Does your state have community solar? Find out here

What if you want to go solar, but you live in an apartment? Or you can’t afford the high upfront cost of solar panels? There may be an option — if you live in the right place.

Community solar is a model where you purchase electricity and then subscribe to power generated by a large solar panel farm or a solar farm at another location within your utility’s service area.

Utilities often initiate community solar projects, but in some regions they may be managed by a third party. States that require that a portion of their energy mix come from locally produced community solar also tend to have more programs.

The federal government also provided funding for programs in the Inflation Reduction Act, and there is a strong push underway to make it easier for low- and middle-income households to take advantage of initiatives that will lower their monthly energy bills. Recently, $7 billion in federal grants were awarded to establish Solar for All programs nationwide. While it will take time for recipients to use the funds, the promised result should include programs in all 50 states and several U.S. territories, including Puerto Rico and Guam.

Some utility-initiated community solar programs can actually increase your energy bill, but that just goes to show that not all solar plans are created equal. It’s always important to look into who’s running your local program and how much it could cost you.

The Estimates from the Solar Energy Industries Association 6.5 gigawatts of community solar were installed in the U.S. through the first quarter of 2024. These projects are spread across 41 states and Washington, D.C., with 19 states and D.C. implementing official policies and programs to encourage increased community solar. SEIA expects the gigawatts produced by community solar to double over the next five years.

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What is community solar energy?

Daniella Gray, director of customer relations at Altus Power, which develops and operates community solar projects across the country, said this often takes the form of hundreds or thousands of panels in a parking lot, a polluted “vacant lot“terrain or a warehouse roof.

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“Every situation is a little bit different, depending on who we’re working with,” she explained. “Maybe someone has a little bit of extra roof space that they’re not using for anything else and it’s a good candidate for solar.”

Altus could then lease that roof space and sell the power to subscribers in the community.

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“The panels are connected to the local grid… and the clean energy that is generated goes directly into the grid, so the community really benefits from having more clean energy,” Gray said.

Subscribers benefit from the programs because the renewable energy generated is cheaper, thanks in part to subsidies and incentives from local, state and federal governments.

Community Solar Energy By State

A number of states have passed laws that allow for community solar programs and force utilities to integrate them into their energy mix. Other states have gone further, requiring a certain amount of community solar to be installed by set deadlines, while others provide financing for projects.

Interestingly, much of the community solar development has occurred in states like Florida that have not yet passed legislation, where utilities and energy cooperatives have taken the initiative themselves. Here’s a look at where projects have been completed as of December 2023, the most recent figures available. Information on mandates and incentives is cited from the Ministry of EnergyThe sector has grown rapidly over the past two years, so it’s likely that many of these numbers have changed.

States planning to implement community solar energy

The community solar landscape is growing and changing rapidly. New Mexico and Hawaii are among the most recent states to enact community solar legislation and are likely to climb the chart above in the coming years.

Most states without community solar laws have at least introduced some sort of legislation in their statehouses. Community solar bills have been introduced in recent years in Michigan, Wisconsin, Pennsylvania, and Montana.

Alaska Governor Mike Dunleavy signed legislation that enables communal solar energy in August, making the largest state the last to approve the programs.

The 60 grantees funded by the federal government’s Solar for All initiative will also build out community solar across the U.S. There are 49 state-level grantees and five multi-state grantees that will provide varying levels of coverage across the country.

“Many of the 60 selected Solar for All applicants have already begun supporting low-income and underserved communities through innovative programs that are already bringing clean, affordable solar energy to homes,” said EPA Deputy Administrator Janet McCabe. “With this new funding, Solar for All-selected applicants will be able to launch thousands more projects like these in every state and territory across the country.”

How to Participate in a Community Solar Program

Gray says getting involved in community solar is as simple as contacting a provider to see if they work with your local utility. If the answer is yes, you’ll just need to provide your utility account information. The final steps are signing a contract and arranging for payments if the community solar program doesn’t already consolidate billing with your utility.

Brandon Smithwood, senior policy director at Dimension Renewable Energy, a community solar company, said many electric cooperatives were early adopters of community solar, while investor-owned utilities have typically been required by state law to implement similar programs.

“Only a minority of people can actually put solar panels on their roof, but for everyone else, community solar is an option,” he said.

In most cases, community solar credits will simply show up on your monthly utility bill, acting as a monthly rebate or refund. Sometimes subscribers will have to pay monthly bills from both their utility and their community solar program, but the credits will still be applied to their utility bill, resulting in a net savings.

EnergySage offers a tool which allows you to search for community solar programs by zip code.

“This is something that is available to a relatively small number of Americans and is going to become a much more common consumer product,” Smithwood said. “It’s a way to do good and do good at the same time.”

Pros and cons of community solar energy

Community solar can be conceptually difficult to understand if you are new to the topic, but participating in programs is easy. Still, there are a few things to consider before you sign up.

Advantages

• Community solar energy replaces fossil fuels from the energy mix, resulting in cleaner air and lower CO2 emissions.
• Programs are designed to reduce energy bills and specifically benefit low- and middle-income families. (See below for an important exception.)
• This is a way to benefit from solar energy if you are a renter or in a situation where you cannot install solar panels yourself.
• Community solar developers lease land for a substantial amount, which provides farmers (and other property owners) with a source of income. “This is the way to keep the farm as a farm and keep it in the family,” Smithwood explained.

Disadvantages

• According to Gray, people often think community solar is a scam because it seems to lower their energy bills and be good for the environment without costing them anything.
• In some regions, particularly in the South, monopoly utilities are offering community solar, but the prices are not favorable. “So far, the way they’ve priced it has been more of a premium product,” said Jill Kysor of the Southern Environmental Law Center.
• Billing can be confusing when there is no consolidated billing and people have to worry about paying two bills related to their electricity usage.

Frequently Asked Questions About Community Solar Energy