the main, obvious reasons that individuals are choosing to utilize community solar projects for their electricity. Once it is built, a community solar project does not require much capital to maintain. Aside from security, monitoring, and personnel, there are no added costs to generating electricity, because sunlight is free of charge. With this in mind, community solar farms are usually able to pass the financial savings onto project participants.
Net Metering & Virtual Net Metering (VNM)
Those who are familiar with rooftop solar may already know that net metering is a utility billing system in which customers produce and send electricity back to the grid, only being charged for excess electricity consumed. Although the specific credits and financial numbers vary from state to state, net metering is essentially set up so that households could earn “renewable energy credits” when they produce excess electricity. In doing so, homes can apply their credits to any utility energy they consume at night, or whenever the solar panels are not directly producing electricity. Below, is a typical chart of a 100W solar panel’s electricity production throughout the course of a day.
One of the most common ways for individuals to financially benefit from community solar is through virtual net metering (VNM) programs. With virtual net metering, the same sort of policy applies as in net metering. The only difference between the two is that virtual net metering is, well, virtual. This means that the solar isn’t actually being generated on site at the home, but rather on the premises of the community solar project. Participants typically “purchase” enough electricity from the solar garden each month to cover their expected electricity demand. The virtual net metering credits are then applied to a home’s electric bill.
Discounted Kilowatt Hour Rates for Community Solar
One of the fastest ways to see if you could immediately financially benefit from community solar would be to analyze what you are currently paying for your electricity. Utility bills are typically broken down into one or multiple kilowatt hour (kWh) rates for using electricity. These amounts are sometimes steady, however may increase both seasonally and with the time of day. Since its inception, of course, the cost of utility electricity has been steadily increasing.
With community solar, participants are offered the chance to purchase electricity at a flat rate. In some contracts, cost per kWh rates may be fixed over many years, or tiered to increase with the rate of inflation. What is critical here, however, is that community solar contracts allow you to take more financial control of your electricity costs. Whereas utility bills can be highly variable, community solar participation is generally a better way to lock in and plan your energy expenses.
With the right provider, community solar may even come at a guaranteed percentage discount of your current utility spending. With variance nationwide, community solar participants usually save up to 15% on their monthly electricity costs. With savings each month, discounted utility bills are one of the best ways to save a large amount of money over time.
Environmental Benefits of Community Solar
As you may imagine, there are many environmental benefits of community solar. For those taking action to combat climate change through the reduction of harmful greenhouse gas emissions, community solar is an extremely popular way to have a large, positive environmental impact.
Whereas it is true that there can become harmful gases emitted when a solar panel is created or transported, solar power is a clean energy source that does not require additional fuel. When sunlight hits a solar panel, no toxic chemicals are created, and free, renewable energy can be generated for well over 30 years.
As you can see from the chart above from world-nuclear.org 2, the greenhouse gas (GHG) emissions of a Solar PV system is minuscule in comparison to that of natural gas, oil, and coal. By adopting technologies that reduce carbon emissions, climate change and global warming can be slowed down significantly.
Plus, it is important not to forget the positive impact that solar energy has on local air quality. Multiple studies have shown 3 that air quality and local respiratory health has increased in areas where coal plants have closed. As it turns out, solar energy is a great way to replace fossil fuels for generating electricity.
Community Solar vs Residential Solar
With millions of homes installing solar panels on roofs nationwide, it is hard to deny the popularity of residential solar. For those looking to learn more about how residential solar weighs in against community solar, here are the most important things to know.
What is Residential Solar?
Residential solar, also known as home or rooftop solar, can be defined as the installation of solar panels on a residential home for the purpose of financial or environmental benefits. Unfortunately, about 25% of roofs in the country are not suitable for PV solar energy systems. This is generally due to:
- Large amount of shade coverage from trees
- Roofs being too small or not facing the sun
- Roofs with flammable material such as thatch or wood
So in order to make sense financially, residential solar requires a roof that meets a certain set of conditions. As in the image above, a good roof for solar is angled to receive a significant amount of sunlight throughout the day. There are no trees or neighboring buildings casting shadows on the roof, and the structure and material are rated to handle the weight and use of solar panels.
Other Residential Solar Barriers to Entry
Beyond that, there are many unique setbacks that prevent individuals from going solar. In fact, it is estimated that 85% of U.S. Residents 1 are not able to afford or install their own residential solar panels. As electricity demand, location, and wealth are all individual case-by-case variables, there are many reasons people cannot or choose not to adopt residential solar. These include:
- Systems are too expensive to install
- Bad credit disqualifies financing options
- Aesthetics, Solar panels can be perceived as not being visually pleasant on some roofs
- Worrying about holes or damage to property
- Not a property owner (can’t install)
Basically, if you do not own a home with a roof that is good for solar, then your options are limited. For those who do not like “the look” of solar panels or have a property heavily shaded by trees, the chances to benefit from solar energy are minimal. Additionally, residential solar systems can be expensive to finance and unreputable installers may cause property damage to your roof, yard or home.
Pros of Community Solar vs. Residential Solar
Conversely, community solar is a great option when being compared to residential solar panel installations. This is because:
- It works for renters
- No roof is needed
- There is nothing to maintain
- And you can get a guaranteed discount
Ultimately, community solar is a hands-off experience. In fact, you never even have to see the solar farm in action in order to use its electricity. What cannot be stressed enough about community solar is that it is one of the easiest ways to adopt green electricity and save on electric bills. Compared to residential solar panel installations, participating in community solar programs open the door and minimizes risk for those who cannot or do not wish to purchase their own personal solar energy system.
Cons of Community Solar vs. Residential Solar
Clearly, community solar is a great way to quickly save money on electricity with clean, renewable energy. However, there are some barriers to entry in which having a personal solar energy system may be more beneficial. Residential solar can be a good option, as community solar has limitations like:
- Not being available for off-grid participation
- Not being available in some area or states
- Not qualifying for federal tax incentives.
For example, if you are in a remote location that is not hooked up to the utility grid, then you will not be able to participate in a virtual net metering program. Instead, solar energy can be harvested on your property and stored in batteries for a sustainable, off-grid living experience.
Additionally, if you are trying to save the absolute most money on your electricity by utilizing solar energy, then a residential solar panel installation may be the best financial option because it qualifies for a large federal tax incentive 4. This helps many homeowners save more money overtime with their renewable energy system investment, but becomes unavailable for residential installations on January 1st, 2022.
What is the signup process for community solar?
Without any large barriers to entry, participating in a community solar project is easy. Below, we will go into detail about the steps involved in signing up and participating in a community solar program.
How to Sign Up For Community Solar
Unlike a residential solar panel installation, going green with community solar is as easy as the click of a few buttons. It is generally free to enroll in and contracts are not overly bounding, unfair, or endless. Most projects have a website in which area community members can sign up to enroll without having to speak to anyone at all.
More importantly, nothing actually changes when you sign up for a community solar program. Besides the fact that you are now getting a discounted rate on electricity for supporting a green energy system, making the switch to community does not actually impact a typical user’s life whatsoever. With community solar, there is no equipment to purchase, store, or maintain. Homeowners (or renters), can continue to use their homes’ electricity as normal.
How to Find a Community Solar Project Near You
Of course, to get started with community solar, you will need to find your farm. Wikipedia features a small list of notable community solar projects in the states of California, Colorado, Florida, Maryland, Massachusetts, New York and Utah 1. Of course, new developments are made in the solar industry daily, and there are many more community solar projects popping up across the country.
With that in mind, if you’re searching for “community solar near me,” then you have come to the right place. ChooseSolar is an excellent resource for all things community solar, and we can help you identify the closest solar opportunities at the absolute best rates available 5. Getting started is easy. Simply let us know your current utility provider, and we will find a way to pay less each month with a community solar opportunity.
Startup Costs For Choosing Community Solar
Unless you are a sole or shared owner of the equipment, community solar projects are generally free to participate in. This means that there is generally a total startup cost of $0 to begin saving money on electricity expenses with shared green energy. With that being said, entrance fees are not unheard of and some community solar farms ask for an initial investment or membership fee. Afterall, there are costs to maintain a power plant, no matter how easy it is to use.
Paying Your Electricity Bill with Community Solar
Whenever you sign up for community solar, paying your electric bill is actually a bit more like not paying your electricity bill. That’s because complete elimination of your current electric bill is the main reason most people choose to enroll in a community solar program. You read that correctly, if you sign up for a community solar program, there is a large chance that you will never receive a traditional utility bill again.
So how does it work? Well first, it’s important to understand that your electricity bill is now split into two parts: electricity consumption and electricity production. This means that for the first time, you are not solely using electricity from the grid, but also supplying electricity to the grid with solar panels. The energy that you purchase from a solar farm is “cashed in” as a renewable energy credit towards your household’s electricity bills.
The experience of paying your electricity bill with community solar can be summed up in five simple steps:
- You enroll in a program at no cost to you and continue to use your electricity as per usual in your household.
- A solar farm pays your utility bills using solar credits whenever electricity is generated and sent to the grid.
- You no longer have to pay your electric bills, but may be charged by your utility for outstanding, associated fees.
- The solar farm bills you for the amount of electricity that you have used at a predetermined rate.
- You enjoy guaranteed discounted utility bills until you cancel your subscription (which also may come at no cost to you).
With virtual net metering (VNM), as it is called, you will only receive a small bill from your utility if you use an amount of electricity greater than that of which was supplied from your portion of the solar farm. There also may be connection, transfer or maintenance fees charged by your utility. In agreements in which a community solar program always pays your entire electric utility balance, these variable costs can be eliminated.
Because community solar farms have a lot of control over the overhead costs associated with generating solar electricity, many can offer a discounted rate on supplying energy to individual participants. All in all, choosing to enroll in a community solar program near you is a great way to automatically lower the amount of money you spend on electricity, while choosing an alternative power source that has environmental benefits.
4https://www.energy.gov/sites/prod/files/2020/01/f70/Guide to Federal Tax Credit for Residential Solar PV.pdf