Will joining a community solar garden save you money – or foster ‘community’?
Reading Time: 5minutes Don’t have a roof of your own to put solar panels on? So-called community solar gardens have begun to appear in many states across the USA, promising to make it easy to go solar even if you don’t have anywhere to put your panels. ‘Community solar’ has created quite a buzz as the number of solar garden projects has grown. But we here at EnergySage argue that participating in a solar garden only makes sense if you’re benefitting in some way: whether that be saving money on your power bill, or possibly just knowing that you’ve helped your community take a step towards energy independence.
Community solar gardens: How to go solar without a roof
EnergySage has published a number of articles on the topic of community solar power. You access them with the links below:
Community solar following the lead of rooftop solar
How rooftop solar has changed:
It is only within the last few years that rooftop solar power has come into the mainstream. Until just a few years ago, solar panels were seen as technology with only niche applications (think: satellites and digital calculators). It was too expensive for anyone besides wealthy idealists to even consider as an option for powering a home. The situation has changed significantly, however: Rooftop solar panels are now widely recognized as a great way to save money on your power bills and generate clean electricity – all while still being connected to the electricity grid. As time goes on, solar’s value proposition is only expected to improve further, as solar equipment continues to become more affordable and as grid electricity prices rise. Furthermore, financing options like zero-down solar leases / power purchase agreements (PPAs) and solar loans mean that virtually anyone with a roof can go solar – even if they don’t have cash in the bank to purchase a system outright.
How community solar will follow:
Community solar gardens are now following a trajectory similar to that of rooftop solar – and they are ready to go mainstream. Originally, a community solar garden would be conceived and developed by a local community that wanted to generate its own electricity, mainly for environmental reasons. With these first community solar projects (one of the first being Massachusetts’ Harvard Solar Garden), saving money was not necessarily the primary goal of the participants. In fact, many community solar garden members faced the prospect of never recovering their investments – solar power was still expensive and grid electricity was cheap. This wasn’t an issue, however, because those who signed up did not do so for financial reasons: These were communities banding together in the fight against climate change and for greater energy independence. But these days community solar is headed the way of rooftop solar: The main players are no longer local communities hoping to make the world a better place. Instead, in many states companies are taking the initiative to develop solar gardens themselves, and then selling or leasing ‘shares’ in these projects to local residents. Just as is the case with rooftop solar system prices, community solar prices are on the decline, mainly because equipment prices (primarily solar panels & inverters) are coming down. And just as having a rooftop solar system installed will ideally save you money on your power bill, so should joining a community solar garden. This is to your benefit as a solar shopper: More companies being in the game means more competition – and more choice for you. Depending on which state you live in, you may already be able to choose from a variety of community solar companies, all of which have different pricing models and promise varying degrees of savings. The thing to remember is this: These companies are looking to make a profit, and are competing with each other for your business. Given that the environmental benefits are roughly the same regardless of the solar company or solar equipment that you choose, you should opt for the one that will deliver the greatest value for you.
Will joining a community solar garden actually save you money?
Not all community solar gardens are created equal. Some offers are better deals than others. The more competition there is between community solar providers in your area, the more likely you are to be able to find an offer that saves you money. In contrast, the fewer providers there are (some local utilities may only have one community solar project), the less likely you are to find a deal that truly offers value to you. In fact, a few of the programs we uncovered in our research had solar rates that were higher than utility electricity rates – evidently hoping to target those who want to pay a premium to ‘go green’. The big questions you should be asking yourself if you’re looking into community solar are:
If you are purchasing a share in a solar garden: Whether or not it is a good investment – what are the payback period and return on investment? If the initial cost is too high, your investment may not pay itself off in a reasonable amount of time (e.g. under 10 years).
If you are considering leasing your share of the solar garden (a ‘subscription’): Whether your monthly payments will save you money now, in the future, or never.
Looking for community in your community solar garden? It might be wise to look elsewhere
But what about your community? After economics, this is arguably the most important factor in deciding whether to sign up for a particular community solar garden offer. You may come across any of four options as you shop around for a community solar project. Each one offers a different degree of community.
Locally-initiated and developed grass-roots community solar gardens: Projects of this nature may or may not save you money, but they will usually do the best job of fostering community and delivering the sense of satisfaction to members. Grant money may be available for those who wish to pursue this avenue.
Locally-initiated but professionally developed solar gardens: A local community may be able to reach out to a professional community solar garden developer to save them time and money and avoid red tape.
Community solar projects through a local electrical co-op. Projects of this nature are less grassroots but still very local – they may be a special project undertaken by your local utility (many community solar projects are initiated by regional electricity co-ops).
Community solar projects initiated by an outside company for their own profit. These kinds of projects have the least to do with community but – provided the market is competitive enough – could offer attractive savings or return on investment.
Unless you know that the project is a grassroots initiative started by or managed by your community, it’s unlikely that ‘community’ will have much to do with what you sign up for in the end, regardless of how it is marketed. This doesn’t necessarily make it a bad thing – after all, you may be willing to pay more to say that your electricity comes from solar panels. But it is important that you are clear about what you will be getting.