When you think about solar panels, you probably have one of two images in mind: one is of the half dozen or more panels on your neighbor’s roof, and the other is of a big field in the desert with panels laid out in all directions.
Community solar is a middle-ground approach, a different model, featuring solar arrays that provide energy savings for subscribers. According to the terms of state regulations authorizing these programs, many of those subscribers have incomes that would make it harder for them to put solar panels on their roofs — or live in apartments where they are unable to install panels altogether.
Traditional rooftop solar is “primarily for people who can afford it,” Nate Owen, CEO of Ampion, a community solar software company, told CNET. “That leaves a huge amount of the United States that cannot do that.”
At the moment, you can’t access community solar everywhere. Your state needs to have passed legislation enabling this new twist on the energy model, and enough facilities need to be around you that you can subscribe without ending up on a lengthy waitlist.
Can solar panels save you money?
Interested in understanding the impact solar can have on your home? Enter some basic information below, and we’ll instantly provide a free estimate of your energy savings.
The community solar industry is growing, with total capacity in the US expected to increase from about 6 gigawatts in 2023 to 14 GW by 2028, according to an analysis by the consulting firm Wood Mackenzie.
Here’s where community solar is headed.
Community solar is entering new states
The typical energy model is one where your utility company either generates or buys energy from somebody and then charges you a set rate for it. Some states have deregulated energy markets, in which you get to choose your supplier, although your utility company is still the one delivering that energy. Community solar is another variation on the energy model, in which you subscribe to a particular solar farm and pay a set rate for energy from that farm.
State lawmakers and regulators need to change the rules to allow community solar to exist, which is happening slowly but surely. Efforts began more than a decade ago in Colorado and California, but the initiatives continue to expand.
“You’re seeing a maturation in some states and then a whole new introduction in some states, particularly in the Midwest,” said Stephen Cortes, senior director of public affairs and communications for the Coalition for Community Solar Access. “A little bit more conservative states are coming around to the benefits of community solar, and that’s exciting because it’s really a bipartisan form of energy that can really benefit ratepayers and the grid.”
Currently, 22 states and the District of Columbia have community solar programs, Cortes said. A lot of that growth has come since 2015, which gives regulators, lawmakers, utilities and customers more familiarity with the business model and more comfort implementing it.
Federal incentives implemented as part of the Inflation Reduction Act are also providing a big push for states to get in on community solar, Owen said. The law encourages the growth of community solar through tax credits, which become even more favorable if the project is designed to support low-income consumers if it’s built in an area affected by the extraction or burning of fossil fuels, among other factors.
“If these state regulators don’t make the move, they lose and their people lose,” Owen said. “It’s kind of that simple. You’re going to lose money.”
States with community solar are expanding it
Many of the states that already have community solar programs are expanding them, in many cases, starting with small pilot programs with strict caps on how much capacity could be built. “Those programs are now increasing the size of their programs, getting way beyond any type of pilot by quite a bit,” Cortes said.
Those caps on capacity have a real impact on customers wanting to subscribe to a solar farm. Artificial limits on the supply of community solar mean there are limited spots for those programs that do exist. Some states have long waitlists for a relatively small number of community solar programs, indicating significantly more demand than there is supply.
States with uncapped programs have fewer waitlists because community solar developers can build solar farms to meet the demand, rather than facing capacity limits, Cortes explains.
As pilot programs in early adopter states prove themselves out, it becomes easier to convince policymakers and stakeholders of the value of expansion, according to Cortes. “Once it is implemented in a state, people like it, customers like it. Even the utilities learn to like it in a lot of ways because they don’t have to pay for upgrades.”
More than just solar panels
The typical community solar project consists of numerous solar panels in a field. Sometimes the panels are on top of a building or in another place, but they’re still just a bunch of solar panels. That trend is changing, partly due to the timing of supply and demand.
Solar panels produce energy when the sun is out, and that’s when — with the increasing amount of solar on the grid — electricity is most abundant and cheap. Then the sun goes down, and utilities pivot to natural gas plants or similar sources to meet electricity demand. Community solar projects, along with grid-scale solar projects and homeowners with panels on their roofs, are adding batteries to even out the peaks and valleys of production and demand.
“It’s going to be incredible,” Cortes said. “It’s going to allow software to put solar energy that’s been stored up over time on the grid during peak demand times.”
The addition of solar farms with batteries located near demand centers like big cities will help support the grid, Owen said. “The grid in New York City or in eastern Massachusetts or in the Chicago area is being fortified by solar farms and batteries that are being built by thousands of companies across the country right now.”
Community solar growth still faces hurdles
The biggest obstacle to the growth of community solar is a common problem across the energy landscape, one word that will get anyone in the industry talking: interconnection.
Multiple steps are involved in the creation of a community solar program, and the construction of a solar farm may result in potential headaches. Obtaining community buy-in, acquiring land and permits, purchasing solar panels and getting the labor to build a solar farm can be difficult or time-consuming steps. Once the farm is built, it has to be connected to the grid, which can be the most challenging step.
More than 2,000 gigawatts of generating capacity are waiting on interconnection to the grid, according to an analysis by the Lawrence Berkeley National Laboratory. “We’re seeing historical rates across the country with gigawatts of clean, cheap power stuck in interconnection queues,” Owen said.
The Federal Energy Regulatory Commission — which oversees grid operators nationwide — is trying to influence that process to be faster, but it can still take years to get a solar farm hooked up.
Owen said he thinks utilities should have a financial incentive to encourage them to connect generators more quickly.
“If utilities got on the bandwagon, our industry would accelerate fivefold overnight,” he said.