When learning about the benefits of community solar projects, it’s important to remember the potential impact they can have on your local community. By gaining insight into the different aspects of this industry, you’ll be better prepared to make informed decisions on whether or not you should invest in one.

Utility Ownership Model

Community renewable energy is a new way of producing and consuming clean energy. It enables communities to relocalize the benefits of renewables and gain more control over their electricity systems. However, it has faced legal and financial barriers.

Community solar projects are becoming more popular in the United States. They offer the benefits of rooftop solar but require participants to purchase a certain number of panels rather than install their own. This allows the project to be more affordable.

Shared solar is a relatively new tool for community renewable energy. Individual subscribers buy shares of the project, gaining credit on their utility bills for the electricity generated by the project. The credits can be adjusted to keep up with the changing costs of electric utilities.

There are many options for creating a community solar project. A nonprofit or a third-party organization can develop a project, and a sponsor manages the relationship with the utility. The sponsor may have contracted a financer for the subscribers if the sponsor is a private company.

Financing options must be in place for communities to fully deploy community solar. Among the possibilities are low-income options and utility subscription models.

Location

Community solar is a type of solar electricity system shared by several households or businesses. The participants pay a small amount of money to purchase kilowatt-hour blocks of renewable energy generated by the system. This provides significant savings on their electric bill.

In addition, community solar projects are designed to provide a path for low- and moderate-income customers to benefit from clean energy. However, reaching these customer groups requires a well-designed program and targeted policy support.

Although the national average has grown steadily in recent years, community solar still represents a relatively small fraction of solar installations in the U.S. For this reason, it is essential to understand the advantages and disadvantages of participating in a community solar project.

Typically, these programs are designed to bring annual savings to participants. Those savings are then deposited into a special fund to be used for a sustainability project in the future.

These types of solar systems are a good choice for homeowners and renters. They can also work well for large commercial and industrial properties.

Subscription Savings

Community solar projects are an economical way to support clean, local energy. They can be used to benefit low- and moderate-income households. These subscribers help the community become energy independent, reduce greenhouse gas emissions, and support a more stable and environmentally sound electric grid.

In the United States, low- and moderate-income households spend three and a half times more on energy than their more well-off counterparts. The savings from community solar can be substantial, especially for those who can afford it. Depending on the project, the amount credited each month is based on the amount of solar energy produced by the chosen project.

There are two central subscription-based community solar programs: off-site and on-site. Off-site projects are designed to serve a more significant number of consumers. On-site projects are only accessible to a select group of property owners. It takes a few years for an on-site solar farm to pay back its costs, but it can provide the best long-term savings.

In addition to solar-produced electricity, a community solar subscription can bring other benefits, such as a streamlined process. Providers may also be agents for a specific developer or offer a basket of solar projects, depending on the subscribers’ needs.

Tax Benefits

Community solar projects provide several benefits to the local government and the community. They help improve the quality of life in the surrounding community, and they can also help reduce the risk of climate change. However, there are many challenges to implementing a successful project.

First, there are legal issues to consider. For example, federal securities laws may impact the structure of the project.

Another challenge is securing financing. Some sponsors require subscribers to find their own or contract with a finance company. In addition, some projects are subject to virtual net metering rules, making coordination tricky.

Finally, community solar projects are often subject to state or federal securities regulations. Depending on the type of project, these rules could have a significant impact on operations.

For starters, the solar Investment Tax Credit (ITC) is one of the most important federal policy mechanisms for supporting solar energy in the U.S. It will be available for taxpayers for over a decade.

The Inflation Reduction Act (IRA) also includes several tax benefits for community solar projects. One of the most significant advantages is that the IRA allows tax-exempt entities to pay directly for solar. This will enable them to receive payment from the Treasury Department.

Economic Development

Community solar projects can offer economic benefits to communities. They can provide local employment and tax revenue and boost the local economy.

Many programs are trying to bring solar power to low-income communities, but not all are designed similarly. Research can help policymakers and advocates promote more equitable community solar.

The Deloitte Center for Energy Solutions has released a report analyzing the growth of the community solar market. It identifies states’ policies that could encourage or discourage the development of these projects.

For example, some states have policies that favor utility-owned community solar projects over projects that non-utility institutions own. This can limit opportunities for local ownership and control of the projects.

However, research shows many other benefits to developing community solar. Communities can access economies of scale and reduce energy bills. These projects can also provide opportunities for non-homeowners to buy energy.

Another benefit of community solar is providing additional income to rural landowners. These landowners can earn tens of thousands of dollars annually by leasing their land to a community solar project.