The Benefits of Community Solar
Nationally, almost seventy percent of the population can’t have rooftop solar, either because they rent, they can’t afford it, or their roof is not suitable for solar because of location or tree cover.
Community solar allows multiple customers, or “subscribers,” to purchase the output from a single solar panel array. Customers who can’t install solar on their own property can access solar power from a community solar installation. Whether they rent rather than own their home, can’t install panels on their roof, or can’t afford the cost of installing solar, they can still participate in community solar.
Community-owned community solar projects are owned, built, and used by you and other members of your community. These solar arrays are controlled by your local community, and both the financial returns and the clean electricity are local. Although community solar can be utilized without being locally-owned, research shows that the jobs created and financial benefits that flow to communities are substantially higher when community solar projects are locally-owned.
Once your project is up and running, the electricity from your solar installation flows to the grid, and subscribers to your community solar project get a credit on their utility bill equal to the amount of electricity produced by their solar array. This system is called virtual net metering. Your community has control: you decide how the solar project will be run and who will have access.
Societal Benefits
Historically, the way energy systems have been run has reinforced and exacerbated inequality, both economic and racial. Middle income households across the country spend about 2.3% of their income on energy costs, but households at twice the federal poverty level (or below) spend closer to 8.1%. Nationally, Black households spend 43% more, Hispanic households spend 20% more, and Native American households spend 45% more of their income on energy bills than white households.
Community-owned community solar promotes a more equitable, decentralized, clean energy transition. Communities can produce electricity rather than purchasing it from large utilities. Community-owned community solar also supports local economies, promotes energy independence, and strengthens the power grid. It’s an equitable clean energy solution that promotes environmental justice. Low-income or marginalized communities are often sites for industrial facilities that may pollute or release hazardous waste; a solar farm won’t poison the air or leak toxic substances while providing power to nearby residents.
Barriers to Community Solar
Starting a community-owned community solar project can be difficult and time consuming. Communities must define themselves, assess their resources, and learn about the regulatory and policy environment that will affect the process before even beginning a project.
Community solar projects typically involve high upfront costs, including not just the physical panels and infrastructure, but also numerous additional costs, such as permitting, legal, and technical support, as well as the costs for land, labor, and more. A lack of access to funding is the biggest roadblock to community-owned community solar, particularly for low- to moderate-income communities.
Some community-owned community solar projects overcome this barrier through what’s called a partnership flip model. This requires finding an investor who will provide the initial funding, and will own the majority of the project (and receive the tax benefits). After a contracted period of time, ownership “flips” to the community, giving them the option to buy out the primary investor.
It may also be possible to raise the capital for a project through a combination of loans, grants, and other fundraising efforts from within and outside the community.
Non-profits, houses of worship, and other community institutions can be ideal hosts for community solar if they own land that can accommodate large arrays. They would then serve as the entity that buys the majority of the electricity produced by the community solar array. This gives them a financial return on their investment, while also providing electricity credits to the members of their community
As the climate gets more unpredictable, and power demands continue to rise, community-owned community solar projects can provide reliability for their community while strengthening grid stability as a whole.
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