The community subscription contracts last 25 years. (This can be a stumbling block for prospective buyers, as the contract length is quite long.) Subscribers may save $5 or $10 a month the first year, but the amount grows substantially as the contract ages. Community solar advocates report subscribers saving as much as 10 percent.
The cost savings are a nice feature of community solar because as utility costs rise, subscribers can keep the increases flat by investing in community solar—kind of like a hedge against future price increases.
As utility bills increase, customers can see cost savings on their bills as their community solar contracts deliver more value.
In more rural parts of the state, cooperative-and-municipally owned electricity providers have opted, in some cases, to sell panels directly to customers. Though it’s a different model, utilities offering this option say they have seen solar gardens sell out in just a few months.
Minnesota today has more than 700 megawatts of community solar gardens, enough to power thousands of homes. The program has more than 10,000 subscribers, the majority of which are homeowners or people living in apartments. The biggest subscribers, however, take the largest amount of power. They include businesses, universities, and government agencies.
The community solar program has limitations. Buyers must choose a solar garden located in their county or an adjacent county. They can decide to buy 120 percent of the electricity they need, but no more. If subscribers move but stay in Xcel’s service territory, they can keep their subscriptions.
If they move out of Xcel’s area, garden operators have well-established policies that allow them to terminate contracts without expensive exit costs. Since community solar is so new, garden operators have extensive websites, as do some state agencies and organizations, to assist customers with issues that may arise.
With more experience than other states, Minnesota’s clean energy organizations offer plenty of tips to subscribers, universally applicable to community solar. Perhaps the best resource is Clean Energy Resource Teams (CERTS), which developed an extensive website devoted to helping consumers understand community solar.
Although the website focuses on Minnesota, much of the information is relevant to homeowners in any state considering community solar. Another great resource is the Residential Consumer Guide To Community Solar developed by SEIA (Solar Energy Industries Association®) and the Coalition for Community Solar Access.
Tips for Getting Started with Community Solar
1. Research before selecting a developer.
Look at developers’ track records and whether they have experience with solar installations and community solar gardens. Experience matters. Ask about their maintenance plan for solar gardens and if they have enough insurance to cover losses, as well as whether developers offer web portals where subscribers can see the power their subscription provides.
2. Understand finances.
Make sure you comprehend the financial implications of the community solar contract. Many contracts have automatic escalators that increase the amount subscribers slightly will be charged for electricity.
In Minnesota, Xcel has increased rates at 3.5 percent annually; if the escalator is below that number, and nearly all are, you will be saving money. Look for community solar pricing calculators sponsored by state agencies or nonprofits.
3. Ask lots of questions.
Inquire if you will receive updates about the project, if you can check periodically on how much the subscription produces, and whom you can contact with questions. Also, ask about what happens if the garden begins underperforming if a garden closes and gets sold.
Community solar gardens are among the most exciting innovations of the last decade for consumers interested in supporting clean energy and a more distributed generation of power. Though still in their infancy in many states, community solar programs have grown rapidly as more states and utilities offer it to residents and ratepayers.
So, community solar is worth checking out if you are a homeowner who cannot have your solar panels on your roof—whether it’s because of your roof orientation, too much shade, or some other reason.