As of the third quarter in 2023, there is 6.5 GW[1] of installed community solar capacity. Additionally, community solar projects have been deployed in 41 states and 19 states have active programs. Most of this capacity lies in three states: New York, Minnesota, and Massachusetts. In fact, regulators in Maryland and New Jersey recently approved rules for permanent community solar programs, expanding their pilot programs.
Market Status
Currently, Solar Gardens[2] is one of the largest community solar programs in the country. This program is composed of three solar farms in Michigan that generate a combined capacity of 4.5 MW.
Comparable programs are offered in other states:
- Illinois Solar for All Program
- Minnesota Community Solar Garden
- Duke Energy Florida Shared Solar Program
- Washington D.C. Solar for All Program
Implementation Issues
The implementation of community solar faces a myriad of barriers, including a lack of supportive legislation. More specifically, as of December 2021, fewer than half of the United States had enacted legislation that supports community solar. Community solar projects are also inhibited by interconnection issues that do not usually arise for other distributed solar. For this reason, it can be more difficult to finance community solar projects given uncertainty around maintaining subscriber enrollment[3].
Tax credits, like the federal investment tax credit for solar PV systems are often applied differently to community solar participants depending on the structure of the program. Variables include whether the participant owns the panels or output and if a participant claims a commercial tax credit. There is also uncertainty when a community solar participant can claim the investment tax credit[4]. Overall, the lack of guidance around tax credits greatly impacts the implementation of community solar programs.
Benefits
Based on its design, community solar projects can benefit customers and utilities by providing:
- Potential local job creation and workforce development.
- Community solar options are flexible.
- No upfront costs or system ownership.
- Reduced carbon footprint and can aid in combating climate change.
- Wider solar accessibility for all, especially if portions of projects are set aside for low-income customers.
- Renewable portfolio standard compliance through increased renewable energy generated from community solar projects.
- Household savings include resilience during blackouts or weather events.
[1] Community Solar (SEIA,2024).
[2] Solar Gardens Project Locations (Consumers Energy, 2024).
[3] National Community Solar Partnership Targets (U.S. Department of Energy, 2024).
[4] Community Solar (National Renewable Energy Laboratory, 2024)