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What is Community Solar? A Guide for Property Owners

April 25, 2024

Community solar offers a new path for Americans to take advantage of community solar. For property owners with suitable acreage, it can also provide lucrative monetary benefits.

According to a study by the National Renewable Energy Laboratory (NREL), over 50 percent of Americans who want to adopt solar energy cannot do so due to limitations on their property. Whether it be renters who don’t own their building, a lack of suitable roof space, or the financial burden of installing a solar configuration, potential solar customers are prevented from utilizing this clean energy source. Community solar offers a viable alternative, especially for low-income renters and households.

As a property owner, your land or rooftop may offer a unique opportunity not only to provide solar energy for your neighbors, but also to generate a passive income stream. By partnering with developers, doing so incurs little risk and few costs.

Is community solar the right option for you? Explore our guide for property owners considering utilizing their land for solar energy, the benefits of a community solar installation, and answers to frequently asked questions.

What is Community Solar?

Community solar is a type of solar configuration that allows local households and businesses to benefit from the reduced costs and energy efficiency of solar energy without installing, owning, or operating equipment. 

A third-party developer is responsible for planning, constructing, and operating the solar configuration development for the property owner whose site the community solar garden is established on. In exchange for the use of the land or rooftop, they receive monthly lease payments.

Hosting a community solar garden allows you to utilize unused land or rooftop as a “solar crop.” Once operational, the electricity generated by the solar garden is fed into the local utility grid. Residential and commercial subscribers can then purchase a share of the solar garden’s output, receiving credits that reduce their monthly electric bills. The property owner can also take advantage of the more affordable electricity generated on their land or rooftop. 

In short, community solar allows you to earn a lucrative stream of passive income while supporting clean energy initiatives – all without managing the solar energy system itself.

Choosing Community Solar over Self-Ownership

Is owning your own solar energy system a better option than community solar?

Installing a community solar garden on your property has a different use case than a homeowner who might install solar panels on their rooftop. For these homeowners, the solar energy that they generate is primarily intended for their own personal use. While some homeowners can sell excess energy back to the utility company, the primary draw for this configuration is lowering electricity costs. These homeowners are also responsible for the fees incurred with installing, owning, and operating the solar panels. Installing solar panels can be expensive, and maintenance and repair costs fall on the homeowner.

Property owners who are interested in developing community solar systems are essentially leasing their land or rooftop and installing solar panels owned by a third party. While they can partake from the community solar system by subscribing to it and receiving discounted electricity, the primary benefit comes from the predictable, recurring payments from leasing their land or rooftop. They also take on none of the financial obligations of solar ownership.

Is My Property Suitable for Community Solar?

Community solar can be an excellent asset for your property, but is it suitable for your location?

A community solar project needs to be built within close proximity to utility infrastructure. These projects require close access to utility power lines so that the electricity generated can be delivered to local residents and businesses.

Second, for non-rooftop installations, the land on which solar installations are built is critical for a project’s viability. Flat land, ideally with no inclines, is best suited for these projects. Federal restrictions also restrict the development of these projects near wetlands or 100- and 500-year floodplains.

Finally, the amount of space itself is a critical factor in determining a project’s viability. For every megawatt of solar energy, 4 to 6 acres are required. Generally speaking, the more open space that is available, the better.

It may surprise you that community solar gardens can be developed in regions with overcast weather. Thanks to advancements in solar panel technology, abundant sunshine isn’t required to generate electricity, contrary to public perception.

According to the SEIA, community solar gardens currently exist in 41 states, as well as D.C. Of those, 19 states have developed policies and programs to spur their growth. Community solar is a viable option for many property-owners across the U.S., provided that their location is suitable for its development. Best of all, it can offer new value to sites that are typically unsuitable for use, such as land fills or arid environments.

Does Installing Community Solar Lower My Property Value?

Numerous studies have shown that clean energy projects do not reduce local property values. According to property valuation research from CohnReznick, community solar has not been shown to negatively impact the short- or long-term value of a property or adjacent properties.

Community solar developers carefully locate and design projects to minimize the impact on land and residences. Solar panel installations are between 8 and 12 feet high, giving them a low profile that does not affect the look of the surrounding landscape. Unlike wind turbines, solar panels do not create any sound, and contrary to popular belief, they do not create glare. The environmental impact is negligible, as they generate no air, ground, or water pollution.

Installing community solar on your property is a low-impact, high-value addition, especially for unused plots of land or rooftops that generate no revenue on their own.

Get Started With Community Solar

Is your property suitable for a community solar installation? Catalyze can help! We work closely with landowners, farmers, and local communities to develop clean energy projects that benefit everyone.

Our team can help assess the viability of your property for community solar, allowing you to see solar lease rates of up to $50,000. From planning, permitting, installing, and maintaining a community solar configuration, we help every step of the way to ensure you can benefit from unused land or rooftops while supporting your local community. Contact our team to learn more.

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