Many homeowners would love to invest in solar energy, but their locations or pocketbooks may not support it.
Nearly half the homes in the United States cannot host solar installations due to poor sites, shaded cover, and lack of roof space. If they rent, they usually have no access to solar energy. Cost is another factor, with installations averaging $11,000 to $14,000 after tax credits.
However, for homeowners and renters who want to support clean energy, an emerging opportunity exists in community solar gardens.
California, Illinois, Minnesota, Massachusetts, New York, and New Jersey are the top states for community solar, though at least three dozen more have at least one garden.
It’s becoming big business. Solar Energy Industries Association, the nation’s leading organization promoting solar, says the market could grow to 3 gigawatts over the next few years. (For context, one gigawatt is one billion watts and is enough to power about 725,000 homes).
The demand, say, state officials, and solar developers, is driven by residents who want to support clean energy and have options to do that outside of putting solar panels on their rooftops.
In many states, it gives consumers a slight break on their bills. The reduction in bills grows over time, with a 10 percent drop in bills commonly reported. Community solar is one of the fastest-growing segments within the solar industry, with a growth rate twice that of general residential solar products.
So how does community solar work?
Residential (and business) customers can offset their electricity costs through subscriptions or by leasing panels from their utilities or from private developers who own the gardens. Nonprofit charitable organizations have also created solar gardens.
To support community solar, homeowners generally have two options. The most popular one offers people a subscription for a percentage of power they consume that they want to offset with solar energy. Utilities give those customers bill credits for their subscriptions.
Subscriptions require little to no upfront costs for customers unless they prefer the “pay upfront” choice of writing a check for the entire cost at one time. This method represents the easiest way for a homeowner to support solar without installing panels on their roofs.
Subscribers do not own panels; they lease them. The “renewable energy credits” associated with solar production are not transferred to subscribers either but instead are held by utilities operating the program—or solar developers who run the gardens.
The other method involves utilities creating gardens and selling individual panels to customers. Individuals can purchase one panel or several and receive bill credits for how much energy those panels produce annually.
Chances are there is a budding community solar garden somewhere in your state. Solar Energy Industries Association reports 43 states had at least one community solar garden in 2018. But not every state operates the same—they may have different legislation regarding community solar, and utilities provide the service in a wide variety of ways.
Minnesota has the largest solar garden program in the country. The state’s leading investor-owned utility, Xcel Energy, since 2013, has been required by law to allow private developers to build gardens. Xcel pays a slight premium for the power generated by community solar, while subscribers begin saving money almost immediately.
