Switching to solar energy is a fantastic way to help the environment, save on your energy bills, and reduce carbon emissions.
However, if you can’t install solar panels or don’t want to, community solar is a great alternative. It’s especially helpful for renters and those who can’t install panels on their property.
But how does community solar work?
Well, it’s like a big solar power plant that supplies electricity to many homes, not just one. It’s called community solar because people in the same area share the power. You can buy a share of the project or subscribe to it, getting solar benefits without needing your own solar panels.
It’s different from other programs in the following aspects:
- Group purchasing – This allows many homes to buy their own solar systems together at a lower cost. Each home has its own panels.
- Green power – This is when you buy renewable energy from a utility. It’s often more expensive and doesn’t necessarily build new solar plants.
- Crowdfunding – You invest in new solar projects online, but you don’t get the electricity to lower your bill like in community solar. Also, the money you make might be taxed.
In other words, if you can’t do regular solar, community solar is a smart way to go green and save.
Which Community Solar Model Suits You Best
When it comes to community solar, there are two main models to choose from: subscription and ownership models. Let’s look at what each of them has to offer.
Subscription Model
Subscription-based community solar projects are widely used and preferred by many participants.
They typically have simple terms: you don’t need to pay any upfront fees to join, and you start saving on your electricity bill right away. Subscribing to a community solar project is similar to enrolling in a green power program.
However, instead of paying extra for clean energy, you often pay a lower rate for the electricity you use.
Participation requirements may vary based on where you live and your utility company. Some programs might require you to reside within a certain distance of the community solar project or within your utility’s service area.
Additionally, there could be limits on how much energy you can receive from the project, usually not exceeding 120 percent of your average monthly usage.
Ownership Model
Ownership-based community solar models function much like buying a rooftop solar panel system, although no physical system is installed on your property.
Instead, you become an owner of a specific quantity of panels within the larger array or a designated capacity (such as 5 kilowatts) from the entire solar project.
With this model, you can buy shares that match your yearly electricity consumption, but no more than that. The energy generated by the project will be reflected on your electricity bill as credits.
Community Solar Benefits
Community solar offers two main advantages for participants: it allows more people to access the benefits of solar power, and participants can lock in monthly savings on their electricity bills.
Moreover, even utility companies in the project’s areas benefit from community solar initiatives. However, it’s important to note that community solar subscribers won’t receive the same benefits as rooftop solar owners, like the solar income tax credit (ITC).
Community solar is made feasible through “virtual net metering” (VNM) policies. Similar to net metering for rooftop solar, virtual net metering lets households, businesses, or nonprofits obtain net metering credits from a remote renewable energy project.
Just as net metering enables you to use solar power generated on your roof to offset electricity drawn from the grid when the sun isn’t shining, it also enables you to use solar energy generated at a distant location to offset grid electricity consumption.
This results in community solar participants being able to reduce their monthly electricity costs, securing savings for the future.
Apart from assisting participants in saving on electricity costs, community solar has several benefits for electric utilities.
First, utilities can strategically place roofless solar gardens on the grid in areas with fewer generators. This helps stabilize the grid, ultimately saving utilities money and effort on expensive grid maintenance and repairs.
Second, community solar projects enable utilities to fulfill their state’s renewable portfolio standards. Community solar contributes renewable solar energy to the grid, which aligns with the increasing requirements for renewable energy percentages set by many states.
