Take Advantage of Solar Power ‘Grown’ Nearby

Sometimes it takes a village to generate solar power.

Community solar farms are cropping up around the country. Households can connect to these fields of solar panels, giving them access to enough energy to power their homes and charge their electric cars.

Participants pay a subscription to the solar farm based on the amount of electricity they use, which in turn earns them credit toward their electric bill. The power is then exported to the electrical grid and distributed by the local utility company.

Emily Walker, director of content and insights at EnergySage, a company that matches people interested in using alternative energy sources with providers, explained how community solar farms work, how they can save people money and how to encourage their growth.

What are the biggest advantages to signing up with community solar? Are there any disadvantages?

Walker: The main advantages of community solar include saving between 5% and 15% annually on electric bills, its accessibility to renters and homeowners otherwise unable to install solar panels at home, and, of course, supporting local renewable energy efforts without installing any equipment. It also typically does not require any upfront costs — you only need an electric bill to participate. Unfortunately, community solar isn’t available in every state yet. While it cuts energy costs for participants, its savings are lower compared to rooftop solar panels. Also, participants won’t qualify for solar incentives like tax credits since they don’t own the panels themselves.

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Will you be able to access enough energy to supply your home and a home charger for an EV?

Walker: Yes, community solar subscribers can generally adjust their share size to accommodate increased electricity needs, such as adding an EV charger or switching to heat pumps. A typical EV requires about 4,000-5,000 kilowatts annually, which can be factored into your community solar subscription when discussing allocation with your provider.

What are some things people should know before considering connecting?

Walker: Before connecting, understand that you’ll likely receive two separate bills — one from your utility company and one from your community solar provider. You should also check cancellation terms and applicable fees, verify if you can transfer your subscription when moving and determine if there are credit score requirements, as some providers require minimum credit scores. Also, note that project locations and expected launch dates vary, which affects when you’ll start seeing savings. Many projects need to reach a certain baseline of subscribers before construction begins.

Are there tax incentives for a homeowner to join a solar community? How about companies starting them?

Walker: As a community solar subscriber, you typically cannot claim residential tax incentives, like the federal investment tax credit, since you don’t own any part of the solar farm. However, the developers and companies starting community solar projects can benefit from the federal tax credit, currently worth 30% of system costs, and may qualify for additional incentives if using U.S.-manufactured equipment or building in energy communities, which can bring costs down for subscribers as well.

How do you find a community solar project?

Walker: You can find community solar projects by entering your ZIP code in the EnergySage Community Solar Marketplace to see available projects in your area. Then, you can compare project details like estimated savings, cancellation policies, billing info, environmental impact and location.

If there are none in your area, how can you get one started? Do you first approach a local utility company?

Walker: First, check if your state has legislation enabling community solar farms. Non-regulated or municipal utilities may develop their own programs in states without such legislation, so contacting local utilities about potential projects is a good next step. Different ownership models exist, including utility-owned, third-party developer models, or special purpose entities where community members form an LLC. You can also reach out to your state officials to encourage legislation to enable community solar.

If you live in a state that enables community solar, but there are no projects available in your region, it’s worth contacting your local officials to encourage development in your community.

Why have utility companies been slow to adopt this?

Walker: Utility companies have been cautious about community solar adoption due to concerns about grid management challenges, potential revenue loss from traditional electricity sales and the administrative complexity of managing virtual net metering, which requires transparent, nondiscriminatory utility rules on siting and interconnection. Some utilities also have existing infrastructure investments they’re still recouping.

AAA members can receive access to a dedicated EnergySage Energy Advisor and save between 20% to 30% on the total cost of a solar system compared to the market rate. Learn More.

AAA’s Recommendation: Whether you own an electric vehicle or a gas-powered car is up to you – and you should consider lots of factors in making that choice. No matter what type of vehicle you’re choosing, we recommend visiting a dealership, test driving one, and asking as many questions as possible to make an informed decision.