Community Solar Explained: How Shared Solar Works
Updated April 2026 · PlainSolarData Editorial
Key Takeaway
Community solar (also called shared solar or solar gardens) lets you benefit from solar energy without installing panels on your own roof. You subscribe to a portion of a larger off-site solar project and receive credits on your electricity bill for the energy your share produces. Over 40 states now have at least one community solar project, and the model is growing rapidly — especially for renters and homeowners with shaded or unsuitable roofs.
What Community Solar Is
Community solar is a model where multiple electricity customers share the output of a single solar installation — typically a ground-mounted array ranging from 1 to 5 megawatts located somewhere in the same utility service territory. Each subscriber owns or leases a portion of the project's capacity and receives bill credits proportional to the electricity their share generates.
The concept addresses one of rooftop solar's biggest limitations: most Americans cannot install panels. Renters, condo owners, people with shaded roofs, and those who cannot afford or do not want rooftop systems are all excluded from traditional residential solar. Community solar removes the roof from the equation entirely.
The U.S. Department of Energy estimates that community solar could reach 26 million households — nearly five times the current number of residential rooftop solar installations — if regulatory and market barriers continue to decrease.
How the Subscription Model Works
Most community solar programs operate on a subscription model with three key components:
- You subscribe to a share. You sign up for a portion of a solar project — typically sized to offset 50% to 100% of your annual electricity usage. Your share is measured in kilowatts (kW) of capacity or a percentage of the project's total output.
- The project generates electricity. The solar array produces power and feeds it into the grid. Your utility tracks how much energy your share generates each billing period.
- You receive bill credits. Your utility applies credits to your electricity bill based on your share's production. You continue to receive a normal utility bill, but the credits reduce the amount you owe. If your share produces more than you use in a given month, excess credits typically roll forward.
The subscription fee — what you pay the project developer — is typically lower than the bill credits you receive, resulting in net savings. For example, if your share generates $100 in bill credits and your subscription costs $85, you save $15 that month.
States with the Strongest Programs
Community solar availability varies significantly by state. States with enabling legislation, clear interconnection rules, and virtual net metering policies tend to have the most active markets:
- Minnesota — The first state to establish a comprehensive community solar program (2014). Over 800 MW of community solar installed, one of the largest markets in the country.
- New York — NYSERDA's community solar program has driven rapid growth, with thousands of projects across the state. Strong low-income participation requirements.
- Massachusetts — SMART program includes community solar. The state has been a leader since 2017 and continues to expand capacity.
- Colorado — Xcel Energy's community solar garden program is well-established, with projects serving both residential and commercial subscribers.
- Illinois — The Illinois Shines program (from the Climate and Equitable Jobs Act) has expanded community solar access with strong equity provisions.
- New Jersey, Maryland, Maine — All have active or recently launched community solar programs with growing subscriber bases.
Check your state's solar data page on PlainSolarData for current policy details and incentive information that may affect community solar availability in your area.
Community Solar vs. Rooftop Solar
The right choice depends on your situation. Here's how they compare on the factors that matter most:
| Factor | Rooftop Solar | Community Solar |
|---|---|---|
| Upfront cost | $15,000–$30,000 (before ITC) | $0 in most subscription models |
| Savings potential | Higher long-term (you own the asset) | Lower (5%–15% bill reduction) |
| Home ownership required | Yes | No |
| Roof suitability needed | Yes | No |
| Federal ITC eligible | Yes (30%) | Depends on ownership model |
| Maintenance | Homeowner responsibility | Developer responsibility |
For homeowners with good roofs and available capital, rooftop solar typically delivers higher lifetime savings because you own the asset and capture the full value of production. For everyone else — renters, shaded homes, condo dwellers, or those who prefer zero upfront cost — community solar is a practical way to access solar savings immediately. Use our solar ROI calculator to evaluate rooftop economics for your specific situation.
What to Look for in a Community Solar Program
Not all community solar offerings are equal. Before subscribing, evaluate these factors:
- Guaranteed savings rate: Is the discount fixed (e.g., "10% off your bill") or variable? Fixed discounts provide certainty; variable rates can be better or worse depending on utility rate changes.
- Contract length and cancellation terms: Month-to-month is ideal. Long-term contracts should offer portability (transfer to a new address) and reasonable exit clauses.
- Credit mechanism: Understand exactly how credits appear on your utility bill. Virtual net metering credits should reduce your bill at the full retail rate; some programs credit at a lower avoided-cost rate.
- Developer reputation: Look for established developers with operating projects. Check reviews and verify the project has utility interconnection approval.
- Low-income provisions: Many states require community solar projects to reserve a portion of capacity (often 20%–40%) for low- and moderate-income subscribers, sometimes at enhanced discounts.
Frequently Asked Questions
Can I participate in community solar if I rent my home?
Yes — this is one of the primary advantages of community solar. Renters, condo owners, and anyone who cannot install rooftop panels can subscribe to a community solar project and receive credits on their electricity bill. You do not need to own property, have a suitable roof, or make any physical modifications to your home. The only requirement is that you are a utility customer in the same service territory as the solar project.
How much can I save with community solar?
Most community solar programs advertise savings of 5% to 15% on your electricity bill. The savings come from the difference between the credit rate you receive for your share of the solar production and the subscription fee you pay the project developer. Some programs guarantee a fixed discount (e.g., 10% off your bill); others provide credits at a variable rate tied to the utility's retail rate. Actual savings depend on your utility rates, the project's pricing structure, and how much of your usage your subscription covers.
Is there a long-term contract commitment?
It varies by program. Some community solar subscriptions are month-to-month with no cancellation penalty. Others require 12- to 24-month commitments. A few programs — particularly those offering the largest discounts — may have longer terms (up to 20 years) that resemble a power purchase agreement. Read the contract terms carefully before subscribing, and look for early cancellation clauses. If you move within the same utility territory, most programs allow you to transfer your subscription to a new address.
What happens to my subscription if the solar project underperforms?
In most subscription models, you only pay for or receive credits for the actual energy your share produces. If the project generates less than projected due to weather, equipment issues, or maintenance, your credits decrease — but so does any production-based fee. Fixed-discount programs may handle underperformance differently, as the developer absorbs the risk. Check your agreement for performance guarantees and what happens if the project is decommissioned.
How is community solar different from buying renewable energy certificates (RECs)?
Community solar delivers direct bill credits based on actual electricity generated by a specific local project. RECs are tradable certificates that represent the environmental attributes of renewable energy but do not reduce your electricity bill. When you subscribe to community solar, you receive tangible financial savings through reduced utility bills. When you purchase RECs, you support renewable energy but continue paying your full electricity rate. Community solar also generates power locally, within your utility's service territory.
Sources: U.S. Department of Energy — Community Solar; National Renewable Energy Laboratory (NREL) — Community Solar Market Reports; Database of State Incentives for Renewables & Efficiency (DSIRE); state utility commission filings.
Program availability, savings rates, and subscription terms vary by state, utility, and project. Verify current offerings with your utility or community solar provider. This guide is for informational purposes only.
