The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Bringing Solar to the Masses: Community Shared Solar Gains Popularity Nationwide

There are a lot of Americans who would love to get their energy from solar, but can't. They live in apartments and condos and don't own their rooftop. Or they do own a home or business, but really like the old oak tree that shades their roof. The National Renewable Energy Laboratory (NREL) estimated that 75 percent of American residential buildings have physical restrictions to going solar. Other building owners may have a suitable roof but for a variety of reasons may not want to commit to having a solar system installed on their own property. By limiting ourselves to the traditional "panels on your roof" approach to PV, we are leaving a tremendous amount of solar potential on the table.

Enter community shared solar, an emerging model that expands participation in the solar energy market.  Here’s how it works: Residents and businesses sign up to contribute to a local solar project in exchange for a credit on their utility bill or other compensation. Participants may own, lease, finance, or subscribe to their “interest” in the project.  They get the bill saving and environmental benefits of going solar without the requirement that it be physically located on their own property. A community shared solar system might be as small as 200-kW on the roof of a local grocery store or as large as a 20-MW system on an old brownfield.  

The appeal of the community shared solar model is multi-fold:

  • It’s inclusive. It gives essentially all energy customers the opportunity to invest in solar energy at an affordable level. This makes for more equitable access to clean energy. It also means solar developers can access enormous untapped consumer spending.  
  • It’s efficient. Projects can be located so as to maximize energy production and minimize costs to participants. Developers are not restricted to a particular rooftop that may not have the sunniest conditions, or faced with the hassle of siting transmission over hundreds of miles.
  • It’s local. Although they’re not serving a single energy customer, shared solar projects can still be built within that customer’s community — which means the jobs, environmental and public health benefits also stay local. Not to mention you can drive by and look at the solar system you helped build, maybe even bring your kid’s 3rd grade class to visit it.

It all sounds like a no-brainer for expanding the solar market, but the devil is of course in the details of policy and program design. While shared solar programs can technically be set up without new legislation, the pioneers who have attempted projects have gone through years of legal fees and complex financial structuring to make it work.  Solar rules and regulations have largely been designed to support on-site generation. Rethinking that relationship between the solar energy system and its “owner” requires rethinking those rules of the road. 

Several states have passed laws designed to make it easy for consumers to participate in shared solar and lower transaction costs for all involved. To date, shared solar program designs have come in many flavors, some more scaleable than others. The frameworks in Colorado and Delaware are generally viewed as having the most MW potential.  California, Massachusetts, Maine, Rhode Island, Vermont, and Washington also have existing programs but have restrictions in system size cap, number or type of participants or financial structure that limit potential. There is promising new legislation in the works in California (SB 843), Maryland (SB 595), and the District of Columbia.

The Interstate Renewable Energy Council’s Community Renewables Model Rules lay out key features states should incorporate in their rules to help take community shared solar mainstream:

  • Allocate the benefits of the solar project to participants via virtual net metering, a billing arrangement in which a credit based on the energy produced by a solar system can be applied to multiple retail electric accounts. This is a simple way for participants to receive project benefits that is linked to their current energy consumption and avoids income tax issues that would arise if project developer were to just cut a check to a participant. 
  • Have a utility handle the billing. Utilities have the experience and systems required to manage complex customer billing. This doesn’t mean the utility has to own the solar system or manage subscribers; in many cases it makes sense for the owner/program manager to be a third party developer.
  • Rather than compensating participants by directly offsetting kWh on their electricity bill, assign a monetary value to the kWh and give participants a bill credit. This is important to simplify billing, although choosing a method for calculating the bill credit has been one of the biggest challenges for those designing shared solar programs.  IREC’s model rules recommend a credit at full retail rate.  Some utilities argue that offsite shared solar projects use distribution lines to deliver solar energy to participants, and therefore some distribution costs should be deducted from the bill credit. The states with existing shared solar laws have handled this issue in different ways. Bill credit calculation is a complex issue, and careful analysis is needed to inform conversation at the legislative and PUC levels.

With a flurry of action at legislatures and utility commissions across the U.S. this year is likely to be a tipping point in terms of awareness of the shared solar concept. That new attention will no doubt spur innovation and interest that further evolves this still-nascent approach to solar. Three things to keep in mind as shared solar gains momentum:

Utility ownership: Utilities are increasingly interested in shared solar as a way to satisfy their customers’ desire for solar energy. Many credit Sacramento Municipal Utilities District with developing the first shared solar program, known as SolarShares.  Now major investor-owned utilities like SDG&E are introducing their own shared solar programs. This is a positive sign, as long as shared solar programs are not used as justification for ending programs that support on-site solar installations. Shared solar is not a replacement for residential rooftop solar. Nor should utility involvement preclude third-party ownership of shared solar systems. A robust marketplace that harnesses the competitive forces of multiple participants can help deliver cost efficiencies for all.

Schools and churches: I’m not sure that this is where the trend is headed, but I’d suggest it should be. Schools and places of worship make ideal shared solar hosts for numerous reasons. They are likely to have suitable sites for solar generation, and come with built-in pools of potential subscribers in students' parents and parishioners. They also represent an educational opportunity to introduce people who might not otherwise be interested to the benefits of solar energy. If the solar industry can tap into these broad demographics it will have enormous positive ripple effects throughout the country.  

Unbridled innovation: Consider what might be possible if the shared solar concept were expanded to include non-local projects, or if a new way of distributing shared solar benefits to customers for could replace traditional utility billing. Giving consumers the ability to contribute whatever they can to a solar project and receive whatever form of compensation best suits them, with the lowest possible transaction costs — it’s a powerful idea.

By hitting a sweet spot of affordability for consumers and economies of scale for developers, community shared solar represents a path toward truly bringing solar energy into the mainstream.  

Image: Vladimir Wrangel via Shutterstock

Untitled Document

Get All the Renewable Energy World News Delivered to Your Inbox - FREE!

Subscribe to Renewable Energy World Magazine and our award-winning e-Newsletter to stay up to date on current news and industry trends.

 Subscribe Now



Evaluating the Case for Module-Level Shutdown

Hannes Knopf With 2014 NEC adoption in full swing, many are anticipating what the next version of the code will hold for the PV in...

A Case Study in Energy-Transition Momentum

Tim King South Australia is clearly at the forefront of the global energy transition as it establishes a fast-moving model oth...

Listen Up: Can I Get Solar if my Roof is Shaded?

The Energy Show on Renewable Energy World Rooftop solar panels only work when they are in direct sunlight. So if you have a partially shaded roof, the output o...

US Senate Democrats Unveil Energy Bill That Restores PTC and Extends ITC

Brian Eckhouse, Bloomberg Senate Democrats unveiled a bill that would provide more tax credits for renewable energy while killing some tax ince...

PRESS RELEASES Welcomes Jennifer Delony as Associate Editor

PennWell Corporation is pleased to announce that Jennifer Delony has joined the company...

Customized Energy Solutions Executes Agreement with the Massachusetts Clean Energy Center (“MassCEC”) and the Massachusetts Department of Energy Resources (“DOER”) for Important Energy Storage Study

Customized Energy Solutions (CES) has entered into agreements with Massachusetts Clean ...

CleanTX Releases New White Paper on the Future of Texas Solar in Texas

We love this new White Paper from our clean energy partners CleanTX

Sun Xtender® Launches New Website at

The newly designed website for Sun Xtender solar batteries is now live on the World Wid...


energy efficiency

Beyond the Trend: Maximizing the Impact of Your Energy Efficiency Solution

A revolution is happening in the energy sector. From the new regulations pushed out earlier this summer by the EPA’s ...

Northeast States Create Cap-and-Trade Program for Greenhouse Gas Emissions

Northeast states have worked together for several decades to address air quality issues and, more recently, climate c...

Why the Solar PV Industry Should Love Geothermal Heat Pumps Pt 2

It’s a marriage made in heaven: Solar PV and Geothermal Heat Pumps Part 2 of a 6-Part Series Prevailing Heati...

Park District Goes Solar, Saves Big While Preserving Open Space

Not only do community parks provide green space for recreation and leisure, they also increase property values, attra...


Hannah leads our work on Shared Solar business models and new state markets. She previously managed the Solar America Cities program at the Department of Energy. She has degrees in Environmental Policy and Political Economy from UC Santa Barbara...


Volume 18, Issue 4


To register for our free
e-Newsletters, subscribe today:


Tweet the Editors! @jennrunyon



Successfully Integrating Solar: A Proactive Approach

•      What does the increasing solar penetrati...

Solar Power Asset Management and Performance

SEIA and SEPA collaborated with industry leaders to present the first ev...

Solar Power Northeast

  From the team that produced Solar Power Southeast and the sol...


Fast facts: 4 things you need to know about the state of solar fina...

Fast facts: 4 things you need to know about the state of solar financing...

10 Questions You Should Be Asking

Tony Robbins is fond of saying that the quality of your life is directly...

Join us at the New Solar Power Northeast

From the team that produced Solar Power Southeast and the sold out P...


Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now