Last Updated on December 31, 2022 by Mary Pressler
The Power of Community Solar
According to Energy.gov, “The U.S. Department of Energy defines community solar as any solar project or purchasing program, within a geographic area, in which the benefits of a solar project flow to multiple customers such as individuals, businesses, nonprofits, and other groups. In most cases, customers are benefitting from energy generated by solar panels at an off-site array.”
Solar panels can save thousands of dollars in power bills over time, and they can last for more than 25 years when you purchase high-quality brands. However, not all properties have a suitable area to install a solar photovoltaic system, and the following are some examples:
- Apartment owners or renters without access to a privately owned roof.
- Homes shaded by taller properties, where solar panels are not productive.
- High-rise buildings with a small roof area relative to their total floor area.
- Business owners renting commercial spaces, who have little incentive to install solar panels on a property owned by their landlord.
- Buildings with architectural features that make a solar installation impractical or impossible.
These are just a few examples where community solar power is a viable option. Instead of purchasing your own solar panels, you can subscribe to a shared solar project. The electricity production and savings from a community solar project are split among subscribers, which means they can save with solar panels without owning them directly.
Community solar projects are also known as solar gardens, and the US has over 1,600 projects of this type according to the Environmental Protection Agency. Shared renewable energy projects have been developed for residential users, commercial users, or a combination of both.
Which States Have Community Solar Power Laws?
According to the US Environmental Protection Agency (US EPA), there are 22 states with enabling legislation for community solar power:
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- Rhode Island
- South Carolina
*Washington DC has also enabled community solar power by law.
Community solar projects can also be found in states without enabling legislation, but only if local electricity providers and utility companies participate voluntarily. For example, Florida does not have community solar legislation, but more than 560 MW have been installed since 2018.
Community solar projects have been developed by many types of organizations. Many of them are owned directly by electric companies as a side business, while others are developed as private investments. Non-profit organizations have also used the community solar model to reduce electricity costs in challenged communities.
How Do I Claim the Savings From a Community Solar Project?
When you own solar panels, power bill savings happen directly. Each kilowatt-hour (kWh) generated by a photovoltaic system is a kWh you don’t have to purchase from retail electricity providers, and your power bill decreases. Some retailers offer solar buyback plans, which means they purchase surplus generation from solar panels that is not consumed right away.
On the other hand, community solar power offers indirect electricity savings. The process can be summarized in the following steps:
- You join a community solar project as an investor or subscriber, or by signing a lease.
- You are assigned a percentage of its electricity production, based on your ownership share or type of subscription.
- All the electricity generated by a community solar project is metered and exported to the grid, at a determined kilowatt-hour price.
- Your share of electricity production can be converted into a dollar value, and this amount is subtracted from your next power bill.
As a quick example, assume you have a 10% share in a community solar project that generated 10,000 kWh during a month, which means you are entitled to 1,000 kWh. If this electricity is priced at 10 cents/kWh, you get a $100 credit on your next power bill.
Community solar power also offers economies of scale: a single solar array with a capacity of 150 kW has a lower cost than 30 small-scale systems with a capacity of 5 kW each. According to the latest data from the Solar Energy Industries Association, small residential systems have an average price of $3.27 per watt, while commercial installations have an average price of $1.66 per watt.
Community solar power is an excellent option if you cannot purchase your own photovoltaic system for any reason. Just keep in mind that community solar projects must be enabled by law, which means they are not available in all states. However, local power companies can decide to participate in community solar voluntarily even if there is no dedicated legislation.
Since the solar panels are not installed on your home, this type of project also offers flexibility:
- You can move to another address and transfer the savings to your new power meter.
- You can end your subscription, or sell your ownership share to another user.
Community Solar Power in the US: 2021-2022
The Solar Market Insight Report is a quarterly publication by the Solar Energy Industries Association (SEIA) and global energy consulting firm Wood Mackenzie. They are constantly gathering industry data, and their SMI report provides key facts such as quarterly solar installations by market segment and average prices.
The SMI report includes figures about commercial solar installations by quarter, and the following table summarizes the data from the latest editions:
|Quarterly SMI Report||Community Solar Installations (US Total)|
|Q1 2021||131 MW|
|Q2 2021||177 MW|
|Q3 2021||180 MW|
|Q4 2021||355 MW|
|Q1 2022||197 MW|
|Q2 2022||228 MW|
|Q3 2022||212 MW|
As you can see in the table above, the US has installed 1,480 MW of community solar power since the start of 2021. New York is currently the leading state in community solar, representing 60% of the installation volume reported for Q3 2022. Other key markets include Maine, Massachusetts and Maryland.
Community Solar Power in Texas
Texas does not have enabling laws for community solar power, but there are several programs available from retail electricity providers (REP) and municipal utility companies. The following are some examples:
Additional programs may be available depending on your location. You can get in touch with your transmission and distribution utility (TDU) for information about electricity retailers who are currently offering community solar programs.
If community solar is not available in your location, a similar option is looking for a 100% renewable electricity plan. There are several electricity retailers who offer these plans in Texas. The Go Local Solar Plan from Green Mountain Energy is an example, where 100% of your electricity comes from local solar farms.