Community Solar: Renewable Energy for All
Most people can agree that solar energy is a great way to generate emission-free electricity. but unfortunately, personal solar panel installations are not always a viable option.
For example, residential solar panels must be installed by homeowners, so renters are often out of luck.
Likewise, those that live in an apartment building or on a heavily shaded property lined with large trees may not have enough usable roof space for a cost-effective solar energy system.
That’s where community solar comes in.
At Solar Us Shop, we love all forms of solar, from handheld devices to massive utility-scale arrays. In this article, we’ll take a closer look at how community solar works in order to help more people connect with renewable energy all over the United States.
What is community solar?
The Solar Energy Industries of America (SEIA) defines community solar as “local solar facilities shared by multiple community subscribers who receive credit on their electricity bills for their share of the power produced.”
Essentially, community solar projects allow electricity consumers to adopt renewable energy without having to purchase a system or install solar panels on their own property. With this, access to solar is expanded to renters, low-income customers, and anyone else that is able to participate in a local project.
Regionally, community solar projects may be referred to as “community solar gardens,” “community solar farms,” “shared solar installations,” as well as many other nicknames.
How does community solar work?
Community solar farms work by generating massive amounts of renewable energy in one location and crediting the production to off-site customers, thereby reducing their monthly utility electricity bills. A typical community solar farm will operate with one of two business models: ownership or power purchase agreements (PPA).
Under a solar ownership agreement, participants will “purchase” a physical piece of the solar farm – usually a handful of solar panels for residential customers. With this, the customer then “owns” any electricity that the panels produce throughout their lifetime and all of the solar energy that is generated will be credited to their electric bills.
In a power purchase agreement (PPA), customers buy the electricity that a solar farm produces, rather than the actual panels. Within PPAs, participants can purchase electricity at reduced rates compared to utility prices, while locked into contracts of various lengths. PPAs can typically be signed with little to no money upfront.
…Okay, but what’s the catch with community solar?
While we can’t speak for every solar farm in the country, by and large, there is no “catch” with community solar. As the cheapest form of new electricity, solar energy is helping millions of people around the world reduce their energy costs and carbon footprint. With community solar, consumers can access solar energy without having to make a large investment or adjust the way they use electricity at home.
Where is community solar available?
Community solar projects are available in nearly every state, with the exception of Wyoming, the Dakotas, Mississippi, West Virginia, and a handful of other areas. Although somewhat scarce in many parts of the country, there is a high concentration of community solar projects currently operating in Massachusetts, New York, Minnesota, Colorado, Washington, and the Carolinas.
Find a Community Solar Project Near You!
To find a community solar project near you, we recommend checking the National Renewable Energy Laboratory’s updated list of community solar projects across the United States.
If there is not a community solar project near you, there might be one soon! In fact, the SEIA predicts that more than 4.3 gigawatts of community solar energy will be installed in the United States over the next five years. To put it in perspective, that’s enough energy to power over 3 million homes!
Starting a Community Solar Project
If you’d like to start a community solar project of your own, that is a very commendable effort. Whether you represent a non-profit organization or are literally “in it for the money,” community solar projects are critical for easy access to renewable energy in the United States and all over the world.
How do community solar farms make money?
Community solar farms make money by signing up subscribers and selling the panels or electricity produced onsite. While utility-scale solar gardens may only have one buyer (hint, hint – it’s the utility company), solar farm owners can sell their services to homeowners, businesses, government agencies, and anyone else who uses electricity.
Whether using a “solar ownership” or purchase power agreement (PPA) model, solar farms can begin attracting customers at any point from pre-installation to years into the project’s lifespan. As a relatively low-maintenance operation, solar farms typically begin to make money once all of their initial costs have been recouped by customer cash flows.
How to get started
To get started on a community solar project, you’ll need a lot more than just positive thinking. Community solar projects are massive investments that produce significant amounts of electricity for decades, with an average starting cost of around $1 million.
This capital is designed to cover expenses for the property, land development, solar energy system parts, labor, and more. Thankfully, community solar projects qualify developers for many green energy tax incentives and rebates to reduce the upfront costs.
Beyond what is always available at the federal and local levels, developers should be on the lookout for unique incentives like the Solar in Your Community Challenge, a 2019 $5 million competition designed to develop new solar capacity across the United States.
Solar farms are typically a few acres in size and must be located close enough to customers so that the electricity can reach its end-users without significant energy loss. Popping up in creative locations around the world, solar gardens can be installed on farmland, above parking lots, and even on bodies of water with a “floatovoltaic” system.
Before you begin looking for investors, we strongly recommend that you contact your local utility and government to learn more about whether or not a community solar farm can be installed in your area. Without having to spearhead the project yourself, it may also be easier for you to get involved with a community solar project that is already in development.
At the end of the day, we believe that all solar energy is good solar energy. While a personal rooftop solar panel installation may be able to save your home or business the most money on long-term electrical costs, shared community solar farms are absolutely essential for public access to renewable energy, and participation within one can help reduce your electricity costs instantly.