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Community Solar Explained: Buy Solar Energy Without the Panels

No money for solar panels? Start saving with community solar.

Two people walk by a large solar array in front of an orange apartment building
Community solar opens access to solar power to people who can't put solar panels on their roofs, for one reason or another.
Billy Hustace/Getty Images

People are putting solar panels on their roofs at an impressive clip. Over half a million houses got solar panels in 2020 alone and 5% of homes in the United States that are suitable for solar have solar panels installed. And 13% of homes in America could have solar panels by 2030.

Maybe you've looked into putting solar panels on your roof, but it didn't make sense. You've looked at the cost and potential savings and the math didn't work out for you. Maybe your roof is too shaded or oriented poorly for solar. Maybe this year is just a year too soon. Maybe you rent or live in a condo complex. But access to solar energy, and the associated savings, doesn't always require a ton of money or even owning your home.

Depending on where you live, you may have the option to join a community solar program that lets you subscribe to solar power generated off your property. In states where community solar is allowed, you can start saving money on electricity almost immediately with very little effort.

What is community solar?

Community solar is a fast-growing solar option for when traditional solar doesn't work. Rather than using electricity from solar panels located on or around the home, community solar subscribers get power from larger arrays of solar panels located (usually) nearby.

Community solar arrays are usually owned by non-profit organizations, some other third-party company or a utility. Subscribers sign up to pay for the electricity produced by a portion of that array, often at a discounted price.

Signing up for community solar will make your bill look different, depending on your utility and your community solar supplier. In some cases you'll receive two bills; in others, the electricity generated by your portion of the community solar array will be credited against your utility bill. It's also important to note that your savings (typically from 5% to 10% depending on your community solar plan and utility) are typically seen over the entire year. That's because your savings will vary throughout the year.

In most of the United States, utility companies operate as regulated monopolies. Unless otherwise mandated, they're the only ones allowed to generate and distribute electricity in a given area. For community solar to really save consumers money, the state legislature needs to allow third parties to construct and operate solar arrays.

There are 41 states with community solar installations as of December 2021, according to the National Laboratory for Renewable Energy. Only 19 states and Washington, D.C., have policies promoting community solar.

It's in these states, where competition drives down cost, that people save money by switching, said Jeff Cramer, CEO of Coalition for Community Solar Access, a national organization advocating for greater access to community solar. 

"[If] it's owned by a third party and it's created through a program that the state allows multiple parties to compete [...] those guarantee savings to customers because you have competition in the marketplace," Cramer said.

Not all programs with the label community solar return savings to subscribers. In states without legislation to open the playing field to third parties, utilities can offer community solar subscriptions, sometimes at a premium. In these cases, the pitch to subscribers centers on reducing one's personal carbon footprint or accelerating the transition to renewable energy by subsidizing new solar or wind farms.

Why community solar?

The most obvious and attractive benefit of community solar is savings on your electricity bill. Saving 10% of an electricity bill in the contiguous United States can be anywhere from $96.29 a year in Utah to $193.86 in Connecticut, according to the US Energy Information Administration's 2020 data. Adjusted down to 5%, Americans in the lower 48 will save from $48.14 to $96.93. 

Community solar opens these savings to people who aren't able to acquire rooftop solar: renters, low-income homeowners and people who live in shaded areas, to start. Connecting people with low incomes to community solar programs is one goal of a community solar subscription pilot program recently announced by the Biden-Harris administration. Some enabling legislation requires that a certain percentage of subscribers are low- or moderate-income.

Community solar arrays can be built on a larger scale (which is typically cheaper) in places better suited to solar production. Instead of placing panels on roofs oriented in less-than-ideal directions, or cutting down trees to eliminate shade, community solar arrays can be sited in ideal locations. That might mean more cheap, highly performing solar in a community than would otherwise be.

Because community solar isn't tied to a rooftop, if someone moves within a service area, they can take their service with them to a new address. Homeowners don't take rooftop solar panels with them (some research shows that it does boost a house's selling price).

Community solar can benefit the grid and utilities as well. Placing solar farms on the grid where there are few other power sources can help stabilize the grid. Solar power can also help utilities meet renewable power thresholds mandated by the state.

Community solar could also inspire some pride in local power generation, Cramer of the Coalition for Community Solar Access speculated.

Given the choice between 10% savings and 12% savings, someone might decide "I'm actually going to take the 10% one because I drive past that one every day on my way to work," Cramer said.

There are plenty of people who can't yet access cheaper community solar because they live in a state without enabling legislation. Still, community solar is expected to nearly double in the next five years, adding more than 4.3 gigawatts.