How much can you save with community solar?

You’ve heard you can save up to 20% on your electricity costs simply by signing up for community solar. You’re ready to sign on the dotted line, but then you read the fine print, and your head spins. How do bill credits work? How does my utility fit into this? Is community solar too good to be true?  

As your trusty energy advisor and community solar expert, we assure you that community solar really is that good—it just takes some time to understand how it all works. 

Community solar is an alternative way to go solar, and fittingly, the billing structure and subsequent savings may look a little different than you’re used to. Let’s break down what you can expect to save by signing up.

When you participate in community solar, you’re essentially purchasing a portion of the energy generated by the solar farm.   

It works like this: You're allotted a share of the total capacity based on your historic utility usage. You pay your community solar company for the energy your share produces, but at a rate that’s discounted compared to your normal electric bill. Then, thanks to virtual net metering (a billing mechanism that allows community solar subscribers to earn bill credits from their share of the solar farm), the amount of electricity your share of the solar farm produces is reflected on your utility bill as a credit against the amount of power you pulled from the grid. 

If your portion of the solar farm produces more power than you consume in a given billing cycle, those extra credits are carried over to the next month. 

We’ve found that most community solar subscribers save 5-20% on their electric costs over the course of the year, with the monthly amount of savings fluctuating depending on how much the panels generate and how much power you use. 

Just remember that community solar usually takes at least one monthly billing cycle to impact your electricity bill, so you probably won’t see savings the day you subscribe.

Community solar discount models

There are three different models of community solar: fixed discount on bill credits, fixed discount on electricity rates, and ownership. Your savings will differ depending on which kind of service you subscribe to.

Arguably the most confusing part of community solar is the billing process. Most programs don’t consolidate your bills, so you’ll receive two bills every month: your regular utility bill and a separate bill from your community solar company. 

Admittedly, it’s not the most efficient or intuitive process, but it is what it is for now. Let’s walk through it. 

The community solar projects available through the EnergySage Marketplace are all fixed discount models. You receive a fixed discount (usually 10%) on the total value of the solar credits you purchased through the farm. Bear with us—here's an example:

In this example, you used $120 worth of power in the billing month. At the same time, your community solar share generated $100 worth of electricity credits, which brings your utility bill down to just $20. Because you receive a 10% discount for those community solar credits, your cost for that $100 credit is $90. 

So, the $90 subscription cost plus the remaining $20 power bill means your total utility costs for the month were $110. You saved $10 — plus you supported a clean energy project.

If you join a community solar program in the winter and don’t see the savings you were promised at first, don’t worry. Solar power generally produces more electricity during sunnier months and has lower production levels during the winter. Community solar is not exempt from this. You’ll likely accumulate more community solar credits than you can use in the summer, which you can roll over and use during the winter when solar production isn’t as high. 

Community solar demonstrates its savings power over multiple months, and you'll have a clearer idea of your actual savings from community solar once you’ve been subscribed for a year.

Community solar savings typically range between 5 and 20% of annual electricity costs. Your exact terms depend on the project and company you decide to go with. Eligibility varies from state to state, town to town, and even utility to utility, but if you happen to qualify for multiple local projects, comparing your options can help you get the best deal. But even if there’s only one project available to you, community solar can save you some money while contributing to a cleaner local electric grid.