Community solar lets you plug into cheaper electricity without a roof

Clean electricity for less money seems a bit too good to be true. But it reflects a new reality: Solar energy prices are falling as private and public money, and new laws, are fueling a massive expansion of small-scale community solar projects.

Finding a subscription to one, however, can feel like trying to score Taylor Swift tickets: They’re on sale, but only a lucky few can buy them. At least 22 states have passed legislation encouraging independent community solar projects, but developers are just beginning to expand. Most existing projects are booked.

At the moment, community solar projects in the United States generate enough electricity to power about 918,000 homes — less than 1 percent of total households, according to the Solar Energy Industries Association, a nonprofit trade group.

But as more states join, and the Environmental Protection Agency’s “Solar for All” program pours billions into federal solar power grants, more Americans will get the chance.

Should you take it? I took a look.

While projects exist in most states, they are highly concentrated: More than half are in Massachusetts, Minnesota and New York. These might be on a condo roof, or on open land like the 10-MW Fresno community solar farm, on a city-owned plot surrounded by agricultural land. Most are small: 2 megawatts of capacity on average, about enough to power 200 to 400 homes.

Developers tend to finance their projects through investors or banks, and sign up customers during construction. If there are projects in your utility’s service area, you can subscribe to electricity generated by a certain share of the project’s solar panels.

The electrons that ultimately flow into your home aren’t necessarily from your panel. They are fed into the local grid, which powers households throughout your service area. Most allow subscribers to start or cancel their solar subscription at any time, or sometimes with a few months’ notice. The renewable energy marketplace EnergySage and the nonprofit Solar United Neighbors connect customers to community solar projects in their region.

People generally receive monthly credits for electricity produced by their share of solar panels. These are subtracted from their total electricity bill or credited on future bills. If customers produce more than they consume, those credits roll over. If they produce less, customers pay the difference. Subscribers on average save about 10 percent on their utility bill (the range is 5 percent to 15 percent).

These economics are propelling the industry to record heights. Between 2016 and 2019, community solar capacity more than quadrupled to 1.4 gigawatts. By the end of this year, energy research firm Wood Mackenzie estimates, there will be 6 GW of community solar. And the Energy Department wants to see community solar reach 5 million households by 2025.

“The economics are strongly on the side of doing this,” says Dan Kammen, an energy professor at the University of California at Berkeley. “It’s now cheaper to build new solar than to operate old fossil [fuel plants]. … We’re at the takeoff point.”

Community solar, also called “solar for renters,” is for anyone. But if you’re a homeowner, it won’t maximize your savings.

On average, savings from community solar amount to about $100 per year for the average ratepayer. Rooftop solar arrays may save homeowners more than $1,000 annually, estimates EnergySage.

But it brings other advantages. It’s a subscription you can walk away from at any time with no upfront investment. And your fixed rate or discount off prevailing electric rates is usually locked in for at least a decade. Residential electricity rates, meanwhile, have jumped about 17 percent since 2018.

The biggest benefit may be expanding access to clean energy to the roughly half of U.S. consumers and businesses not able to install their own solar panels. “The great promise of community solar is it allows everyone to be part of the energy transition,” says Brandon Smithwood of Dimension Renewable Energy, a company that has financed more than 1,000 MW of solar projects, “and not feel they’re being left behind.”

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