Gigaton Potential
Project Drawdown estimates that distributed solar photovoltaics (PV) have the potential to eliminate 27-65 gigatons of CO2 emissions by 2050. Community solar is a smaller subset of the distributed solar market. While community solar alone will not lead us to net zero, it’s an effective way to reduce barriers and increase deployment.
You Might Be Interested If...
You believe in the power of proven, scalable, and cost-effective clean energy solutions.
You care about making the energy transition as inclusive as possible.
You're curious about solar but rooftop solar doesn’t work for you.
What You Should Know
There’s enough solar capacity installed in the U.S. to power 24 million American homes. Just over 50% of this comes from large, utility-scale solar projects. The remaining, called distributed solar, comes from smaller solar facilities, which are often standalone, rooftop, or carport solar projects. Unfortunately, ~50% of Americans interested in solar are unable to install it because they rent or live in multi-story homes. Community solar can help fill these gaps.
Community solar is a solar project shared by multiple consumers or businesses. Participants “subscribe” to a project and receive credits on their utility bills for energy created by the solar panels that are fed into the electrical grid. This structure, called “virtual net metering” offers a compelling solution for those who seek the economic savings and environmental benefits of solar but can’t access the rooftop solar market.
Image credit: Maria McCoy and John Farrell, ILSR - https://ilsr.org/national-community-solar-programs-tracker/
Quick Facts
~5 gigawatts of community solar capacity have been installed to date (enough to support 600k households). Capacity has grown at an 80% CAGR between 2014-2021. 5 more gigawatts of capacity will be added to the U.S. market over the next 5 years. Community solar is supported by legislation in many states but is mainly voluntary in others. Projects are highly concentrated by state with 80% of installed capacity in Florida, Minnesota, New York, Massachusetts, and Texas.
Community Solar Can…
Accelerate solar adoption and democratize access to renewable energy markets.
Offer a low cost/low stakes way to go solar, with easy enrollment and subscription models.
Save people money on their energy bills in areas where solar costs less than traditional electricity.
Increase engagement between local utilities and customers who opt-in to community solar.
Create value for landowners by monetizing unused land for community solar development.
Be beneficially located by utilities and developers where solar capacity is needed most.
Types of Community Solar
There are two consumer approaches to community solar: subscription and ownership. In both models, participants can get rebates on their electricity bill proportional to the amount generated by their share of the project.
Subscription-based projects are the most common and allow consumers to subscribe to a project without owning any panels. It’s easy to sign up, there are no upfront fees, and it’s easy to cancel. Typically, it’s a way to buy cleaner electricity at a lower cost than what’s offered by the utility.
In an ownership model, consumers purchase a certain number of panels from a project and receive electricity bill rebates for electricity generated by those panels. This model is most like purchasing rooftop solar panels, but they are not on your roof.
Key Players
Community solar projects can be developed by utilities, developers, or groups of individuals or businesses. There are varying degrees of vertical integration across development, operations, and subscriber management.
Marketplaces have also emerged to help consumers find and subscribe to community solar projects nearby more easily.
Opportunities for Innovation
⚖️Some states lack legislation necessary to do this
Only 22 states plus the District of Columbia have community solar legislation enabling customers to use solar electricity generated remotely (BUT, 1/3 of installed capacity is voluntary and 41 states have at least 1 community project online).
💸 Community solar customers are often not eligible for solar incentives
Community solar participants are often subscribers to rather than owners of solar panels. Many solar incentives like tax credits and rebates are only offered to owners.
🌲 Community solar farms can take up a lot of space
Community solar, like any solar, requires lots of sunny, open space. Clearing land for these types of projects can have unintended environmental consequences. It’s possible to build community solar without a high land footprint by using areas like landfills or covered parking lots that go unused or unoptimized. Advances in solar technology (like Nextracker’s Horizon-XTR all-terrain solution) will enable solar to be built with less land impact.
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Author Bio:
Hi, I’m Eliza. I’m a 2nd year MBA Candidate and Feldberg Fellow at Columbia Business School where I focus on climate innovation, venture capital, and entrepreneurship. I enjoy yoga, plant parenting, and vegetarian cooking. I’m currently #recruiting for a full-time role in climate upon graduation in May. Connect with me on LinkedIn!
Read More Here
The U.S. Department of Energy Launches $10 Million Prize to Accelerate Community Solar in Underrepresented Communities
IRA Creates Tailwinds for Community Solar Development
Community Solar as an Employee Benefit by Altus Power, CBRE, and Blackstone
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