What Is Community Solar & How it Does it Work? (Explained!)

What Is Community Solar & How it Does it Work?

Solar energy is on its way to becoming the most important source of renewable energy in the United States in the near future. According to a number of surveys, an increasing number of citizens in the United States are considering going solar. A further estimate by experts is that by 2024, there will be an average of one installation per minute in the country.

What do you think the future will hold for this trend? You probably notice thousands of solar installers scurrying across rooftops until every roof in the United States is adorned with solar panels, don’t you think? However, while this is largely correct, it is not entirely accurate because installing solar panels is not an option for everyone.

It is understandable that some people cannot or will not own a private solar panel system for a variety of reasons. However, this does not necessarily imply that they will be excluded from our future energy future based on renewable sources.

This is where community solar comes in; installations that allow you to reap the benefits of solar energy without having to purchase and install solar panels on your own property.

What is community solar?

A community solar project, according to the SEIA, is defined as “local solar facilities shared by a number of community subscribers who each receive a credit on their electric bills for their share of the power produced.” A solar project or purchasing program that benefits multiple customers within a geographic area, according to the United States Department of Energy, is considered a distributed solar energy system (DSS).

Simply put, a community solar program is a solar energy project that can be accessed by any homeowner or business owner within a specific geographic region. There is a solar farm involved, and participants are typically given ownership interests in the venture. This principle has the potential to completely alter the way people think about obtaining renewable energy from the sun.

According to the Solar Energy Industries Association, there are 40 states that have at least one operational community solar project. 22 of these states are actively attempting to encourage the growth of shared renewables by enacting favorable policies and implementing favorable programs.

Why is community solar necessary?

As previously stated, not everyone has the ability to install solar panels on their property. There are those who choose this path, and there are those who are forced to take this path by circumstance. This majority represents millions of people who are confronted with one or more of the following challenges:

They don’t own their homes

According to rental statistics, 44.1 million households (or 35.9 percent of all American households) rent their homes. You may also be familiar with the difficulties of adding an item to an existing structure if you have ever rented space. Unfortunately, that is precisely what has prevented the vast majority of renters in the United States from benefiting from solar energy.

They have unsuitable roofs

Solar Panels are not suitable for use on a flat roof made of tar and gravel or other similar materials. Some people own their homes, but they do not have a rooftop that is suitable for solar energy installations. According to statistics from the National Renewable Energy Laboratory, 50 percent of all American rooftops are shaded, do not face south, or do not have the minimum amount of roof space required for solar installation.

People who live in condominiums are faced with a situation that is similar to the previous one. You may be the owner of the house, but you are not entitled to any of the roof space. As a result, unless everyone decides that they want the same thing, installing solar panels is virtually impossible.

Financial reasons

Solar energy is often touted as the most cost-effective energy source available, but installing a home solar system isn’t the most inexpensive of projects by any means. In terms of installation costs, good solar systems cost an average of $12,000 to $15,000 up front, which is an amount that not everyone can afford.

Recognizing that solar as a viable energy solution does not preclude other options, proponents of solar as a renewable energy source proposed community solar as a way to circumvent these obstacles.

How does community solar work?

Solar farms are at the heart of community solar energy projects, providing the electricity they require. These farms are in charge of generating electricity, which is then distributed to the rest of the neighborhood. In order to make such projects financially viable, these farms must be developed and constructed in areas with sufficient sunlight to generate at least 1200kWh.

The solar energy produced is typically aggregated on a host meter, which allows the farm’s production to be tracked.

The size of community solar farms in the United States ranges from 350kW to 150 MW, with some as small as 350kW and others reaching 150 MW. Because one megawatt of solar energy could theoretically power around 160 homes, a typical community solar farm with capacity of 2,000kW could theoretically power up to 360 homes and businesses.

Electricity generated by community solar programs is then fed into the local power grid, allowing you to receive credits on your utility bills each month. Important to note is that you are not receiving all of the electricity generated by your solar panels on the farm. In other words, how does it all work? This is where remote net metering comes in.

What is remote net metering?

RNM, also known as virtual net metering (VNM), is a system that allows customers of community solar and wind energy farms to transfer the power generated by their solar and wind energy systems to the grid in exchange for credits on their monthly utility bills.

Solar energy is widely believed to save money by allowing people to replace some of their grid electricity with solar energy, which is incorrect. However, because it is physically impossible for community solar companies to deliver electricity from your solar farm to your home, you will continue to rely on grid electricity to meet all of your energy requirements.

You won’t have to be concerned about where your electricity comes from if you use RNM. When the solar farm’s output is directed to the grid, the relevant amount of credits generated is calculated based on your share of the total power produced by the solar farm. Because solar energy is less expensive than conventional energy, you can still benefit from its cost-saving advantages.

How do I Sign Up for Community Solar?

In the event that there is an active community solar program in your area, getting involved should be relatively simple. Some states allow you to sign up through your utility company, while others allow you to sign up through the internet.

To determine whether or not a subscriber is likely to pay their bill, community solar providers may also require a credit score from them. But as community solar providers work to expand their reach and attract more customers, this practice is becoming less common.

Additionally, many community solar programs have an upper limit on the amount of electricity that can be received by a single customer from their project. This amount is typically no more than 120 percent of a customer’s monthly usage amount.

Your local provider will be able to provide you with any additional information you may require about their program.

Community solar participation models

Those interested in participating in community solar projects can do so in one of the following ways:

Ownership

Participants purchase a portion of the solar project, which is typically represented by a specific number of solar panels. It is similar to purchasing a rooftop solar system, with the exception that there will be no panels installed on your home’s rooftop. You will receive electric bill credits at the end of each month that are proportional to the amount of power generated by the solar panels you own.

Customer purchase options are available from some community solar providers, who allow their customers to purchase an amount of kilowatts from a solar farm’s total capacity.

Subscription

In the subscription model, you do not have any ownership interests in anything. Instead, you pay a subscription fee to the community solar provider on a monthly basis. Consider it the “Netflix” of the solar energy industry. Although it appears to be expensive at first glance, you are actually only purchasing electricity at a lower price than you would normally pay to your utility company.

The subscription-based model is the most popular approach to community solar because of its convenience and the fact that there are virtually no upfront costs involved.

Benefits of community solar

There are numerous advantages to community solar, the most significant of which is the elimination of the need for inconvenient installations. Therefore, you are not required to own a home in order to benefit from solar energy. Renters account for a significant portion of the population in the United States, and community solar projects provide each one with the opportunity to benefit from solar energy. The same benefit is available to those who have roofs that are unsuitable for installation as well as those who live in condominiums.

In addition, there are no upfront costs associated with joining a community solar program. A significant portion of the American population does not have the financial means to invest $12,000 in a decent rooftop solar system. However, because of an ongoing project in their neighborhood, they are not required to do so. They should be able to get all of the solar energy they require through a monthly subscription.

Community solar is also a cost-effective way for American communities to achieve a certain level of energy independence. It also has a positive impact on the local economy because the solar industry in the United States provides employment for hundreds of thousands of people.

According to the Solar Energy Industries Association, there were approximately 231,474 solar workers in the country in 2020, which represented a 6.7 percent decrease from 2019. This demographic is expected to grow in the coming years as the industry recovers from the pandemic and the community solar market expands. Over 400,000 solar-related jobs are expected to be created by 2030, with over 900,000 jobs created within five years of that date.

Participants also benefit from the traditional solar energy benefits, such as lower utility bills and the ability to save money. By way of example, if they own a solar panel, their contribution to the project is deducted from their monthly electricity bill total. Instead of paying the same price as they would if they purchased electricity from their utility provider, subscribers pay a lower price.

The fact remains, as well, that solar energy is our most promising option for combating climate change. A vital role in providing solar energy to people who would otherwise not have had access to solar energy is unquestionably played by community solar projects. As more people become aware of the fact that they can obtain solar energy at a relatively lower cost, the demand for solar energy grows, and our reliance on fossil-fueled energy sources decreases.