Community solar is a great way for people who otherwise might be unable to power their home or business with clean energy to do just that! If you’re interested in signing up for a community solar project, the first thing you’ll want to determine is if you’re a good fit. In this article, we’ll explain why community solar is a great choice for many people, and some situations in which you might not consider community solar.
Key takeaways
Community solar allows you to subscribe to large solar farms in your area.
Community solar can be a great option for renters and homeowners alike.
Community solar is available in 39 states – you can find a project near you using the EnergySage Community Solar Marketplace.
What’s in this article?
What is community solar?
Community solar is a program that allows utility customers to sign up for the power generated by large, local solar farms. Multiple properties can subscribe to any given community solar farm, including single-family homes, condos, apartment buildings, businesses, and more. In most cases community solar subscribers pay 5-15% less for electricity than the market rate in their area.
Subscribing to community solar is simply signing up to purchase a share of the net-metering credits the community solar farm is producing. Subscribers can apply those credits to their electric bills to offset their energy use. Typically, subscribers purchase the net-metering credits at a discount – around 5-10 percent, depending on the market. Think of it like buying a gift card for your electricity, but at a 10 percent discount so you pay $90 for $100 worth of electricity. We go further into the details of how community solar works in this article.
How does community solar work?
In states where community solar is available, solar developers build large solar farms, often large enough to power hundreds of homes. Those community solar farms generate renewable energy and distribute it to the grid, just like other electricity generators. Regulators and utilities measure that electricity in two ways: the actual electrons that are sent to the grid and something called net-metering credits. Net metering is an electricity billing tool that helps us track who is generating and who is paying for electricity on the grid.
Who should sign up for community solar?
The short answer: a lot of people! If you’re a renter, live in a multifamily home, are a business owner, or are unable to install solar on your property, you can (and should!) sign up for community solar.
It’s typically free to sign up for community solar, and some projects even have sign-up bonuses. Some areas have farms that are targeted toward low-to-moderate income customers, with discount rates as high as 25 percent. However, there are a few instances where you may not be a good fit for community solar, which we’ll explain below.
Questions to ask if you’re considering community solar
Before signing up for community solar, there are a few questions you should answer to determine if community solar is right for you:
Is community solar available in your area?
Because community solar is enabled by favorable policy, it’s not available everywhere. Currently, there are 39 states in the United States that have at least one community solar project. Unfortunately, that doesn’t mean there is necessarily one near you, or that shares are available. People are eager to take advantage of community solar savings, and projects fill up quickly where they are available. To dig a little deeper in the states where community solar is widely available, and where the markets are heating up, check out this article.
Using the EnergySage Community Solar Marketplace, you can search for community solar farms in your area, compare multiple options, and find the best option for your needs. If community solar is not readily available near you and you can’t find an open farm on EnergySage, you can sign up for updates in the Marketplace, and you’ll receive an email from us when there are options available near you!
Are you planning on moving soon?
If you’re planning on moving in the near future, you might want to hold off on signing up for community solar. Often, it can take some time for your subscription to be set up. Generally, there is a cancellation clause in community solar contracts that requires you to give as much as 90 days notice that you are canceling your subscription. Additionally, the real benefits of community solar are reflected over the course of an entire year, so you may not save as much as you would hope to if you were staying at the same address.
Do you pay your own electricity bill?
While community solar is an awesome option for renters to tap into clean energy, if you live in a property where your landlord or a building manager pays your electricity bill, you likely won’t be able to sign up for community solar. Community solar works by linking your subscription to your utility account, so if you don’t have an account, you can’t benefit from net metering credits.
Do you have a home solar system or can you install one?
If you own your home, you could potentially save significantly more money by installing your own solar system compared to subscribing to community solar. While rooftop solar systems may have a more significant upfront cost than community solar, you’ll see much greater savings over the lifetime of your solar system. There are numerous ways to cut down on that upfront cost, including the federal investment tax credit, which allows homeowners to deduct 30 percent of the cost of home solar installation from their taxes through 2032. This tax credit can be used in conjunction with other state and local incentives geared toward solar installation, further reducing the cost of installing solar on your home and increasing your savings.
While most home solar systems aim to cover 100 percent of your electricity needs, this is not always possible, and you might be interested in subscribing to community solar to cover that additional electricity. Community solar is still developing and expanding in most states where it is currently available, and as a result, there is not a clear answer on whether you can have home solar and subscribe to community solar in the majority of places it is available. Currently in Massachusetts, you are able to subscribe to community solar and have a home solar system at the same time, whereas in New York, you’re not.
Do you have a high enough credit score for projects near you?
Some community solar projects have a minimum credit score requirement to join the project (though this number is shrinking!). Typically, these minimums range from 600 – 700, depending on the project and the project’s investors. If you’re comparing your community solar options and your credit score may be a concern, be sure to pay attention to the different requirements of each project. There may still be a community solar option available to you even if your credit score falls below that minimum range because some projects do not require a minimum credit score.
In this article we cover key community solar companies to know, and whether their projects require a minimum credit score. This is a good place to start if you’re wondering what community solar projects you might qualify for in your area.
How much will your electricity bill savings be with community solar?
While it is important to know exactly how much you will end up saving with community solar, the cost of electricity is almost always lowered, even if it is just a small amount, when you sign up for community solar. Savings range, depending on your community solar billing structure and how much electricity costs in your area. With the EnergySage Marketplace, you can input your average electricity bill and get an estimate of your savings from community solar and check out which projects are available in your area.
Frequently asked questions about community solar
How much does community solar cost?
In most cases, participating in community solar will come at no cost – it’s free to sign up and most community solar providers offer a fixed discount on any energy you buy from the project.
Will I still receive power from my utility company?
Yes – signing up for community solar will not change your utility service. You’ll have the same utility, they will continue delivering your electricity with no interruption in service. With community solar, you simply subscribe to purchase net metering credits which can be applied to your electric utility bill.
How does community solar billing work?
As a community solar subscriber, you’ll likely receive two separate bills each month: one from your utility company and another from your community solar provider. Your community solar bill will include charges for the net metering credits generated from your share of the solar farm. Then, your community solar provider will coordinate with your utility company to apply your credits to your electric bill, reducing your overall cost. Learn more about how you’ll be billed for community solar.
Have more questions about community solar? We answer frequently asked questions here!
Get started with community solar today!
If you’re ready to find out how much you could save with community solar, use the EnergySage Community Solar Marketplace to get a quick community solar savings estimate, compare local options, and seamlessly subscribe to an open project in your area. Over 10 million people come to EnergySage each year to learn about, shop for and invest in solar. Compare your community solar options today to see how much you can save.
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