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What You Need to Know About Community Solar

Jessica PirroOctober 14, 20192410

Community solar panel installations are growing more and more popular. With the recent community solar energy projects being installed in New York and Florida, it is raising the question, what exactly is a community solar panel installation and how does it work?

What is Community Solar?

Community Solar is a solar-powered system that is going to provide power and/or financial benefit to multiple community members. The neighborhood programs allow property owners to enjoy the perks of solar energy without having a large initial investment. A collection of solar panels and other equipment that is going to be set up in a central location, so users aren’t going to need to install unsightly equipment on their properties. The hardware and produced power are owned by all members of the cooperative of any benefits that are equally shared among the group.

Those who participate in community solar panel installations are multi-family unit dwellers, small business owners, and rural residents, as well as traditional single-family property owners. Since all of the costs of solar are shared, the community solar-powered systems are making it easier for the low to middle-class families to participate in sources of renewable energy. Community solar panel installations are ideal for the properties where solar panel installations aren’t possible. Community solar panel installations projects are making sources of renewable energy more accessible to a wider range of people than ever before.  

The Purpose of Community Solar Panel Installations

With the environmental benefits of solar energy becoming more well-known in communities across the United States, more and more people are seeking sources of renewable energy. Regardless if they are aiming to increase their energy independence, protect themselves against the rising fuel costs, cut carbon emissions, or to provide local jobs, they are seeking out community-scale sources of renewable energy projects for solutions. There are many advances in solar power technology, an increase in federal and state tax incentives, and create new financing models that have made solar energy projects, which include community solar power projects, a better financial option.

Why Choose Community Solar?

Because community solar panel installations advocates are going to be driven by the recognition that the on-site solar energy market that is only comprised only one part of the total market of solar energy. Back in 2008, a study was done by the National Renewable Energy Laboratory that had found that a mere 22 to 27% of residential rooftops are suitable for solar-powered systems after adjusting for the structural, shading, or the ownership issues. Most of the community solar power options are going to be needed to expand the access to solar power for renters, those who have shaded roofs, and those who choose not to install a residential solar-powered system on their rooftops for financial reasons or other reasons.

However, a few more reasons that community solar energy is a good option:

- Improved economies of scale.

- Optimal project siting.

- Increased public understanding of solar energy.

- Generation of local jobs.

- Opportunity to test new models of marketing, project financing, and service delivery.

How Does Community Solar Work?

There are four different ways to organize community solar panel installations. Each method has unique benefits for participants.

- In utility-sponsored communities, utility companies own and operate the solar panels. The solar energy consumers can purchase or lease shares of that energy on their regular power bills. As nonrenewable resources become more expensive to acquire over time, community solar energy customers can realize significant savings.

- The on-bill crediting model lets energy consumers invest in a local facility. In exchange, they can receive credits to their monthly utility bills. It can appear as a reduced kilowatt-per-hour rate or a monetary credit.

- Special Purpose Entities are solar production projects sponsored by businesses, individuals and other companies can invest and share the benefits.

- Non-profit organizations create community solar energy in low-income and underserved areas. These solar energy programs often include job training initiatives that aim to improve the local economy. Private donors are funding these efforts.

Facts About Community Solar Panel Installations

- There are 40 states with at least one community solar energy project on-line, with 1,523 Megawatts of solar energy that is installed through 2018.

- There are at least 19 states and D.C. has recognized the benefits of sharing sources of renewable energy by encouraging growth through policy and programs.

- The next five years will see the U.S. community solar energy market add as much as 3.5 gigawatts. A single MW of solar power 190 homes; 3.5 GW will be able to power around 700,000 homes.

- At 30 MW, Citizen Energy’s community solar energy project with the Imperial Irrigation District is one of the largest low-income community solar energy projects in the United States and it benefits the low-income households in the Imperial and Coachella Valley.

Community solar energy projects might be located on the public or jointly-owned property, and can be an easier way for customers to benefit from a local solar energy project. A 2015 NREL and DOE report estimates that nearly 50% of consumers and business are unable to install solar-powered systems, but there’s a few reasons that community solar power might be preferred for a home, business, or individual like:

- Renters might be prohibited from installing solar panels on the property.

- The rooftop might be too shaded or will be needed to be re-roofed during the solar-powered system's warranty.

- The size, type, or orientation of the roof may not be ideal.

- Some of the commercial buildings have solar power equipment on the roof, obstructing a solar panel installation.

- Multi-tenant dwellings or businesses might not be on their rooftops.

- The customer isn’t able to afford the up-front cost of solar for a residential solar-powered system.

Are You Eligible for Community Solar Power?

If you are considering getting a solar panel installation there are a few ways to find a community solar energy project in your area.

- Find an active community solar energy project near you, remember eligibility is going to vary by program.

- Contact your local utility provider for information on sponsored communities.

- If there aren’t any communities in your area, you could organize one. The National Renewable Energy Laboratory publishes a guide that walks you through evaluating, planning, constructing, and operating a community solar energy project.

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