Save money and get clean energy with community solar

Community solar, explained

Field in front of forest with solar panels

Community solar is a great way to help reduce carbon emissions on the power grid, especially if you can’t install your own solar panels. It costs nothing for most people—in fact, it’s usually a monthly savings. You don’t need an electrician, and in many cases, you don’t even need to switch energy providers.

If you’re interested in community solar and wondering how it works, we’ve done the research and talked to experts to break it down for you. 

Let’s start with the basics.

What is community solar?

Community solar is, at the simplest level, a solar farm that provides clean energy to the local grid. Renters and homeowners subscribe to a particular solar farm and in return receive monthly credits for their share of the solar farm production. A percent discount is often applied to the credits to create a financial incentive for signing up.

How does community solar work?

It might sound like community solar sends power from a solar array straight to your home. While it would be neat to see a separate cable labeled “clean energy” plugged into your breaker box, that’s not exactly how it works.

Put simply, and breezing past a bunch of variables and regulations, here’s what happens in an ideal setup:

  • The community solar farm generates power from the sun. 

  • That energy is fed back to a utility company’s local electric grid.

  • You, a solar subscriber and utility customer, have your utility account credited for the amount generated for your share.

  • You either get a consolidated bill with a discount or, if you paid upfront, get your credits separately.

The sun goes to the community solar farm, which then feeds into a local utility electric grid. This electricity then powers home home and the household gets a discounted bill or credit.

In a larger sense, community solar “works” because solar power is much cheaper than generating power with fossil fuels. Community solar can give you a discount on your electricity because the economics of solar are just that good. For customers, especially in states with encouraging laws, it’s an easy way to save — usually a guaranteed percentage of the power your share of the project generated — on electric costs. It also cleans up your power mix.

How can I sign up for community solar?

Here’s a search tool from EnergySage to help you find a community solar project near you.

The easiest path to community solar is getting a zero-upfront-cost solar subscription with a single, consolidated bill. That might sound complicated, but we’re here to help keep it simple. Basically, you want a subscription that doesn’t cost anything before you start using the power and (ideally) adds the credit to your regular utility bill.

Signing up for community solar might look something like this:

  • First, you’ll pick a company that provides access to community solar projects in your region—such as Ampion, Arcadia, Common Energy, Neighborhood Sun, or Nexamp, to name just a few. If none have any immediate openings, you can typically sign up for their waitlist to hold your spot in line.

  • Once it’s time to enroll, you’ll give the company information like your address and utility provider, review the terms of the agreement, and authorize them to handle billing through your utility. (After that, you might have to wait a little while to get a spot at a nearby community solar project.)

  • When your next monthly electric bill is due, your community solar provider will work out the credits and then give you a discount on your electricity. The exact number will depend on the provider you choose, but many promise discounts of between 5 and 15 percent.

  • In some cases, the community solar company you’ve chosen will be able to work with your utility to send you one consolidated bill at the end of the month. If that’s not possible, you’ll probably receive two bills: the normal one from your utility and another from your community solar provider. In this case, your utility bill will be low, usually just your fixed charges, taxes, etc. Your community solar bill will include the amount of power your allocation generated, minus the bill credits, to result in your new statement. 

Every community solar subscription requires a financial transaction either in the form of a consolidated bill or dual billing (receiving bills from both your utility company and your solar provider). Each of them requires that you look into their terms of subscription, including contract length, cancellation periods, single or multiple bills, and other fees. Make sure you know whether you’re signing on with a provider that lets you pay monthly and cancel anytime, or one that requires you to invest money right away or sign a long-term contract.

There are plenty of guides out there that can help walk you through the subscription process, like this one from Solar United Neighbors.

Subscribing to community solar may not be quite as exciting as getting your own rooftop solar and watching the meter start running backwards (sometimes literally). But it still creates real carbon reductions and savings on your electric bill, even in the grayest of months. Plus, you know those benefits are being shared by many of your neighbors and likely spurring further development in renewable energy.

What’s the benefit of community solar for me?

For most community solar subscribers, the primary economic upside is receiving a discount on the energy that is allocated to your home from the solar farm, typically in the form of 5 to 15 percent off the solar energy price. But in addition to saving you some money, your solar subscription will do some serious good for the environment.

For every megawatt of distributed solar power, a different megawatt that would’ve come from coal, natural gas, burned waste, or other carbon-emitting sources won’t be needed—at least in theory. The more people subscribe to community solar, the more electricity will come from renewable, non-emitting sources.

Ultimately, if you live in an apartment, you rent a home, or you’re a homeowner who isn’t eligible for rooftop solar, community solar is the easiest way to support clean energy on your local grid and receive a discount on your utility bill in the process. And by signing up for community solar and demonstrating demand in your region, you are directly supporting the case for more solar development in the future.

How does community solar differ by state?

The goal of community solar projects is to provide clean energy to homes that are currently ineligible for solar. At least 22 states and Washington, D.C. have passed legislation that regulates community solar to ensure that subscribers (the households that enroll to receive clean energy) are properly credited for their participation. But even without that help, community solar projects also exist in at least 19 other states. However, consumer protection and program rules often differ greatly in non-regulated markets.

In regulated community solar markets, subscribers are allocated a portion of the community solar farm panels based on their annual energy usage. The solar farm then generates power that is sent back to the grid and the subscriber receives a monthly bill credit based on the production value of their solar farm allocation. There is no upfront cost associated, and the bill credits help reduce your overall monthly utility bill. Your utility bills may fluctuate due to increased usage or other lifestyle choices, but you are guaranteed savings from your portion of the solar farm production monthly. 

In non-regulated community solar markets, subscribers may pay an upfront cost to help subsidize the build-out of the solar farm. This resembles a traditional rooftop solar model where you realize savings once your initial investment has been recouped. 

The total amount of community solar more than doubled each year from 2010 until 2021, when the National Renewable Energy Laboratory (NREL) found that there were 5.2 gigawatts of community solar available—enough for about 600,000 households. But there are over 120 million homes in the U.S., and some of them may be unable to install solar panels, whether due to renting, roof conditions, or simply financing. So there’s still a big need for more community solar in more places.

Rewiring America is the leading electrification nonprofit working to electrify our homes, businesses, and communities.

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