Imagine cutting your electricity bill by 10-20% without installing a single solar panel on your roof. For the estimated 80% of Americans who can’t access rooftop solar—whether they’re renters, live in apartments, or have unsuitable roofs—community solar offers exactly this opportunity. Sarah Martinez, a Denver renter, discovered this firsthand when she subscribed to a local community solar project and saved $180 on her annual electricity costs while supporting clean energy in her community.
Community solar represents one of the fastest-growing segments of the renewable energy market, with over 8.6 gigawatts of cumulative capacity installed across 44 states, including the District of Columbia as of 2025. This comprehensive guide will explain exactly what community solar is, how it works, who can benefit, and how you can get started.
What is Community Solar?
Community solar is a solar energy deployment model that allows multiple customers to buy or lease portions of a larger, shared solar photovoltaic (PV) system. According to the U.S. Department of Energy, community solar is defined as “any solar project or purchasing program, within a geographic area, in which the benefits flow to multiple customers such as individuals, businesses, nonprofits, and other groups.”
Also known by various names including solar gardens, shared solar, solar farms, or roofless solar, these projects typically range from 1-5 megawatts in capacity and serve anywhere from dozens to thousands of subscribers. Unlike residential solar panels that directly power your home, community solar projects feed electricity into the local utility grid, and subscribers receive credits on their monthly electric bills for their share of the power produced.
The key distinguishing feature of community solar is that subscribers don’t need to install any equipment on their property. Instead, they purchase or lease a portion of a remote solar installation and receive the financial benefits through a process called virtual net metering, which allows customers to receive bill credits for generation from an off-site solar energy system.
How Community Solar Works: Step-by-Step Process
Understanding how community solar works requires following the energy and money flow from solar panels to your electric bill. Here’s the detailed process:
Step 1: Solar Energy Generation
The community solar farm, typically located within your utility’s service territory, generates electricity when sunlight hits the solar panels. These installations are strategically placed in areas with optimal sun exposure and minimal shading.
Step 2: Grid Connection
The electricity produced flows through a utility-grade meter directly into the local electric grid, just like power from traditional power plants. This energy becomes part of the general electricity supply for the area.
Step 3: Virtual Net Metering
Your utility company measures the total energy production from the community solar project and allocates credits to each subscriber based on their share size. This process, called virtual net metering, allows you to receive credit for solar energy produced miles away from your home.
Step 4: Bill Credit Application
The utility applies these solar credits to your monthly electric bill, reducing your electricity charges. You continue receiving electricity from the grid as normal, but your bill reflects the value of your share of the community solar production.
Step 5: Subscription Payment
You pay your community solar provider for the credits you receive, typically at a 5-20% discount compared to your regular electricity rate. This payment structure is what generates your savings.
Step 6: Ongoing Benefits
This process repeats monthly throughout your subscription period, which typically lasts 10-25 years. Seasonal variations in solar production mean you’ll receive more credits in summer months and fewer in winter, but the system is designed to provide annual savings.
For example, if your community solar share generates 500 kWh in a month and your utility rate is $0.12 per kWh, you’d receive $60 in bill credits. If your community solar provider charges you $54 for those credits (a 10% discount), you save $6 that month.
Who Can Benefit from Community Solar
Community solar opens solar access to a much broader population than traditional rooftop installations. Here’s who can benefit most:
Renters and Apartment Dwellers
The largest group of potential community solar subscribers consists of renters who cannot modify their living spaces. With 34% of American households renting their homes, community solar provides these residents their only pathway to solar savings. Renters simply need their own utility account and the ability to receive electric bills.
Homeowners with Unsuitable Roofs
Many homeowners face physical barriers to rooftop solar installation, including excessive shading from trees or buildings, roofs that are too small or structurally unsuitable, or homes with complex roof configurations that make installation prohibitively expensive. Community solar eliminates these physical constraints entirely.
Low-to-Moderate Income Households
Community solar programs increasingly include specific provisions for low-income customers, with many states requiring projects to reserve 20-50% of capacity for income-qualified subscribers. These programs often provide deeper discounts and may waive credit requirements that traditionally exclude lower-income households from solar access.
Businesses and Organizations
Small businesses, nonprofits, schools, and other organizations can subscribe to community solar projects sized to their electricity usage. This allows them to demonstrate environmental leadership and reduce operating costs without the complexity of installing and maintaining their own solar systems.
Eligibility Requirements
Most community solar programs require subscribers to:
- Have an active utility account in the project’s service territory
- Pay their own electric bills (not included in rent)
- Meet credit requirements (though many programs are reducing or eliminating these)
- Commit to subscription terms typically ranging from 1-25 years
Community Solar Benefits and Advantages
Community solar offers compelling advantages that make it attractive to a diverse range of customers:
Financial Benefits
Subscribers typically save 5-20% on their annual electricity costs, with savings varying by location, utility rates, and program structure. Unlike rooftop solar, community solar requires no upfront investment, making it accessible to households that couldn’t afford the $15,000-30,000 cost of a home solar system. The subscription model also provides predictable energy costs, protecting subscribers from utility rate increases.
Environmental Impact
A typical community solar subscriber can reduce their carbon footprint by 2-4 tons of CO2 annually, equivalent to planting 50-100 trees or taking a car off the road for 5,000-10,000 miles per year. By supporting new renewable energy development, subscribers contribute to grid decarbonization and help their states meet renewable energy goals.
Grid Benefits and Community Impact
Community solar projects strengthen the electric grid by providing distributed generation that can reduce strain during peak demand periods. These projects also create local jobs during construction and ongoing maintenance while keeping energy dollars in the local economy rather than sending them to distant fossil fuel producers.
Flexibility and Portability
Unlike rooftop solar systems that are permanently attached to a property, community solar subscriptions can typically be transferred if you move within the same utility territory. Many programs also allow subscribers to adjust their share size if their electricity usage changes, providing flexibility that fixed rooftop installations cannot match.
No Maintenance Responsibilities
Community solar subscribers enjoy the benefits of solar energy without any maintenance, insurance, or performance monitoring responsibilities. The project developer handles all technical aspects, allowing subscribers to simply enjoy their bill savings.
Types of Community Solar Programs
Community solar programs come in several different models, each with distinct characteristics:
Utility-Sponsored Programs
In this model, the utility company owns and operates the community solar project directly. Customers participate by paying an additional fee on their utility bills and receive credits for their share of production. This model offers the simplicity of single-bill management but may provide smaller savings since utilities aren’t motivated to maximize subscriber discounts.
Third-Party Developer Models
Private companies develop, own, and operate community solar projects, then market subscriptions directly to customers. Subscribers receive separate bills from both their utility (for regular electricity usage) and the community solar provider (for their solar subscription). This model often provides larger savings but requires managing multiple bills.
Subscription vs. Ownership Models
Most community solar operates on a subscription basis, where customers pay monthly fees for bill credits without owning any physical equipment. Some programs offer ownership models where customers purchase panels or shares of the project upfront, receiving all production credits and potentially claiming federal tax incentives. Ownership models require significant upfront investment but may provide greater long-term returns.
Special Programs for Low-Income Households
Many states require community solar projects to include low-income provisions, such as:
- Reserved capacity for income-qualified subscribers
- Deeper discounts (often 20-50% savings)
- Waived credit requirements
- Shorter contract terms or easier cancellation policies
- Additional benefits like weatherization assistance or energy education
Community Solar vs. Other Solar Options
Understanding how community solar compares to alternatives helps determine the best choice for your situation:
Community Solar vs. Rooftop Solar
| Factor | Community Solar | Rooftop Solar |
|---|---|---|
| Upfront Cost | $0 | $15,000-$30,000 |
| Annual Savings | 5-20% | 50-90% |
| Maintenance | None required | Homeowner responsibility |
| Eligibility | Renters and homeowners | Homeowners only |
| Roof Requirements | None | Suitable roof required |
| Portability | Often transferable | Tied to property |
| Tax Incentives | Generally not available | 30% federal tax credit |
Community Solar vs. Green Power Plans
Retail green power plans allow customers to purchase renewable energy certificates (RECs) but typically cost more than standard electricity rates. Community solar provides actual bill savings while supporting new, local renewable energy development rather than potentially decades-old projects located anywhere in the country.
Community Solar vs. Community Choice Aggregation
Community Choice Aggregation (CCA) programs allow local governments to purchase electricity on behalf of residents, sometimes including renewable options. However, CCAs don’t necessarily support new renewable development and may not provide cost savings. Community solar directly funds new clean energy infrastructure while delivering guaranteed savings.
State-by-State Availability and Policies
Community solar availability varies significantly by state, with policy frameworks determining program success:
Leading States by Capacity (2025)
- New York: 2.4 GW installed capacity (largest market)
- Maine: Leading in recent installations and growth
- Minnesota: 47% of existing solar is community solar
- Massachusetts: 20% of existing solar is community solar
Enabling Legislation Requirements
For community solar to thrive, states typically need enabling legislation that establishes:
- Virtual net metering policies
- Program size limits and project caps
- Subscriber protections and disclosure requirements
- Low-income access provisions
- Utility interconnection standards
As of 2025, 24 states including Washington D.C. have comprehensive community solar policies, while 44 states including D.C. have at least one operational project. The remaining states either lack enabling legislation or have regulatory barriers that prevent program development.
Low-Income Provisions by State
Twenty states include specific low-income provisions in their community solar programs, ranging from simple capacity set-asides to comprehensive affordability programs with additional benefits like energy efficiency upgrades and workforce development opportunities.
How to Find and Choose Community Solar Projects
Finding the right community solar project requires research and careful comparison:
Step 1: Check Availability
Start by searching online for “community solar [your state]” or “community solar [your utility company].” Many states maintain official databases of available projects, while third-party marketplaces like EnergySage provide comparison tools.
Step 2: Verify Eligibility
Confirm that you’re in the correct utility service territory for available projects. Most programs require subscribers to be customers of the same utility that purchases power from the community solar project.
Step 3: Compare Key Factors
When evaluating projects, consider:
- Savings percentage: Look for projects offering 10-20% discounts
- Contract length: Shorter terms provide more flexibility
- Cancellation terms: Understand notice requirements and any fees
- Billing structure: Decide between consolidated or separate billing
- Credit requirements: Some projects have minimum credit scores
- Project status: Active projects provide immediate savings
Red Flags and Consumer Protection
Be cautious of:
- Door-to-door sales tactics or high-pressure sales
- Requests for upfront payments or fees
- Guaranteed savings claims without detailed calculations
- Contracts without clear cancellation terms
- Companies not registered with state regulators
Questions to Ask Providers
- What percentage discount do you offer on bill credits?
- How long is the contract term and what are cancellation requirements?
- Will you provide consolidated billing or separate bills?
- What happens if I move within the utility territory?
- Can you provide references from current subscribers?
- Are there any additional fees beyond the subscription cost?
Understanding Community Solar Billing
Community solar billing can initially seem complex, but understanding the process helps maximize benefits:
Billing Timeline
After subscribing, expect a 1-3 month delay before seeing credits on your bill. The utility must first set up your account for virtual net metering, and then the community solar project needs to generate electricity and have it measured before credits can be calculated and applied.
Seasonal Variations
Solar production varies significantly by season, with summer months typically generating 40-60% more electricity than winter months. This means you’ll receive larger bill credits in summer and smaller credits in winter. Most programs are designed so that annual savings meet projected targets despite these variations.
Billing Structures
Community solar billing comes in two main formats:
- Consolidated Billing: Your utility manages both your regular electricity charges and community solar credits on a single bill, with the utility collecting payments for the community solar provider
- Separate Billing: You receive two bills—one from your utility for regular electricity usage and another from the community solar provider for your subscription
Sample Bill Breakdown
A typical month might show:
- Regular electricity usage: $80
- Community solar credits: -$30
- Net utility bill: $50
- Community solar subscription fee: $27
- Total monthly cost: $77 (saving $3 compared to $80 without community solar)
Common Challenges and Limitations
While community solar offers significant benefits, potential subscribers should understand current limitations:
Limited Availability
Many areas still lack community solar options due to absent enabling legislation or insufficient project development. Even in states with programs, rural areas may have fewer options than urban centers.
Credit Requirements
Some programs maintain credit score requirements (typically 600-700) that can exclude lower-income households, though this barrier is decreasing as more programs eliminate credit checks.
Waiting Lists and Capacity Constraints
Popular programs often have waiting lists, and some projects require minimum subscriber numbers before construction begins, potentially delaying benefits by 6-18 months.
Contract Complexity
Community solar contracts can be complex, with important details about escalation clauses, transferability, and cancellation terms that require careful review. Some contracts include annual price increases that can erode savings over time.
Regulatory Uncertainty
Policy changes at the state level can affect program economics, and some programs have faced capacity caps or other restrictions that limit growth.
Future of Community Solar
The community solar market is poised for significant expansion, driven by supportive policies and growing consumer demand:
Market Growth Projections
Industry analysts project the U.S. community solar market will add more than 6 gigawatts of capacity over the next five years, potentially serving millions of additional households. The Biden administration’s goal of powering 5 million homes with community solar by 2025 reflects strong federal support.
Policy Developments
More states are expected to pass enabling legislation, while existing programs are expanding capacity limits and improving consumer protections. The federal Solar for All program provides $7 billion to increase low-income access to community solar.
Technology Improvements
Advances in solar technology continue to reduce costs while improving efficiency. Battery storage integration is beginning to appear in community solar projects, potentially providing additional grid benefits and subscriber value.
Expanding Accessibility
Programs are increasingly focused on reaching underserved communities, with innovative financing mechanisms and partnerships with community organizations helping overcome traditional barriers to participation.
Conclusion
Community solar represents a transformative opportunity for the millions of Americans who cannot access rooftop solar systems due to renting, unsuitable roofs, or financial constraints. By allowing subscribers to benefit from solar energy without any installation or maintenance responsibilities, community solar democratizes access to clean energy while providing meaningful bill savings.
The key to success with community solar lies in understanding your options, carefully comparing available projects, and choosing a program that aligns with your financial goals and values. With proper research and realistic expectations, community solar can provide years of electricity savings while supporting the growth of renewable energy in your community.
As the market continues to mature and expand, community solar will likely become an increasingly important tool for achieving broader clean energy goals while delivering economic benefits directly to consumers. For those ready to take the next step, start by researching available projects in your area and connecting with reputable providers to explore your options. Consider exploring various solar financing options and energy storage systems to maximize your renewable energy benefits.