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Community Solar, Explained
Community solar is a great way to help reduce carbon emissions on the power grid, especially if you can’t install your own solar panels. It costs nothing for most people—in fact, it’s usually a monthly savings. You don’t need an electrician, and you don’t even need to switch energy providers.
If you’re interested in community solar, wondering how it works, and why there’s not more of it, we’ve done the research, talked to experts, and can break it down for you.
The best community solar option
Over the last month we interviewed renewable energy experts and spent dozens of hours researching the best community solar options on the market. Our pick for the best way to get signed up for community solar is Arcadia, a company that makes signing up for a local solar project feel as easy as ordering takeout.
Arcadia offers community solar in nine states, with more to come. The company pairs you with a local solar project, an easy way to help nudge your community toward more renewable power. Best of all, there aren’t any fees or contracts.
We’ll explain why we like Arcadia and don’t like other “green energy” providers like CleanChoice below. But first, let’s cover the basics of community solar.
What is community solar?
Community solar is, at the simplest level, any set of solar panels that offers up the power it generates to more than one person in the area.
The goal of community solar projects is to provide clean energy to homes that are currently ineligible for solar. To encourage them, 22 states have passed legislation that allows community solar projects to sell power to the grid at fair rates, and create easier billing for customers. Even without that help, community solar projects exist in 19 other states.
Subscribers of community solar pay into the project, either upfront or monthly, helping pay for its maintenance and other costs and balancing out its revenue across high and low generation months. In return, subscribers get a discount on their electric bill and help reduce carbon emissions on the power grid.
Community solar has grown 120 percent every year since 2010; it’s now in 39 states and the District of Columbia. The latest figures from the National Renewable Energy Laboratory (NREL) show 5.2 gigawatts of community solar available, enough for about 600,000 households. But there are 120 million powered homes in the U.S., and up to 85 percent of them may be unable to install solar panels, whether due to renting, roof conditions, or simply financing. So there’s still a big need for more community solar, and in more places.
How does community solar work?
It might sound like community solar sends power from a solar array straight to your home. While it would be neat to see a separate cable labeled “Clean Energy” plugged into your breaker box, that’s not how it works.
Put simply, and breezing past a bunch of variables and regulations, here’s what happens in an ideal setup:
- Solar energy is collected by a community project
- That energy is fed back to a utility company’s grid
- You, a subscriber, have your utility account credited for the amount generated for your share
- You either get a consolidated bill with a discount or, having paid upfront, get your credits separately
In a larger sense, community solar “works” because solar power, even when built with new equipment, is cheaper than generating power with fossil fuels. You get a discount because the economics of solar are so good.
For customers, especially in states with encouraging laws, it’s an easy way to save, usually a guaranteed amount, on electric costs. It also cleans up your power mix.
Where are community solar projects built?
Community solar projects are showing up in more places than you’d assume. Searching the news recently, I found community solar panels installed on vacant airport land in Florida , a capped landfill near Niagara Falls, and the roof of a FedEx facility in Washington, D.C. Many towns, businesses, and other landowners are looking at large, flat spaces and wondering if they might be better used generating power–and revenue.
The National Renewable Energy Laboratory counted more than 2,000 community solar projects in December 2021. The largest share of community solar power collection, by far, comes from Florida, with Minnesota, New York, and Massachusetts each producing about half of what the Sunshine State sends out.
How can I sign up for community solar?
The easiest path to community solar is getting a zero upfront cost solar subscription with a single, consolidated bill. Our favorite community solar provider is Arcadia.
While researching this guide, I signed up through Arcadia’s platform for a community solar subscription in Washington, D.C. (a place with solar-enabling legislation). I provided my address and utility provider, reviewed the terms (no contracts or cancellation fees, guaranteed savings), and authorized Arcadia to handle billing through my utility. I was on a waitlist for a couple weeks, but then got my spot on a nearby (Virginia) farm.
When my next month’s electric bill is due, Arcadia will handle the back-and-forth crediting between Pepco, the farm, and my share of it, then give me a 10% discount.
It’s not the kind of “meter running backwards” excitement that rooftop solar owners (occasionally) enjoy, but it still creates real carbon reductions and bill savings. No one gigantic home is using up all the power, and I get a financial incentive in even the grayest of months. And by signing up and participating, I am, hopefully, spurring further development in community solar.
What other options are there for community solar sign-up?
Arcadia is active in nine states as of this writing, with a few more due to come online soon. You can sign up for Arcadia’s waitlist even if there’s no community solar in your area; when a project opens up, you’ll have a place in line.
There are other companies connecting homes to community solar. Most projects involve either up-front costs or fixed monthly payments. And each of them requires that you look into their terms of subscription: contract length, cancellation periods, single or multiple bills, and other fees. Solar United Neighbors has a deeper guide for how to shop for community solar.
With that in mind, check out Solar United Neighbors’ search tool. You can see the offerings from major community solar providers in each area, including Nexamp, CleanChoice, Neighborhood Sun, and Arcadia, among others.
What’s the benefit of community solar for me?
For most community solar subscribers, the primary economic benefit is a potential discount on monthly electric bills of up to 10%. That’s far from the greatest benefit, but it is motivating.
Your solar discount has larger implications. For every megawatt of distributed solar power, a different megawatt that comes from coal, natural gas, burned waste, or other carbon-emitting sources is not needed—at least in theory. The more subscribers to solar power, the more power comes from renewable, non-emitting sources.
Does community solar make my home energy 100% renewable?
As noted earlier, the power from a community solar project isn’t traveling directly to your home. The power coming into your home and out of your outlets is from whatever mix of sources your electric utility chooses.
In my own case, my Washington, D.C. electricity comes from this mix of sources, as provided by Arcadia’s panel:
My community solar membership is putting green power into the grid, encouraging businesses and farms and communities to host their own money-making projects, and possibly encouraging more people to sign up, when I tell them about my 10% discount. But fossil fuels had to be burned to give me 58% of the power my home actually used. Changing that requires broader, more direct action.
Why isn’t community solar available everywhere?
To make community solar available everywhere, every state needs to not only allow community solar projects with legislation, but encourage their development with fair metering and pricing policies.
Even where community solar is enabled and encouraged, there are choke points. Arcadia’s Richard Caperton notes that in areas like Washington, D.C., New York City, and other built-out cities, finding usable space for community panels is difficult. Businesses, warehouses, parking lots, and other large roofs can host community solar, but need to be convinced of the benefits and ushered through the permits and build-out.
Connecting community solar to the grid is another challenge. Jenny Heeter, researcher at the National Renewable Energy Laboratory, notes that each project must request to be connected to the grid, then be approved, validated, and inspected. It could then have multiple changes imposed on it by a utility or other regulations, delaying the project.
As pointed out recently by John Oliver and Property Brother Jonathan Scott, among others, some utilities actively block any power-generating projects they didn’t build themselves. Utilities often function as an endorsed monopoly in their regions, with broad powers to manage energy production and pricing. Many argue that allowing customers to get cheaper solar power, whether from their roof or community projects, endangers their business model and could raise rates for non-solar customers. But the result of this opposition is less clean electricity and more carbon emissions.
What about CCAs?
Community choice solar, or CCAs, are not the same thing as a community solar subscription.
The major difference is that community choice usually involves automatic enrollment of everybody within a certain area to a solar project, authorized by local governments. By having a large base of default customers with years of service ahead, solar projects can negotiate competitive rates to provide their power. It’s opt-out and wide-scale, versus the opt-in nature of community choice projects.
Some community choice enrollments also involve renewable energy certificates, which we’ll explain next.
What about CleanChoice?
You may have received mailed advertisements for companies pitching you on “switching” your power to renewable energy. CleanChoice is a multi-state marketer for this service, and there are other regional companies.
As with community solar, your actual power still comes from your utility. What CleanChoice and others do is authorize themselves as your electric provider and sign you up for a fixed rate, usually higher than your utility provider. CleanChoice recently offered me a total 18.6 cents per kilowatt-hour rate for REC-backed power, a kind of climate offset. My local utility supply rate is about 8 cents/kWh, though it’s more like 13 cents/kWh after delivery and other fees.
CleanChoice’s mailed marketing for their energy-credit-based power plans can look a lot like important mail from your energy company.
We strongly recommend not signing up for CleanChoice though. While clean energy offsets are rooted in good intentions, the company has a history of questionable practices, including sudden rate hikes, confusing mail advertisements (like the one featured above), and, according to one environmental nonprofit, buying bad quality RECs.
CleanChoice also offers a community solar product, with a monthly bill discount similar to Arcadia. Looking into their Washington, D.C. offerings, though, the 5% discounts can be tied to lengthy commitments. We’d definitely recommend looking for other options.
What are RECs?
Companies like CleanChoice use your payments to buy, resell, and retire renewable energy certificates (RECs). Doing so is a kind of offset against the fossil fuel sources your electric company may be using to generate your power.
Roughly 7.5 million electric customers voluntarily paid for RECs to balance their power usage in 2020, according to the National Renewable Energy Laboratory. That’s about 5% of power customers nationwide, though a big chunk of those people are part of community choice opt-out programs (explained above).
REC-based utility offsets are a much-debated topic in renewable energy. Paying for a company to utilize and retire RECs against your power bill may encourage, or even force, the building and creation of more clean energy. Or REC subscriptions may send the wrong message, that renewable power is somehow inherently more expensive, a guilty add-on for those who can afford it.
Ultimately, if you have access to community solar, or you can work to make community solar available where you live, we think that’s a more direct path to cleaner energy, for you and your neighbors.