Community Solar Project Evaluation

Click here to download a pdf version. 

Solar energy isn’t just for homeowners anymore. Community Solar allows electricity customers to buy into, or collectively invest in, a renewable project in their service territory, and reap the benefits. This means that even if you don’t have a suitable site for solar, or if you rent, you can participate in a community renewable project elsewhere, and the utility will credit your share of the power produced to your monthly utility bill. You can go solar, support clean, locally generated power, and save money without having to install panels on your property. With so many projects in the pipeline, though, it’s difficult to know which one to choose. 

CLP has compiled a list of things to know and questions to ask to help you decide which community solar project is the right fit for you.


HOW IT WORKS

In order to join a community solar project or other renewable project you must have an account with the electricity utility provider in your area. Once you find an available project that fits your needs and subscribe, you will be issued a share of the project based on your estimated electricity usage. Your utility provider will continue to supply power to your home. Each month you’ll pay the renewable project for your allocated share and you’ll be credited for your portion of the renewable project on your utility bill. This means that you will receive two bills each month, one from your utility and one from your renewable project. 


MEMBERSHIP MODELS

There are generally two types of membership plans available: 

  • Subscription Plans are more common. They typically have little to no upfront costs and have shorter or more flexible term options.
  • Purchase Plans include ownership of the panels at the project site. They typically have a greater savings potential over time and sometimes qualify for tax credits. 

Questions to ask: 

  • What membership plans are available?
  • If a project is offering both, what are the differences in upfront costs and long term savings between the two?


FINANCIAL BENEFITS

Most community solar projects are offering some sort of financial incentive to joining, typically a percentage savings off your electricity bill over time. That savings could be based on your electricity usage or your entire bill, depending on the project.

Questions to ask: 

  • What are the savings being offered?
  • Are those savings guaranteed for the duration of the contract?


POWER GENERATION AND YOUR SHARE OF THE PROJECT

When you subscribe to a project, you will be assigned a share. This is not a guarantee of a certain amount of power generated each month. Rather, think of it as the number of panels out of the entire array that are allocated to you. Those panels, and the amount of power they generate each month, will determine how much is credited to your utility bill. 

Questions to ask: 

  • How is the size of my share determined? Do I select a size or is it assigned to me?
  • If my share is based on past electric bills, does it cover my entire bill or just the electricity usage portion?
  • What if my electricity usage changes significantly and my share size is no longer congruent with my utility bill? Can I change my share in the middle of my contract?
  • Do you guarantee the amount of electricity generated by my share? If so, what happens if that amount is not reached?
  • What if my share produces more than what can be deducted from my utility bill?


TERMS OF CONTRACT

It is important to understand the terms of the contract and what you’re committing to, including the duration of the contract, what your options are, how how the utility compensation and billing works. 

Questions to ask: 

  • How long is the contract agreement?
  • Is there a penalty for early cancellation?
  • What if I move within the coverage area? Can my account be transferred?
  • What are my options at the end of the contract?
  • If the project is not yet producing power, is a deposit required to secure my spot?
  • Are there any additional fees?
  • What is the billing structure and how is my utility account credited?

Here is an example of how the compensation and billing could be structured. 

Sample: Customer has an average utility bill of $100 per month and signs up with a project offering a 10% discount on their allocation. Below is a 3 month breakdown of their usage and savings.

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OTHER THINGS TO CONSIDER

  • Who is the providing company and where are they from? If supporting local businesses is a priority to you, you may want to look for projects run by local companies rather than out of state. 


ADDITIONAL RESOURCES