Rooftop vs. community solar: What you need to know

Both rooftop and community solar can shrink your electricity costs and your carbon footprint, but they generally serve different groups of people. If you install solar at your home or business, you'll likely install a rooftop solar panel system. If your home isn't a good fit for a rooftop system, community solar lets you reap some of the same financial and environmental benefits by offering the opportunity to subscribe to, or even purchase a part of, a larger solar panel project in your area. 

Community solar expands the benefits of solar power to reach more people. Large-scale solar projects, or solar farms, send renewable electricity to the local grid. Customers of the cooperating utility are eligible to subscribe to the solar farm and receive a discount on their electricity bill. Ultimately, your personal preference, living situation, and energy goals will determine whether rooftop or community solar is best for you. Let’s break down the key factors to keep in mind when you’re comparing solar options:

It’s pretty clear what you’re getting when you buy a rooftop solar panel system. The panels and other equipment are installed on your property and the electricity generated goes straight to your home.

It can be harder to conceptualize the benefit of a community solar project. When you buy into community solar, you pay for the power produced by the solar panels in the community solar farm, just like you pay for solar energy with rooftop solar. The only difference is that instead of producing solar power locally at your home or business, community solar production takes place at the solar farm itself, where it sends the energy back to the grid, offsetting the proportional amount of fossil fuel consumption.

With rooftop solar, you can either own or lease your system. If you own your solar panel system, you own the physical equipment (i.e., solar panels, inverters, and more), and you'll see the largest financial and environmental benefit from your solar panels over their 25-plus-year lifetime. On average, it costs $17,430 to $23,870 to purchase a solar panel system in 2023, which you can pay for upfront with cash or with a solar loan.

If you lease your system, a third party owns the solar panels on your roof, and you purchase the power they generate every month. Paying for a leased solar panel system is similar to paying for community solar. 

Most community solar projects use a subscription model: you pay monthly for the electricity they produce. The way the subscription works, and the reason it's an attractive investment, is that the electricity you purchase from a community solar subscription is sold at a discounted price compared to your utility charges. If your annual electricity costs are $1,600, and the electricity you buy from community solar comes at a 10% discount, you’ll end up saving $160 over the course of the year.

In some cases, community solar projects may also allow you to purchase a portion of the project outright, often by offering you direct ownership of a certain number of panels. In those instances, you may pay for your share like an owned rooftop solar system, either with cash upfront or financed with a loan over time.

With community solar, the financial benefits are straightforward: you're replacing what you pay your utility for electricity with a lower rate for electricity purchased from the community solar farm. Doing so saves you 5-20% on your annual electricity bill.

With rooftop solar, you benefit financially by using solar electricity to offset what you would have used from your utility company. However, you'll likely see higher financial savings, especially if you pay for the system upfront. On average, solar owners can save between $20,000 and $97,000 on electricity over the lifetime of a solar panel system. 

Additionally, with rooftop solar, you may be eligible for rebates and incentives from the federal government, state government, or even your utility. Installing solar also has the potential to increase the value of your home. A study from Zillow found that homes with solar sell for four percent more than similar homes without solar.

Both rooftop and community solar allow you to offset or avoid electricity produced by fossil fuels, leading to carbon emission reductions and improved local air quality. 

One thing to consider when comparing rooftop and community solar is that rooftop solar efficiently uses otherwise 'empty' space by taking advantage of unused square footage on your roof. Community solar requires much more space than rooftop solar, so it's always a good idea to see what type of land it's built on: otherwise unusable land (like a former landfill) or land that could have another, more beneficial use.

If you end up selling your home with solar, you'll have to install solar again at your new home. Unlike your favorite couch, you can't take your solar panels with you from home to home. 

With community solar, if you move to another home within the same utility service territory, you'll likely remain subscribed to the same community solar project. If you're moving out of state or somewhere not covered by your same utility, you can either cancel your subscription or pass it to the new owner of your home.

The most important thing to remember is that both rooftop and community solar are ways to provide affordable electricity for your home, help the environment, and save money at the same time. What's not to like?

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