What is Community Solar? | Quick Electricity
How Do I Claim the Savings From a Community Solar Project?
When you own solar panels, power bill savings happen directly. Each kilowatt-hour (kWh) generated by a photovoltaic system is a kWh you don’t have to purchase from retail electricity providers, and your power bill decreases. Some retailers offer solar buyback plans, which means they purchase surplus generation from solar panels that is not consumed right away.
On the other hand, community solar power offers indirect electricity savings. The process can be summarized in the following steps:
- You join a community solar project as an investor or subscriber, or by signing a lease.
- You are assigned a percentage of its electricity production, based on your ownership share or type of subscription.
- All the electricity generated by a community solar project is metered and exported to the grid, at a determined kilowatt-hour price.
- Your share of electricity production can be converted into a dollar value, and this amount is subtracted from your next power bill.
As a quick example, assume you have a 10% share in a community solar project that generated 10,000 kWh during a month, which means you are entitled to 1,000 kWh. If this electricity is priced at 10 cents/kWh, you get a $100 credit on your next power bill.
Community solar power also offers economies of scale: a single solar array with a capacity of 150 kW has a lower cost than 30 small-scale systems with a capacity of 5 kW each. According to the latest data from the Solar Energy Industries Association, small residential systems have an average price of $3.27 per watt, while commercial installations have an average price of $1.66 per watt.
Community solar power is an excellent option if you cannot purchase your own photovoltaic system for any reason. Just keep in mind that community solar projects must be enabled by law, which means they are not available in all states. However, local power companies can decide to participate in community solar voluntarily even if there is no dedicated legislation.
Since the solar panels are not installed on your home, this type of project also offers flexibility:
- You can move to another address and transfer the savings to your new power meter.
- You can end your subscription, or sell your ownership share to another user.
