Why community solar is heating up around the world
Key takeaways:
- Community solar is a system where a large local solar power plant is co-owned by local businesses or members of the community.
- Members of the community solar system receive credits on their electricity bills.
- Benefits of community solar include accessibility, reduced bills, and lower commitment.
- Drawbacks of community solar include reduced ROI and the fact that community solar isn’t available everywhere.
- When it comes to deciding whether community solar is worth it, you need to carefully consider your situation and energy needs.
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Want the advantages of solar, without installing your own solar system? Then community solar might be for you.
As the solar market continues to grow, there are more and more ways for homeowners to take advantage of the environmental benefits and cost savings of solar power.
And one approach in particular is becoming more popular every day: community solar.
But what is community solar? Why is it going through such a boom in popularity? And how do you know if it’s right for you and your home?
What is community solar and how does it work?
In some ways, community solar – often known as “renewable energy communities” or “citizen energy communities” in countries like Germany and Austria – is pretty easy to understand. But the specifics of how it works, and how it affects your energy spending, can be a bit more complicated.
Let’s start with the easy part. A community solar project – or community solar garden – is a large solar power plant that is co-owned by local businesses or members of the community.
Here’s where it can get confusing for some people: The energy generated by a community solar system isn’t sent directly to the homes of the co-owners. Instead, the energy is sold to the local grid, and then distributed to homes in the area by a utility company.
Every time the solar system sells energy to the grid, you receive credits against your electricity bill. This is a process called “virtual net metering”, where a meter attached to the solar system records how much energy is transported to the grid, and assigns members of the community solar project credits accordingly.
The larger your share in the community solar system, the more credits you receive – and the less you pay for your electricity.
This means that, each month, you’ll be paying two bills: the bill to keep your share in the community solar system, and your bill to your utility provider. That might sound intimidating, but your total electricity spend each month will generally be much lower than it would have been if you had bought directly from your utility provider.
Community solar vs. home rooftop solar
Home rooftop solar is probably the first thing that springs to mind when you think of solar panels for homeowners: smaller photovoltaic (PV) panels that either take the place of roof tiles or are installed on top of them.
Home rooftop solar and community solar have lots in common: They’re both great sources of renewable energy, and both offer homeowners the chance to save costs while reducing their carbon footprint.
There are, however, two big things to consider when installing a rooftop solar system.
The first is the upfront cost: If you opt for a rooftop solar system, you’ll need to either arrange funding or foot the bill for the installation yourself. There’s a time cost too: Arranging the installation of the panels and making sure they stay in good condition will be your responsibility.
The second is accessibility: To install rooftop solar panels, you need access to a rooftop that gets a good amount of sunlight. You will also probably need to own your home or have permission from the homeowner to install panels. This means that home solar systems often aren’t possible for renters, or for anyone who lives in an apartment (unless you have access to balcony space).
Community solar projects remove both of these barriers – but we’ll dive into that further in the next section.
What are the pros and cons of community solar?
Community solar can be an excellent way to access solar power without having to deal with the drawbacks of home solar systems – but it does have some downsides too.
Let’s explore some community solar pros and cons.
Pro: Community solar is far more accessible
One big benefit of community solar is that it makes solar available to a much wider range of people. You don’t need to have access to a rooftop or outside space. You don’t need to grapple with building management companies, homeowners’ associations, or local councils about whether or not you can install solar panels on your rooftop. You don’t even need to actually own your home.
All you need is access to a community solar system in your area – and to be able to pay the monthly fees required to get credits against your electricity bill.
Pro: Community solar can help you save on your electricity bill
In the US, the Department of Energy estimates that community solar subscriptions can save an average of 20% on customer bills.
Savings are likely to be similar in Europe. Exact figures aren’t yet available, but calculations from ElektrizitätsWerke Schönau (EWS), Germany’s most well-known energy cooperative, suggest that the average household could save around 8% on their energy bills.
And of course, you can reap all of these benefits without having to pay the upfront costs for installation. That’s a major saving: The average rooftop solar system in the US costs between $17,430 and $23,870, while the average European system costs around €7,827.
Pro: Community solar requires less commitment
Rooftop solar panels don’t require lots of maintenance, but you might need to make repairs from time to time, or arrange for your solar panels to be cleaned and cleared of debris that could block the sun’s rays from reaching the PV cells.
But with community solar, maintenance and repairs are no longer your responsibility.
Your investment also isn’t tied to one place as it is with rooftop solar panels. If you move house within the same area, you can probably still keep taking advantage of the same community solar system.
And, if you move further away and can’t get energy from the community system, you’ll just go back to paying your electricity bills the “normal” way with no lost investment.
Con: Community solar isn’t available everywhere
Finding space for a community solar farm isn’t easy – you need a good amount of empty, flat ground to allow space for so many solar panels.
Equally, community solar really thrives when it is supported by favorable local legislation, like tax incentives for businesses and zoning laws that make it easy to construct solar farms.
So it’s hardly surprising that many areas still don’t have access to a local community solar system. In fact, only 19 of the 50 US states currently have policies specifically designed to support shared renewables programs (although there are active solar projects in 41 US states).
Con: The ROI of community solar is smaller
Installing a rooftop solar system is a big investment, but eventually you’ll completely offset those upfront costs through energy bill savings and the profits that come from selling excess energy to the grid.
Community solar doesn’t offer the same kind of ROI. You’ll save on your energy bills, but you’ll always need to pay something to keep your stake in the community solar system. Equally, some of the profits the community solar system makes from selling energy back to the grid will have to be used on administrative costs or to pay staff, which means your potential savings are smaller.
Conclusion: Is community solar worth it?
Community solar can be an excellent way for homeowners to take advantage of solar power – while avoiding many of the drawbacks and barriers linked to rooftop solar systems.
However, there are some downsides, and community solar might not be for everyone.
The table below compares key factors you’ll want to consider when choosing between rooftop solar and community solar:
| Rooftop solar | Community solar |
Upfront cost | High – you’ll need to pay these costs yourself or find funding. | No upfront costs – just pay a fee to secure your stake. |
Responsibility | High – you’ll need to install and maintain your solar system yourself. | Low – the company or group of stakeholders in charge of the community solar system will handle maintenance. |
Savings and profits | High – any savings or profits are yours to keep. | Medium – you may save around 20% on your electricity bill, you won’t profit directly from selling energy to the grid. |
Accessibility | Lower – you’ll likely need to own your home and have access to outside space. | High – people who live in apartments or can’t install solar panels have access. However, there may not be a community solar system in your area. |
Take some time to speak to installers and visit a local community solar system, and think carefully about your needs and any barriers.
Either option could be the perfect path to helping you reduce your bills and your carbon footprint – it’s just about finding the right solution for you, your home, and your energy needs.
