what to consider when comparing community solar projects

Not all community solar projects are created equal. As access and availability expand across the country, the goals, objectives, and terms of community solar projects also evolve.  Community solar programs vary from state to state and utility to utility, so it’s important to understand what each project offers you. 

If you're not familiar, community solar is an initiative where you can sign up for a share of a large solar panel installation. In exchange for a monthly subscription fee, you receive a discount on your electric bill. While most programs will save you money, some community solar projects promise greater savings than others. Whether you’re eligible for a dozen community solar farms or just one, it's essential to understand the terms and conditions of each offer before you sign on to a project. 

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Key takeaways

  • The two most common types of community solar programs are subscription-based and ownership-based, although subscription-based programs are by far the most popular community solar structure.

  • Under an ownership model, you'll pay for the system upfront with cash or a loan.

  • Community solar subscribers typically pay to participate through ongoing monthly payments. 

  • Comparing each project's location, construction status, reputation, and fee structure will help you find the best community solar company to work with.

Below are questions to ask yourself when you're reviewing your community solar options:

How much solar energy do I need?

There are a few things to consider when sizing your community solar share: your current and future annual electricity demand, the capacity of your share, and its output. Most community solar companies will size your share of the solar array to meet nearly 100% of your annual electricity needs. Don't be alarmed if your solar production doesn't always align with your energy demands: Solar panels typically produce more electricity in the summer and less in winter, so the output of your share will vary from month to month. However, this should balance out over a year to save you 5-20% on your annual electric bills. 

Community solar companies usually rely on your current annual electricity usage to size your share, but you may be able to adjust for future electricity needs. For instance, if you plan to electrify your heating and cooling systems with heat pumps, ask for a larger project share. You might be unable to resize your share after signing up, so it's best to talk to your provider before subscribing. 

Is it an ownership-based program or a subscription-based program?

The main difference between an ownership-based community solar program and a subscription-based program is how you pay for it. Under an ownership model, you'll pay for the system upfront with cash or a loan. Under a subscription model, you'll make monthly payments for your project share. Subscription-based programs are by far the most popular option, so don't be surprised if there aren't ownership-based programs available in your area. For reference, we only offer subscription-based projects through the EnergySage Community Solar Marketplace.

Where is the project located?

One of the benefits of community solar is its direct impact on your state, town, and neighborhood. A community solar farm (AKA solar garden) located in your area provides clean energy to your electric grid and employs people in your community. Because of this, many people prefer to subscribe to a project close to their home or business. (Remember, the community solar project you choose needs to be in your utility territory.)

Does the community solar company have a good reputation?

If you have questions about your bill credits, monthly charges, or other subscription-related topics, you want to be able to get in touch with your community solar company quickly. Of course, it can be challenging to gauge the responsiveness of a customer service team while signing up. Still, most community solar companies have online reviews from past and current customers, speaking to their reputation. 

When will the project go live?

It's common for community solar companies to fill projects with subscribers before the solar array is "live," meaning a project might not be complete when you sign up. A project's "go live" date can provide an estimate of when you'll start seeing community solar savings. If your potential community solar project isn't running, there might be a waiting period before you receive energy credits.

Purchasing a share in a community solar project is like investing in a rooftop solar system: you make an upfront payment now to cut future electricity costs. On the other hand, subscription-based programs are available in various structures, so it's easiest to compare them based on estimated savings over a set time. Either way, it’s helpful to ask yourself the following questions before signing on the dotted line:

When will I start saving money?

The timing of your savings from community solar largely depends on the program structure. Some programs use escalating solar rates, promising you'll eventually save as inflation drives higher utility rates. Other programs offer a fixed discount on all the solar energy you buy (i.e., 10% less than utility rates.) If you have a choice, fixed discounts offer the most certainty throughout the program.

If you participate in an ownership-based community solar project, you’ll likely pay more upfront than a subscription-based program. A good community solar company will offer a transparent, conservative estimate of payback time or how long it will take before you recover your initial investment. 

Are there additional fees?

Fortunately, most community subscriptions lack an upfront fee – but it doesn't hurt to double-check! As for ownership-based community solar, the purchase price usually includes maintenance and administration costs, but confirming before you move forward is critical.

Can I get a loan?

Solar loans are a great way to finance your community solar share upfront. Fortunately, now $0-down loans are available for many projects, allowing you to start saving money on day one!

Will I be penalized for late payments?

Receiving electricity from a community solar project is not always the same as buying energy from public utilities, so you may not have the same protections if you run behind on your bills. Check the terms of your contract so you can prepare for this scenario.

Can I cancel my subscription at any time? And are there any penalty fees for an early exit from the program?

Many community solar providers allow you to terminate your subscription anytime but may require a minimum cancellation notice or a small fee.

Can I transfer my subscription to my new address if I move?

Most community solar programs will let you 'take it with you' at no additional fee if you move within the same utility territory.

Can I take the panels home at the term's end?

Most ownership-based programs and even some subscription-based projects will let you take your share of panels home after the project is decommissioned (but not before!). At that point, you may use them as you wish, but remember that the panels are just one small part of what you paid for initially (inverters, cables, and mounting equipment). Think of this as a small 'bonus' for participating in the project.

What's the cost per watt ($/W)?

Each community solar offer will look different, making comparing your options tricky. Knowing the cost per watt for a share will allow you to compare pricing offers meaningfully.

Am I eligible for any incentives?

Financial incentives can significantly cut the cost of going solar. Since ownership is typically a requirement, you’d have to participate in an ownership-based community solar project to qualify for incentives. Your eligibility for state and local incentives depend on your state and your utility company, but federal incentives are open to anyone. For example, the federal solar tax credit allows community solar participants to claim a section 25D tax credit if the electricity generated by the solar project does not exceed their homes' electricity consumption.

How much will I pay for electricity after buying a share?

What rate will your utility credit you for your solar production? Does it fluctuate over time or stay flat? In most cases, your state's net metering policy will influence this.

How do the costs and savings compare to installing a rooftop system?

Community solar has expanded the solar industry to benefit more people, but rooftop solar typically allows you to save significantly more money than owning a share of a community solar project. If your roof is a good fit for solar panels, we recommend comparing installation options for your property before deciding to buy a share of a solar project.

Comparing community solar quotes can feel overwhelming. Thankfully, EnergySage does the heavy lifting for you. Compare local options, get a quick community solar savings estimate, and seamlessly subscribe to an open project in your area on the EnergySage Community Solar Marketplace. Sign up today to speak with our expert team of Energy Advisors who will help you go solar with confidence!

Get the benefits of solar without installing panels
Please enter a five-digit zip code.
  • 100% free to use, 100% online
  • Enjoy 5 - 20% off your annual electricity bill
  • Unbiased Energy Advisors ready to help
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