How Does Community Solar Work?

Community solar is changing people's perceptions of how to obtain sustainable energy. Since the first community solar legislation was established in the United States, at least one community solar installation has been implemented in 43 different states. Education is a vital component of the community involvement process as its popularity grows and more households and businesses become eligible to use renewable energy to save money by harnessing the power of the sun.

Even if you don't have the time or money to install a solar array, community solar is an exciting and cost-effective option to get sustainable energy. We've spoken with thousands of people in the community, and they all ask the same question: "How does it work?"

What is community solar?

A community solar project is a large central solar power plant that provides electricity to more than one property. While household installations are measured in kilowatts, community solar projects are measured in megawatts, which means that one such project may power many households. Roofless solar, solar gardens, and shared solar are all terms used to describe community solar.

Participating in a community solar project is an excellent option for renters and those who live in shared housing because you don't need a suitable rooftop to participate in solar electricity. Everyone may profit from solar power while paying less for energy by acquiring a share of or subscribing to a community solar project.

What community solar is not?

Community solar is comparable to, and sometimes misunderstood for, other types of renewable energy power rates and incentives, such as:

It’s not Group Purchasing: Group purchasing agreements enable a large number of families or companies to acquire their own individual solar systems at bulk pricing through negotiating with a solar installation provider. In contrast to community solar projects, in which all members profit from a single central system, each participant in a group purchasing scheme purchases their own individual solar projects.

Green Power: Green power costs enable utility customers to purchase electricity generated by renewable energy sources, primarily large-scale hydro, wind, and solar. Those that enroll in green power programs do so to 'do the right thing,' rather than to save money on their power bills because these solutions frequently come at a cost premium. Furthermore, participating in a green power plan does not always need the construction of new renewable power plants, since electricity can be generated from existing facilities. Most community solar projects, on the other hand, are designed to save members money on their energy costs.

It’s not crowd funding: Some businesses have made renewable energy investing more accessible through online platforms that allow you to invest in new solar systems. These are solely investment initiatives: you do not receive power from any of these projects to offset your bill. It should be noted that the earnings from these projects are often taxed (as investments), but the savings from a community solar project are not.

How does community solar work?

When you sign up for a community solar farm, you may choose to either get power from a particular number of the array's panels or buy a set amount of electricity at a reduced price from your regular utility rate.

Programs and initiatives for community solar often come in one of two forms:

Ownership: The community solar project's whole cost or a specific number of panels can be purchased by participants under this arrangement. You will receive credits or discounts on your energy bill for the whole amount of power generated by the solar panels you own when you invest in a community solar project.

Subscription: With this concept, people may sign up as subscribers to receive monthly power bill discounts. You are only acquiring power at a cheaper price than you would pay to purchase electricity from your utility, as opposed to owning panels or a stake in the project.

What are the benefits of community solar?

Community solar projects have two main advantages for participants: first, they enable more people to utilize solar power's advantages; and, second, they allow participants to lock in monthly electricity bill savings. Community solar even has advantages for the utility companies with projects in their regions!

Financial Benefits

Virtual net metering, as the name implies, enables you to use solar energy generated at a remote location to offset electricity you pull from the grid in the same way that net metering enables you to use the solar energy produced on your roof to offset any electricity you pull from the grid when the sun isn't shining.

As a result of virtual net metering, community solar users are able to lower their monthly power costs and lock in savings for years to come.

Utility Benefits

There are a few ways community solar helps electric utilities in addition to program members who save money on power.

In places with fewer linked generators, utilities can strategically place roofless solar gardens on the grid. Overall grid stability is improved as a result, which ultimately saves the utility time and money on expensive grid maintenance and repairs.

Second, community solar farms provide a means for utilities to comply with any renewable portfolio regulations that their state may have put in place. Community solar is a form of sustainable solar energy that may be used on the grid, which is becoming more and more commonplace in some locations.

How do Community Solar Payments work?

The company that oversees subscriptions for the community solar system, the subscriber organization, is paid by you. This charge can be paid in full now or over time.

Your utility provider receives information from the subscriber group on the monthly power production of your community solar share. They determine what to credit to your power bill using that information.

The credit amount varies depending on the state and occasionally the utility provider. Usually, it is multiplied by how many kilowatt hours (kWh) your portion of the community solar system produces.

Your electricity company and your community solar group will often send you two bills each month.

The good news is that two bills are less than one. You should pay less with community solar than you do with your existing power bill. Be mindful as this varies by utility location and supplier!

You will notice a charge on your utility account for the power you used from the utility, less the amount of credits you receive from your community solar share.

How Much Of Your Energy Will Now Be Produced By Solar?

You should be informed by your community solar provider of how much of your electricity will now come from solar. You may check one of your recent power bills to see how much electricity you consume on a monthly or yearly basis.

In general, you should not subscribe to a community solar share that exceeds 100 percent of your overall energy use. Any energy purchased in excess of 100 percent may be returned to you by the energy provider at the end of the year, but at a lesser cost than you paid for it.

It is worth noting that the regulations governing this differ by state and, in certain cases, by the utility provider.

Is Community Solar Worth it?

Everyone in a community may benefit from solar power thanks to community solar: tenants, owners, local companies, institutions, non-profits, government buildings, and practically anybody with an electrical bill. It benefits the environment, saves money, and strengthens the grid. It's a win-win situation for everyone.

The only significant disadvantage is a lack of availability. This, thankfully, is changing. Demand for this service will rise as more shared solar facilities are developed and more consumers benefit from the cheaper prices they provide. This, in turn, lowers the cost of building new projects, triggering a virtuous cycle that will compound itself.

The beauty of community solar is that it brings together so many different organizations, all of which stand to gain.

The utility will be able to operate a more efficient system as it approaches its renewable energy objective. Cities and towns strengthen their economies by creating jobs and reducing their dependency on filthy fuel sources. Subscriptions from businesses may help both renewables and their bottom line. Homeowners and renters may support and participate in the renewable energy transition while saving money on their utility costs in a straightforward manner. The more each group buys in, the more at ease they will be with this fascinating new paradigm, and the greater the benefit for everybody.