What are the best community solar incentives?

Good news and bad news: today’s solar incentives are among the most consumer-friendly we’ve ever seen. The bad news? Most aren’t available to community solar subscribers. 

These solar incentives are designed to reduce the upfront investment of installing a solar panel system. Since community solar subscribers aren't the ones making this investment, they can't claim the incentives directly.

To be fair, though, taking part in a community solar project itself is already a win-win. If you live in an area with community solar options, there aren’t many barriers to entry. Signing up is easy and free, there’s no need to install anything on your property, and most programs allow you to cancel your subscription at no cost. It’s a low-risk, low-hassle way to enjoy solar benefits. 

Although community solar subscribers don’t qualify directly for most solar incentives, you still benefit indirectly. Here’s a look at the top solar incentives that can reduce the cost of community solar subscriptions.

Net metering is arguably the best solar incentive out there. It’s a billing mechanism that allows solar owners to receive credits for the excess power their solar panels produce, boosting the value of their solar investment. Traditional net metering is limited to solar owners, but thanks to virtual net metering, you can still reap these financial benefits as a community solar subscriber. 

Here’s how it works: 

• Your local community solar farm produces solar power and feeds that electricity to the utility grid. 

• At the end of each billing period, the power your portion of the solar farm produces is credited to your utility bill.  

• These credits reduce your monthly electricity costs, thanks to virtual net metering. 

Community solar subscribers don’t own the equipment or even the electricity generated at the solar farm. Rather, subscribers purchase the bill credits associated with the solar electricity generated by their share of the solar farm. Virtual net metering enables this transaction.

Given that community solar subscribers don’t own solar panel systems, they typically can’t claim incentives like the federal solar tax credit or solar renewable energy certificates (SRECs). Instead, these incentives go to the solar farm owner, which is often a solar developer or community solar company.

But that doesn’t mean you don’t benefit as a community solar subscriber. In many cases, these incentives are reflected in your community solar bill as a cost reduction; incentives lower the project cost for the owner, which often translates to a lower community solar bill for you.

Federal solar tax credit (also known as the ITC)

The federal solar tax credit, also known as the Investment Tax Credit (ITC), allows solar owners to claim 30% of solar installation costs as a federal tax credit. For large-scale solar projects like community solar farms, the ITC can save project owners hundreds of thousands of dollars. In turn, your community solar credits may come at a lower price.

Solar renewable energy certificates (SRECs)

Solar renewable energy certificates (SRECs) refer to a performance-based solar incentive that allows solar owners to earn additional income from selling renewable energy certificates (RECs). In states with SREC programs, the solar farm owner can sell SRECs based on the farm’s electricity production. This added revenue can help them lower the cost of community solar subscriptions.

Utility benefits of community solar

Community solar isn’t just beneficial for subscribers—it also supports utility companies. Here’s how community solar aligns with utilities’ goals:

• Renewable portfolio standards (RPS): Many utilities are required to meet specific renewable energy targets, known as renewable portfolio standards (RPS), which mandate sourcing a portion of electricity from renewables like solar. Community solar projects help utilities achieve these RPS requirements.

• Grid stabilization: Utilities can strategically site community solar solar farms in areas with fewer generators connected to the grid. This improves grid stability, reducing maintenance and repair costs for utilities.

While you may not be able to directly access most solar incentives as a community solar subscriber, the program itself is pretty enticing: you get to save money on your electricity bills while supporting clean energy, and it comes at little to no upfront cost. Plus, signing up only takes a few minutes. 

With EnergySage, enrollment is as easy as entering your zip code and utility company to view community solar projects with available spots in your area. If no spots are currently available, you’ll be placed on a waiting list and notified as soon as openings or new projects arise. 

If community solar isn’t yet available in your area, you can sign up for notifications to hear about upcoming projects.