The Pros and Cons of Community Solar

There’s a lot of people who are interested in getting a solar panel installation, but they can’t install solar panels on their property. But there is another option; community solar.

What is Community Solar?

Community solar panel installations or shared solar is when the solar power that your solar panels are generating from a local solar power system or facility is shared by members in the community. The solar power systems are normally built on public or jointly owned land, and solar power is made available to the community members through two models: ownership or subscription.

Community solar ownership is when the community member buys a portion of solar panels on the solar power system. The amount of solar panels is going to depend on the owner’s annual energy usage, covering up to 100% of their annual energy usage. With community solar panel installations you can still get the SRECs and also be a barrier of the entry for homeowners that can’t afford the upfront cost of solar panels.

Like with most energy choices, there are both pros and cons when it comes to community solar panel installations. Listed below are the most common pros and cons of community solar power systems.

The Pros of Community Solar Power Systems

Much like rooftop solar panel installations, there are a lot of different benefits when it comes to community solar panel installations. Here are some of the more popular pros.

You Can Save on Electricity Bills With Community Solar

One of the biggest advantages when it comes to community solar power systems is the associated electricity bill savings. The amount of money that you can save when it comes to community solar varies depending on several factors, including but is not limited to:

- The pricing model of the program you participate in.

- Your current electricity rates.

- The cost of your community solar purchase or subscription.

- The amount of solar power you get from the community solar power systems.

Most community solar participants can save anywhere from 5 to 15 percent off of their typical electricity bills. But, some community solar programs could be more expensive than your current electricity bill, it’s going to be vital to evaluate both expected monthly bills and long-term savings as you decide if you want to join a community solar program.

Community Solar Options are Flexible

One of the major roadblocks in widespread community solar adoption was the structure of the programs and contracts. A lot of community solar programs include long-term contracts with hefty cancellation fees, making it quite difficult for some customers to commit and making the cancellation process hard and costly. Today community solar companies are frequently opening new programs that are going to remove these barriers, allowing customers to opt into shorter-term contracts or simplifying the process of canceling or transferring their community solar power contracts.

Cons of Community Solar Panel Installations

Community solar power systems might not be the best option for everyone; here are some of the more popular cons when it comes to community solar panels.

Community Solar Customers Can’t Get Solar Incentives

Most people who invest in a community solar panel installation project are going to do so under a subscription model; with this pricing model, you aren’t going to own any solar panels at the farm, but instead, you will pay for the electricity that is generated at the community solar power project at a rate that is much lower than the price you are paying your utility company. Most solar incentives are only going to be available to people who purchase and own a solar power system; with a community solar panel installation subscription, because you don’t own any part of the solar farm, you are not eligible for solar incentives like tax credits or rebates, as your community solar company or developer is taking advantages of those solar incentives themselves.

The exception to this rule is if you’re participating in a community solar ownership model, this means you buy and own a specific share of a community solar farm. This sort of program is a little less common than the subscription programs, those who participate in an ownership type is going to be less common than subscription programs, those who participate in an ownership program might eligible for federal and/or state-specific solar incentives, but it isn’t going to be guaranteed.

Community Solar isn’t Available in Every State

Community solar is becoming more popular each day, but it isn’t available in every state: and since September 2019, there are only 19 states in the United States that currently have active community solar policies, but the number is growing each year.

If you want to build a state’s community solar market, local governments need to pass legislation that enables customers to take advantage of solar power that is remotely generated. Most states with community solar power projects are offering virtual net metering benefits, but there are many other forms of remote solar power credit in multiple states.

How Does Community Solar Compare to a Home Solar Panel Installation at Your Home?

There are a few options that are available if community solar doesn’t fit your goals and objectives. Those options include solar ownership or leasing a solar power system.

Solar ownership is when the complete upfront cost of the solar power system paid for by the property owner. The property owner is going to take full ownership of the solar power system after the installation is complete, which includes maintenance and repairs. But, the owner will also own all of the financial solar incentives, such as the Federal ITC and cost reductions.

Leasing solar panels are when a third party installs a solar power system on your property without any upfront cost to the property owner. The property owner will then buy the electricity from the solar power system for a price that is already agreed upon. All of the tax benefits would belong to the company that owns the solar power system.