By Forrest Watkins
Our customers are right to ask: just what is community solar? It may seem like a simple question, but the term covers a range of different offerings, and it’s important that you understand your options before you sign a contract.
At the most fundamental level, community solar involves a shared solar installation that customers can tap into, offsetting their energy usage with renewable sources and receiving savings on their electricity bill. This allows people whose roofs are unsuitable for solar panels--too shady, too old, or the wrong orientation/angle--and people who own condos or apartments to access clean energy.
Where are community solar farms located?
We’ve all seen solar panels going up on rooftops, and many of us have seen pictures of utility solar farms that go on for miles. Community solar farms generally fall somewhere in the middle. Many community energy installations are built on capped landfills, open fields, or the roofs of warehouses, supplying energy to the electricity grid and allowing nearby residents to finally take part in the solar revolution.
What makes community solar possible?
Community solar takes advantage of rules similar to the ones that give energy savings to households with rooftop solar panels. “Net metering” allows people who produce their own solar energy to sell that energy back into the grid. For every watt they produce, their utility will give them a credit that they can use to pay for their future energy use. (You can think of this as “running back the meter”).
For community solar, utilities use a process called virtual net metering, which means that when your community solar farm produces energy, you get the credit on your utility bill, as if you had produced it on your own roof.
Ownership or Subscription?
Generally speaking, there are two types of community solar. In the ownership model, you buy or lease part of a solar farm for an upfront fee. Every month after you sign your contract, you’ll see a credit on your utility bill for the energy that the panels generate--allowing you to earn back your investment over the life of the contract. Owning the panels may also make you eligible for federal tax credits and state incentives.
This model provides solar access for many new customers, but there are many more people who don’t have the savings to afford such a significant upfront cost. That’s why we have a soft spot in our hearts for the second kind of community solar.
The Subscription Model
Under this option, the customer pays no upfront fee at all and instead receives their solar electricity as a monthly service. We help them sign up for enough panels to cover their energy use, and then they can enjoy their discounted solar electricity. As with the ownership model, participants see a credit on their utility bill for the energy that their panels generate. Customer savings vary depending on the geography and solar developer, but they usually range from 5 to 15 percent.
Because there’s no upfront cost, this kind of contract allows new communities to access solar energy. And at Solstice, we’re pushing that boundary even further. Most community solar companies require a 20-year contract and a 700 FICO credit score to sign on to these community solar contracts, but we want to change that. By offering shorter contracts and finding better ways to qualify people for our projects, we hope to bring community solar savings to renters, young people and low-income communities--to those who need those savings most.
Every day at Solstice, we meet more people who are interested in going solar. We encourage everyone to do their own research and find out what’s best for them and their families, whether it’s putting panels on their roof or enrolling in a community solar farm.