How does Community Solar work? | SaveOnEnergy®

Community Solar Basics

Everything you need to know about community solar projects

home with solar panels on the roof

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  • Community solar helps customers save on electricity bills and reduce their carbon footprint
  • More and more states and utilities in the U.S. are supporting community solar programs
  • Joining, transferring, or canceling a community solar subscription is easy and flexible

Solar energy is on the rise nationwide. The cost of residential solar panels has fallen by 90% in recent years, making solar energy more affordable for homeowners. California, Texas, North Carolina, and Florida are leading the country in solar power generation. Solar power is also growing in other states. 

Many consumers are not ready to invest in solar despite increasing residential solar adoption and decreasing solar panel costs. That’s where community solar – also called shared solar – can be a solution. Growing in popularity in the U.S., community solar programs offer an affordable alternative to buying a solar system. As of 2021, 22 states and Washington, D.C., have policies supporting community solar. These policies require solar project developers and utilities to adhere to certain rules to enroll customers and build community solar farms. But states without supportive government policies also have community solar programs. Typically, utilities develop and oversee community solar projects in those states.

Steps to join community solar with®

Community solar projects are ideal for consumers who want to use solar energy but cannot own solar panels for financial or other reasons. In recent years, community solar companies removed barriers to encourage solar adoption. Arcadia is the largest manager of residential community solar programs in the U.S. it requires no credit check or long-term contract to join a shared solar subscription near you. If you are interested in switching to solar power for your home, here is an easy step-by-step process to sign up for community solar through Arcadia.

  • Step 1: Check the availability of community solar in your area by entering your ZIP code and utility provider through Arcadia.
  • Step 2: Establish your Arcadia account with your utility login details and payment information.

After you join, Arcadia begins to apply energy-saving credits you earn from participating in community solar to your utility bill.

What is community solar?

Community solar is any large solar project in a specific area that provides energy to numerous customers. The Solar Energy Industries Association describes community solar as “local solar facilities shared by multiple community subscribers who receive credit on their electricity bills for their share of the power produced.” 

“Through community solar programs, electricity customers purchase or subscribe to a portion of a large solar array, typically located within the customer’s utility service area,” said Katherine Searcy, engineer and project manager at Cation Consultants. “The utility then assigns credits directly on the customer’s bill.”

Community solar allows residential homes and businesses to share solar power generated from a single, centralized solar farm. This way, consumers can enjoy the benefits of solar power without having to pay the upfront cost of owning solar panels. 

Households that can benefit most from community solar include:

  • Renters who do not own their homes
  • Homeowners with an old or shaded roof
  • Energy consumers who cannot afford the upfront cost of purchasing home solar panels

How does community solar work?

  • Many, but not all, community solar programs require a credit check before you can join. Typically, the qualifying credit score is 600 and up. A creditor usually pulls a soft credit check for community solar.
  • If you meet the credit requirements, you can subscribe to a share of a community solar program. 
  • Once the subscription is activated, you begin receiving your electricity through the community solar program, no matter the season, and will get energy credits on your electric bill. 
  • Usually, community solar participants receive a 5-10% discount on their monthly electricity bills.

Get an exact quote from our solar advisors

The SaveOnEnergy marketplace helps you search, compare, sign up and save on the right energy fit for your home — all for free. If you’re interested in solar, answer a few questions to get an exact price quote from our solar advisors.

1. Complete the form below
2. Schedule an appointment with a solar advisor
3. Get an exact price quote for solar panels for your home

Benefits of community solar

Consumers can enjoy several benefits of participating in community solar. 

  • Lower Financial savings. The main advantage of community solar is affordable access to solar energy and savings on your monthly electric bill without owning solar panels. 
  • Great for renters. Because community solar farms are located offsite, they are ideal for renters or multifamily residences. You do not have to make structural changes to your home when joining a shared solar project. If you move, it is often easier to transfer a community solar subscription to a new address than it is to move with a solar lease. Community solar programs can also be better for homeowners with small, old, and run down roofs. The location of a home in a shaded area can be an additional barrier to installing solar panels. 
  • Energy savings. Like other solar options, community solar projects can lower your energy costs. The amount you will save each month with solar depends on your home’s energy usage, but many customers experience lower electric bills by subscribing to a shared solar program.
  • Lower carbon footprint. In addition to savings on utility bills, community solar also helps consumers lower their carbon footprint. Solar energy is a renewable power source, meaning it does not emit greenhouse gases — like carbon dioxide or methane — into the atmosphere. By investing in solar energy, you can reduce your environmental impact.
  • Reliable. Because community solar farms are located in large spaces with maximum sun exposure, they can provide continuous and reliable energy to customers and ensure savings on monthly electricity bills.

Two main community solar models

There are two main pricing models for consumers to access and use community solar: 

  • Subscription model. Under this model, you enter a power purchase agreement (PPA) with a third-party provider of community solar and receive credits on your regular electricity bill for the clean energy you use. A PPA subscription has several pricing options, including discounts on a local utility rate, a fixed rate per kilowatt of consumed electricity, lease-to-own contracts, and a fixed monthly fee. A detailed pricing option available to a customer appears in the agreement. Subscribers to a community solar program cannot receive financial benefits, such as net metering and tax credits, under the subscription model because they do not own the solar system.
  • Cooperative model. In this, a group of people collectively finance a community solar project installation on a specific site. Participants in the cooperative model pay for a solar system upfront with cash payments or solar loans. They own and use the system together. They are also responsible for its maintenance. Owners of a community solar system receive net metering benefits and tax credits relative to their share of investment in the shared solar project.

Community solar FAQs

Why should I participate in community solar? Expand / Collapse Toggle

Community solar helps you save money on your electricity bill by providing less costly energy than the typical utility. 

Will community solar fully meet my electricity needs? Expand / Collapse Toggle

Yes, it can cover your entire electricity use.

If I rent, can I participate in community solar? Expand / Collapse Toggle

Yes. Community solar is perfect for those who do not have an opportunity to purchase or don’t want to own solar panels.

What do I need to do with my community solar subscription if I move? Expand / Collapse Toggle

If you move to a place that is part of the community solar service area, you can transfer solar credits to your new home. If you move outside the service area, you can pass your credits to someone else or end your subscription. Check with your community solar provider for details.

Will I be able to get tax credits and rebates if I subscribe to community solar? Expand / Collapse Toggle

No, you will not be able to get tax credits and rebates. Only owners of solar systems are eligible to receive such benefits.

What is the community solar subscription cancellation process? Expand / Collapse Toggle

The cancellation process is typically easy. Usually, there is no cost involved in canceling your subscription. But there may be a required minimum termination notice. You can find details on the subscription cancelation process in your agreement.

How can I avoid a community solar scam? Expand / Collapse Toggle

Check the websites of your utility and state and local governments for details on a community solar program in your area. Community solar is not yet available everywhere. If shared solar is available near you, researching community solar companies in your area and their legitimacy is an important step to avoiding community solar scams. A great source of general information on community solar in the U.S. is the Department of Energy.