Around 44 million houses in the US are rented taking a share of 34% of the total households. This becomes a huge disadvantage for opting for solar as solar is mostly installed on owned property. To solve this community solar was created.
What is community solar?
In residential solar, each house has its own solar panels installed on the rooftop and the households use the energy produced to power their homes. In community solar, a large central power plant is set up by the community solar project in one place and the power gets shared by people.
This makes solar available to people who still live in a rented house.
How does this work?
There are two ways you can take part in community solar.
- By investing and owing a portion of it. Or
- By subscribing to a solar project and agreeing to buy their electricity.
Each has its pros and cons.
- Ownership: By opting for ownership, you become a direct stake in the project. You gain the authority to manage and make decisions. You’re entitled to share the project’s profit and yield a return on investment for the amount invested.
Also, on top, you get to enjoy all the tax benefits given by the federal and state governments.
On the other side, the downsides are huge upfront costs and the risk of investing in the project. Meaning, if the project fails, as a stakeholder you would lose your investment.
And also, by investing you would lose the flexibility to exit the project at your convenience as you’re part owner of the project.
- Subscription: The main benefit of a subscription is no upfront cost; there is also zero risk due to zero cost involved. And you gain the flexibility to exit the project whenever you want.
On the flip side, by being a subscriber you don’t get to enjoy any federal or state tax benefits and you can’t enjoy the profits generated by the project.
States in which community solar is available
- New Jersey
- California
- New York
- Maryland
- Colorado
- Rhode Island
- Maine
- Maryland
- Illinois
Conclusion:
Overall community solar projects offer huge benefits to households, especially for rented houses. It enables their way to escape from the ever-increasing utility cost to something that is much cheaper and also reliable.
As residential solar becomes more and more popular, community solar also rises in demand as many still live in rented houses.
