There are two types of solar farms- community and utility (commercial) scale. Community and commercial solar farms both participate in solar energy production, but on completely different scales. In this guide, we will outline some common FAQ's about community solar projects.
What is community solar?
Community solar, also known as shared solar or solar gardens, is a system where multiple individuals or organizations come together to collectively own and share the benefits of a single solar energy project. This allows for people who are unable to install solar panels on their property, such as renters or those with shaded roofs, to still have access to clean renewable energy. Community solar farms often offer lower prices for electricity than the utility company.
What is the difference between community and commercial solar?
There are a few differences between community and commercial solar projects. In commercial solar projects, a solar developer leases land from a property owner to construct solar panels. When the solar project is fully operational, they sell the electricity generated from the solar panels back to the local utility company. This differs from community solar projects in that the property owner who has leased land for a solar farm does not directly purchase or use the energy generated from the solar panels.
The land requirements for community and commercial-scale solar projects differs. Commercial solar projects are typically much larger in size and scale than community solar projects. Additionally, community solar projects must be located adjacent to the energy consumers (ie; homes and businesses), while commercial-scale solar projects can be in remote locations.
How does community solar work?
Community solar works by allowing individuals or organizations to purchase a share of a solar project, typically in the form of panels or kilowatt hours (kWh). The electricity generated from the project is then credited to each member's utility bill, reducing their overall energy costs.
The developer constructs a solar farm capable of generating sufficient electricity to fulfill the energy requirements of the community.
Community members negotiate and sign a contract to purchase energy from the solar array.
The energy they purchase from the community solar farm is credited to their account with the local utility company.
Through net metering, the consumer's energy usage is tracked by their meter, and the solar credits offset their energy bill.
What are the benefits of community solar?
There are many benefits of community solar programs. They provide a win-win situation for the end-user of the energy generated from the solar farm and the solar developer. The end-user pays less for their power bill at the end of the day, and the utility company benefits from extra grid stability and generation capacity. Other benefits include:
Access to clean renewable energy for those who cannot install solar panels on their property
Lower electricity prices compared to the utility company
No upfront costs or maintenance responsibilities for community members
Potential for energy bill savings and long-term fixed rates
What are the drawbacks of community solar?
Although community solar farms have a handful of benefits that have led to their increased popularity across the country, there are also some potential drawbacks that property owners and energy consumers should consider.
No tax incentives or rebates are available for the energy consumers. Most people invest in a community solar project under a subscription model, meaning that you don't own the solar panels but pay for the electricity that they generate at a lower rate than what the utility company typically charges. Most solar incentives are only available to the owner of the solar farm, which is the solar developer in this case.
Community solar farms are not yet available in every state. According to SEIA, 41 states have at least one community solar project in place in 2023.
Who can participate in community solar?
Community solar is open to anyone, including homeowners, renters, businesses, and organizations. Any member of the community can subscribe to a solar farm and enjoy the benefits of renewable energy while also supporting their local economy. Additionally, many states have specific programs in place that prioritize low-income households or provide additional incentives for them to participate in community solar projects.
How can I lease land for a solar farm?
Landowners can benefit from having a solar farm on their land. It is a great source of passive income from solar lease payments. But how can you tell if your land is best for commercial or community solar energy production?
Several factors determine whether land qualifies for a solar lease, such as available acreage, investment costs, and proximity to electrical infrastructure. By using LandGate's complimentary property report report, landowners can receive a lease estimate for a potential solar farm. This report provides valuable insights into the suitability of the land for a solar farm and enables property owners to make informed decisions.
Exclusion zones
Buildable acreage
Proximity to a transmission line
Proximity to a distribution line
Proximity to a substation
Amount of sunlight
Proximity to other solar farms in your area
