What Is Community Solar?

Community solar is a shared solar energy program that allows multiple residents or businesses to benefit from a single solar installation without having to install panels on their own property. Instead of investing in rooftop solar, participants subscribe to a portion of a larger, centralized solar array and receive credits on their electricity bills for their share of the power produced. This model makes solar energy accessible to nearly half of American households and businesses that cannot install rooftop solar due to shading, roof conditions, rental status, or upfront costs.

What Is Community Solar?

Community solar—also called shared solar or solar gardens—refers to a locally-sited solar facility whose benefits flow to multiple residents, businesses, nonprofits, or other subscribers in the surrounding area. Rather than generating electricity exclusively for a single homeowner, a community solar project produces power that is distributed among dozens or hundreds of subscribers through virtual net metering.

As of 2026, the U.S. community solar market has reached 10 GW of cumulative capacity, with approximately 20 states offering formal community solar programs. Community solar is typically less expensive than rooftop installation and offers an alternative for renters, condo owners, and homeowners with unsuitable roofs.

How Community Solar Works

Community solar operates through three key mechanisms:

Solar Generation and Grid Connection

A community solar facility—ranging from a few kilowatts to several megawatts—is installed in a central location such as a rooftop, parking lot, or piece of land. The solar panels generate electricity that flows into the utility grid just like a traditional power plant would. All subscribers benefit from the same facility and share maintenance, monitoring, and operational costs.

Virtual Net Metering (VNM)

The electricity produced by the community solar facility is credited to participating subscribers’ utility accounts through virtual net metering. When the panels generate power during the day, the utility calculates each subscriber’s proportional share and applies a bill credit to their account. This credit offsets their consumption, reducing their monthly electricity bill. VNM is the billing mechanism used in most states and allows subscribers to benefit from solar power even though the panels aren’t located on their property.

Subscription Models

Community solar is typically offered through one of two models:

• Subscription Model: Subscribers pay a monthly or annual fee to lease a share of the solar array. This can typically be cancelled with minimal notice and is ideal for renters or those hesitant about long-term solar commitments.
• Purchase Model: Subscribers own panels in the remote solar array. This is less common in most states but offers a clearer path to ownership and potential incentives in certain regions.

Who Can Benefit from Community Solar?

Community solar is designed for customers who cannot install rooftop solar panels. This includes:

• Renters and Condo Owners: Those who don’t own their roofs and cannot install permanent fixtures.
• Homeowners with Shading Issues: Properties shadowed by trees, buildings, or terrain unsuitable for rooftop panels.
• Low- to Moderate-Income Households: Customers who cannot afford the upfront investment in rooftop solar, even with the 30% federal Investment Tax Credit (ITC).
• Businesses: Small commercial properties, nonprofits, and organizations looking to reduce electricity costs without rooftop installation.
• Homeowners with Roof Constraints: Properties with aged roofs, unusual architecture, or structural limitations that make rooftop solar impractical.

According to the U.S. Department of Energy, nearly 50% of American households and businesses cannot host rooftop solar systems due to one or more of these constraints.

Pros and Cons of Community Solar

Advantages

• No Upfront Installation Cost: Unlike rooftop solar, there is no expensive installation, equipment, or permitting required. Subscribers simply sign up.
• Lower Electricity Bills: Subscribers typically save 5-15% on electricity costs, depending on state net metering policies and electricity rates.
• Accessibility: Ideal for renters, condo owners, and those with unsuitable roofs who otherwise couldn’t use solar energy.
• No Maintenance Burden: The solar facility operator handles all cleaning, maintenance, repairs, and monitoring.
• Flexibility: Subscription-based programs allow customers to cancel with minimal or no penalty, unlike long-term rooftop installations.
• Environmental Impact: Subscribers reduce their carbon footprint by using clean, renewable energy without the upfront investment.

Disadvantages

• No Federal Tax Credit: Unlike rooftop solar installations, community solar subscriptions do not qualify for the 30% federal Investment Tax Credit (ITC) that runs through 2032. This credit applies only to owned residential solar systems.
• Long-Term Savings Uncertainty: The financial benefit depends on stable electricity rates and continued participation in the program.
• Limited Availability: Community solar programs exist in only ~20 states with formal frameworks, making it unavailable in many regions.
• Subscription Fees: While lower upfront, monthly fees can add up over time, and some programs charge signup or cancellation fees.
• Bill Credit Variation: The value of bill credits fluctuates based on state net metering policies, wholesale electricity rates, and utility tariffs.
• Waiting Lists: Popular community solar projects often have lengthy waiting lists due to limited capacity.

Community Solar vs. Rooftop Solar

The choice between community solar and rooftop installation depends on your property, finances, and long-term goals:

How to Sign Up for Community Solar

Step 1: Check Program Availability

Visit your state’s energy office or search for community solar programs in your area. Only about 20 states have formal, established programs. Check whether your utility offers a program or if there are third-party providers operating in your region.

Step 2: Verify Eligibility

Confirm that your address is within the service area of a nearby solar facility. Many programs have geographic boundaries and may have waiting lists during peak periods.

Step 3: Review Terms and Costs

Compare subscription fees, guaranteed bill credits, contract length, and cancellation policies. Best practices include:

• Minimum 20% annual electricity savings guarantee
• No signup, termination, or exit fees
• Clear, transparent billing
• Month-to-month or annual terms (not multi-year locks)

Step 4: Enroll

Complete enrollment online or by phone. You’ll be assigned a share of a solar facility and begin receiving bill credits within 1-3 months, depending on the program.

Community Solar Costs and Savings

Typical Monthly Costs

Community solar subscription fees vary by state and provider but typically range from $0 to $50 per month, with some programs charging a flat annual fee ($100-300) instead. Low-income subscribers often receive reduced rates or free participation through income-qualified programs.

Expected Bill Savings

Subscribers typically save 5-15% on electricity bills. The exact amount depends on:

• Your local electricity rates
• The solar facility’s production efficiency and capacity factor
• Your state’s net metering policies and avoided cost rates
• Seasonal variation in panel output (higher in summer, lower in winter)

Long-Term Economics

Unlike rooftop solar with an upfront purchase price, community solar savings accrue over time through reduced monthly bills. Most programs break even on subscription fees within 1-2 years, with additional savings for the remainder of your subscription. However, without the 30% federal ITC available to rooftop solar, payback metrics differ significantly.

State-by-State Availability

As of 2026, approximately 20 states have formal community solar programs. Major markets include:

• Northeast: New York, Massachusetts, Connecticut, New Jersey
• Midwest: Minnesota, Illinois, Wisconsin
• Mountain States: Colorado, Utah
• West: California, Oregon, Washington
• Southeast: North Carolina, Virginia

Programs vary significantly in size, subscription terms, savings guarantees, and income-qualified benefits. Check your state’s public utilities commission or energy office for current offerings and waitlists.

Frequently Asked Questions

Does community solar affect my ability to install rooftop solar later?

No. Cancelling a community solar subscription does not impact your eligibility for future rooftop solar installation. However, if you have rooftop solar and also subscribe to community solar, your utility’s net metering rules may limit bill credits. Consult with your utility before combining both.

What happens if the solar facility is damaged or underperforms?

Community solar operators carry insurance and are contractually obligated to maintain the facility. If a facility is permanently decommissioned, subscribers are typically transferred to another facility or their contracts are cancelled with a refund. Underperformance due to weather or seasonal variation is normal and factored into savings projections.

Can I transfer my community solar subscription if I move?

In most cases, subscription-based community solar does not transfer when you move. You would cancel your subscription and enroll in a new program at your new address if one is available. Some utilities offer exceptions for moves within the same service territory. Purchase-based models may allow transfer if the new property is within the facility’s service area.

Is community solar different from a solar cooperative or buying group?

Yes. Solar cooperatives typically involve community members jointly owning a facility, whereas community solar is a subscription model where the operator owns and maintains the array. Buying groups aggregate purchasing power for rooftop installations, which is a different product altogether.

How is my share of community solar production calculated?

Your share is based on the size of your subscription (kilowatts subscribed) divided by the total facility capacity. If you subscribe to 5 kW of a 500 kW facility, you own 1% of the output. Monthly credits are calculated proportionally based on the facility’s actual monthly production.

Summing Up

Community solar democratizes access to renewable energy by allowing renters, condo owners, and homeowners with unsuitable roofs to benefit from solar power without installation costs or maintenance responsibilities. While subscribers typically save 5-15% on electricity bills and avoid the 30% federal Investment Tax Credit that applies to rooftop solar, community solar offers unmatched accessibility and flexibility for those who cannot install panels at home.

As the market continues to mature and expand into new states, community solar will remain a critical pathway to solar adoption for nearly half the U.S. population unable to host rooftop systems. The choice between community solar and rooftop installation depends on your property constraints, financial situation, and long-term homeownership plans.

If you’re evaluating solar options for your home and want to understand whether community solar or rooftop installation makes more sense for your situation, call Solar Panels Network USA at (855) 427-0058.

Updated May 2026