Although solar energy has skyrocketed in popularity in recent years, many people aren’t in the position to install a rooftop solar system. Renters, apartment dwellers, condominium owners, low-income households, and people with shaded roofs are largely left out of the solar revolution.
Enter community solar farms. This ownership structure is making solar power available to households, businesses, and organizations that couldn’t access it before. It is a rapidly growing segment of the renewable energy market, especially in certain states. There are currently 4.9 gigawatts of installed capacity in the United States, or enough to power about 3.7 million homes.
What Is Community Solar?
Community solar projects give subscribers many of the same benefits of solar power without having a system on-site. They produce electricity for hundreds or even thousands of nearby homes and small businesses. Households and companies can join a community solar farm by subscribing to a portion of the project’s monthly output.
The solar power produced from the community solar project is typically discounted compared to typical utility company electricity rates. Consequently, subscribers can often lower their electricity bills while also helping the planet. Although the details vary by solar project, many require no upfront investment and offer flexibility if you move within the same electric utility territory.
How Does Membership Work?
To join a community solar farm, you sign a contract for a share of the energy produced or a certain amount of capacity. You’ll agree to pay a designated amount per kilowatt hour for solar energy, which is usually 5% to 15% less than the standard utility rate from the power company.
You’ll continue to receive electricity bills from the power company. However, you’ll see a new section on the bill with your community solar energy credits for your share of the solar project’s electricity output, reducing your power bill.
You’ll also receive a second monthly statement for your community solar subscription, but the two bills combined are usually less than the power bill would have been without the community solar subscription. Like a cable subscription, you can cancel the membership at any time with advanced notice.
Who Owns Community Solar Farms?
A third party owns most community solar projects and is also responsible for the maintenance and upkeep of the solar equipment. Participants pay an administrator for the solar electricity they consume, and the solar farm owner, not the members, is eligible for any solar incentives, such as the solar tax credit.
How Can I Join a Community Solar Farm
Where you live will largely dictate your options for becoming a member. Although community solar is not new, currently, only 22 states have passed the necessary legislation to make this ownership structure possible. Some states, such as Colorado, Massachusetts, Minnesota, and New York, likely have projects you can join, while other states lack the required policies. Several states have recently passed supportive legislation, but it takes a few years to finalize the rules and construct the first solar farms.
Want to join a community solar farm in your area? Find out about projects near you.
Originally published on April 10, 2018, this article was updated by Sarah Lozanova in August 2022.