What Is Community Solar and What Are the Benefits?

Most environmentally-minded homeowners understand that renewable energies are a necessary, essential, and urgent part of building a sustainable future. Rooftop solar panels are one of the most practical and cost-effective ways of transitioning away from fossil-fuel energy sources for our home. The average cost of installed solar panels in 2019 is below $3.00 per watt, which is a historic milestone. This price represents a 90 percent drop in just over a decade, and that price is only expected to drop further in the coming years.

The 30 percent residential renewable energy tax credit is unfortunately set to expire in a couple of years. However, many experts expect that further government subsidies for a transition to clean and renewable energies will be inevitable. These subsidies will be likely once fossil fuels become gradually more expensive and harder to extract.

Despite this fact, there are hundreds of thousands of homeowners across the country who aren´t able to install rooftop solar panels. Financial difficulties affect millions of homeowners who would like to introduce renewable energy options. We have written here and here about innovative finance programs that can help homeowners find the financial freedom to make sustainable upgrades to their homes.

However, even with the financial ability to pay for rooftop solar panel installation, many homeowners face challenges and obstacles that make this renewable energy option impossible. Community solar programs are one way that homeowners and renters can access the financial benefits of solar energy while also reducing their residential carbon footprint.

By Tobias Roberts, Rise Writer

13 min read

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Who Cannot Put Solar Panels on their Roof?

There are around 172.4 billion square feet of residential roofing space available across the country. With the advent of solar roof shingles, it might be tempting to think that simply switching out our asphalt shingles for mini-solar panels is an easy way to reduce residential greenhouse gas emissions.

Unfortunately, studies have shown that only about 8 billion square meters (or 86 billion square feet) are suitable for solar panel installation. Another study is less optimistic about solar panels for residential roofs. A 2008 study by the National Renewable Energy Laboratory found that only between 22 to 27 percent of residential rooftops are suitable for placing rooftop solar panels. This statistic presents a severe challenge for the sustained growth of solar energy.

Though it can be hard to calculate, most experts agree that optimum residential roof space for solar panels could potentially provide up to 40 percent of the total electricity demand in the United States. Forty percent of our energy needs powered by renewable energy freely given by the sun doesn’t sound bad. However, this figure also shows that more than half of all residential roofs are unsuitable for solar panel installation.

One of the inherent flaws in solar panels is that they are one of the most inefficient renewable energy technologies. Even the best solar panels will only be able to convert about 20 percent of the sun´s energy into usable electricity for homes. Shading, improper angling, the structural integrity of the existing roofs, and orientation of roofs and unsuitable roofing materials are just some of the many drawbacks that could significantly reduce the potential for rooftop solar installation. Homeowners can get around these challenges through proper planning. Building a solar-ready house will allow you to install solar panels without major renovations when your budget allows.

project sunroof — Photo Credit: Project Sunroof

If your neighbor’s giant oak tree shades your roof for three-quarters of the day, you might be one of the millions of homeowners who cannot take advantage of solar energy. To get a better idea of your solar power possibilities, Project Sunroof powered by Google is one helpful (and free) online calculator that can help you determine how much solar energy your roof could potentially generate. It is also worth mentioning that the 43 million Americans who rent the homes and apartments they live in have little control over what type of energy their homes use.

What is Community Solar?

Community solar projects are solar power plants whose renewable energy production is shared by more than one household. Also known as solar gardens, these projects exist in several different designs. For example, a neighborhood or homeowners association might decide to share the cost of purchasing and installing a solar panel system. This purchase might be a cheaper and more emission-free energy source for their community. The community might have hired an energy advisor who suggested that locating a mid-sized solar plant on a sun-soaked, south-facing empty lot owned by the neighborhood would be much more efficient than installing individual solar panel systems on every home.

In other cases, a third-party business could install a large photovoltaic plant. This company then distributes renewable energy to a community that owns shares in the generation of this clean electricity.

In most cases, community solar projects will connect to the municipal grid. However, rural communities could undoubtedly create their micro-grids connected to a battery storage system. In grid-connected projects, individual homeowners or renters purchase shares or stakes in a community solar project. Once they buy these shares, the subscribers will receive a monthly credit on their electricity bill. Depending on how many shares you purchase, the credit might completely offset the cost of energy that they consume. For homeowners with less income, however, they can choose to only offset a particular part of their energy consumption through the number of shares that they purchase.

The monthly savings on your energy bill will often offset the cost of buying into the community solar project. Homeowners can buy into a solar energy production plant without having to invest $30,000 in a private, rooftop solar panel system.

One of the biggest challenges that the widespread deployment of community solar projects faces is legislation related to virtual net metering laws. According to the Solar Energy Industries Association, “net metering is a billing mechanism that credits solar energy system owners for the electricity they add to the grid.” Net metering laws are necessary for community solar projects to thrive.

Benefits of Community Solar Projects

The most apparent benefit of community solar projects is that they allow a broader segment of the population to take advantage of the economic and sustainability benefits of solar energy. People who do not own homes that are suitable for rooftop solar panels and those who don’t have the financial stability to take bankroll a private PV system are a perfect fit for community solar projects.

Also, one of the defining aspects of community solar projects is that the costs of the projects are shared and spread by a group of people. Community solar projects are a proven strategy to lower the cost of access to renewable energy for low-income households. They can also help in the construction of a more resilient electric grid centered on renewable energy sources.

For example, in a community ownership model, members will purchase the solar panels outright. A group of 20 neighbors who buy a 100 kW solar panel system for installation on the roof of a community center in their neighborhood would most likely benefit from wholesale costs. Economies of scale are almost always cheaper upfront. The total price for a more extensive solar panel system should be lower than if each household installed a system on its own.

In cases where homeowners are not able to pay for their share upfront in cash, financing their share with a solar loan might also be a possibility. With the ownership model, it must be clearly described the amount of electricity that your share will produce. Transparent accounting will help members determine the estimated payback time for their share and also calculate expected monthly savings on their utility bills.

Community solar projects can also help us transition away from centralized grids that are vulnerable to some of the challenges we may face in the future defined by global climate change. There certainly might be a place for large-scale solar projects owned, operated, and distributed by huge energy conglomerates. However, many experts believe that a transition to a more decentralized grid is necessary for a sustainable future, and is a part of resilient homesteads.

The rise of community solar as an option for renewable energy production could allow millions of households across the country to benefit from access to solar energy. While there are still a few logistical hurdles and obstacles, community solar should only continue to grow in the coming years and decades.