How does Community Solar fit into our community?
According to the National Renewable Energy Laboratory (NREL), about 80% of energy consumers are unable to utilize rooftop solar because they have old roofs, shaded roofs, insufficient roof space, or because they do not own their homes. But community solar changes that. With community solar, EVERYONE has the power to choose solar energy as their source of power – regardless of homeownership or roof quality.
Community Solar Basics
Today, many American households and businesses do not have access to solar because they rent, live in multi-tenant buildings, have roofs that are unable to host a solar system, or experience some other mitigating factor.
Community solar provides homeowners, renters, and businesses equal access to the economic and environmental benefits of solar energy generation regardless of the physical attributes or ownership of their home or business.
Community solar expands access to solar for all, including in particular low-to-moderate income customers most impacted by a lack of access, all while building a stronger, distributed, and more resilient electric grid.
Community solar refers to local solar facilities shared by multiple community subscribers who receive credit on their electricity bills for their share of the power produced. This model for solar is being rapidly adopted nationwide.
Financial Benefits of Community Solar
Virtual Net Metering
VNM allows a household or business to receive the Net Metering credits associated with a renewable energy project with which they do not share an electricity meter. For example, if the participant’s share of the plant produces 5kWh of electricity on a given day, they will receive 5kWh of solar Net Metering credits on their power bill.
Tax Incentives and RECs
The ability to benefit from federal and state government incentives—including Federal Investment Tax Credit (ITC). Tax credits incentivize companies to finance the development of the plant & they also lower the cost of installing a system, ultimately making the electricity the solar PV system generates more affordable.
A report on the future of community solar by the Massachusetts Department of Energy Resources (DOER) suggests that other programs may supplant VNM as state Net Metering quotas are filled and alternative models become more common.
Why choose Community Solar?
Community Solar projects may be located on public or jointly-owned property, and can be an easier way for customers to benefit from a local solar energy project. A 2015 NREL and DOE report estimates that nearly 50% of consumers and businesses are unable to host photovoltaic (PV) systems, but there are many reasons why community solar might be preferred for a home, business, or individual. Here are a few examples:
Renters may be prohibited from installing solar on the property
The roof may be too shaded or will need re-roofing during the solar warranty period
The size, type, or orientation of the roof may be improper
Some commercial buildings have equipment on the roof, obstructing an installation
Multi-tenant dwellings or businesses may not own their rooftop
A homeowner is planning to move in the near to mid future
The customer is not able to afford a residential system
This model allows participants to own some of the panels or a share in the project. They get to benefit from all the power produced by their share of the solar panels or the system.
When projects are ownership-based, participants can either purchase their panels up-front or finance them through a loan provided by the project developer or their own bank. In this way, ownership-based community solar models are very similar to purchasing a rooftop system—except, of course, that no system will be installed on the participant’s roof or property.
This model allows participants to become subscribers and pay a lower price for the electricity sourced from the community solar farm. They do not own the panels—they just buy the power at a reduced rate.
In subscription-based community solar programs, participation is more fluid: A third party or a utility will develop and own the project (sometimes investing in it with the aim of taking advantage of associated tax credits) and extend an opportunity to the public to participate. The project will generally be administered by the utility, which will manage participant enrollments and billing.
Altruistic Community Solar (non-profit model)
Although most community solar projects aim to save participants money, there may also be cases in which environmental or social outcomes are the main goal. For example, a community may sponsor a solar array for a church or other public building. In such cases, the church or public building will not only save money on their energy bills, but also meet their environmental and/or local economic growth objectives.