Community Solar Projects Bring Renewable Energy to the Masses
The National Renewable Energy Laboratory (NREL) explains that community solar, also known as shared solar or solar gardens, is a distributed solar energy deployment model that allows customers to buy or lease part of a larger, off-site shared solar photovoltaic (PV) system. It says community solar arrangements allow customers to enjoy advantages of solar energy without having to install their own solar energy system.
The U.S. Department of Energy says community solar customers typically subscribe to—or in some cases own—a portion of the energy generated by a solar array, and receive an electric bill credit for electricity generated by their share of the community solar system. It suggests community solar can be a great option for people who are unable to install solar panels on their roofs because they are renters, or because their roofs or electrical systems aren’t suited to solar.
The Solar Energy Industries Association (SEIA) reports 6.5 GW of community solar capacity has been installed in the U.S. through the 1st quarter of 2024. Furthermore, SEIA predicts more than 6 GW of community solar capacity will be added over the next five years. It says 41 states, plus the District of Columbia, have at least one community solar project online.
“These programs are very attractive and provide a lot of benefit to a whole range of consumers,” Nate Owen, CEO and founder of Ampion, said as a guest on The POWER Podcast. Ampion currently manages distributed generation projects for developers in nine states, with new states being added as more programs become active.
“It’s fundamentally a different way of developing energy assets,” Owen said. “These things [community solar farms] are their own asset class. They produce a very significant value because they are generally located closer to load, and so, they fortify and strengthen local distribution networks quite a bit. And right now, they are very popular—there’s quite a bit of development going on in states across the country that have put programs in place.”
Owen specifically mentioned Colorado, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Jersey, and New York as states with active community solar programs. “There’s a lot of activity going on in a lot of states right now,” he said.
According to Owen, community solar saves customers money. “The contract structure of community solar means that, ultimately, everybody’s guaranteed savings,” he said. “Nearly every community solar contract we’ve ever done has been provided at a percent off the value of the utility bill credit. So, at its essence, we are selling dollars’ worth of utility bill credits for 90 cents, and so, you automatically save money.”
Contract terms often vary from project to project and state to state. “I think residential customers these days are generally signing contracts that are at least a year, if not three or five in some cases,” explained Owen. He noted that some states, such as Maine and New York, have a statutory 90-day termination notice clause for residential customers, so it doesn’t really matter how long the term is because subscribers have the right to terminate deals when they choose. In such cases, Owen said the “replaceability feature” of community solar is vital to success. “We can drop a customer and replace them—and we do,” he said.
To hear the full interview with Owen, which contains more about the benefits of community solar, what state Owen thinks has the best community solar program, details on financing projects, and how a project typically progresses from start to finish, listen to The POWER Podcast. Click on the SoundCloud player below to listen in your browser now or use the following links to reach the show page on your favorite podcast platform:
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—Aaron Larson is POWER’s executive editor (@AaronL_Power, @POWERmagazine).