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Community solar: which project should you subscribe to?

So there are a few community solar options available in your area – which one should you subscribe to? Whether you’re trying to decide between multiple community solar offers or considering just one, here are the most important questions to ask when choosing the right project for you.

Where is the project located?

Key takeaway: community solar farms help encourage local job growth and clean up a community’s electricity grid – as a result, many people prefer to subscribe to a project located nearby.

One of the best things about community solar is its direct impact on your state, town, and neighborhood: a solar farm located in your area not only provides clean, renewable electricity to your electric grid, it also employs people in your community. Because of this, many people prefer to subscribe to a project close to their home or business. And who knows – if your community solar project is close enough to your home, you may drive by it on trips around town!

How much will it cost, and how much will I save?

Key takeaway: most community subscribers save 5-10 percent on annual electricity costs. However, anticipated savings can vary depending on the subscription model and the size of your share.

Community solar costs and savings rely on two key factors: your subscription model and the size of your share (i.e. amount of bill credits you receive) from the solar farm.

Subscription model & discount rate

Most community solar subscriptions follow the same basic structure that allows you to lower your utility bills by buying electricity bill credits from a share of a solar project. However, some subscriptions offer a fixed discount on the credit you purchase, while others charge a set rate for the electricity credits – this rate is typically lower than or on par with what you already pay your utility company for electricity, and might include an annual escalator (similar to how a power purchase agreement–or PPA–functions for rooftop solar).

To break both of these options down, consider a milk delivery service (yes, these still exist): the first subscription type–a fixed discount on bill credits–would be like your delivery service offering a 5 percent discount off of the market price on each half-gallon of milk you buy throughout the duration of your subscription, regardless of when you buy it (i.e., now or in five years) or what it costs at your local grocery store. On the other hand, if your subscription is structured more like a PPA, your delivery person would charge a predetermined rate for the milk–say, $1.53 per half gallon during the first year of your subscription when the store is selling it for $1.60 (still a 5 percent discount). Your subscription might include an annual escalator rate for the price you pay: if it’s a rate of, say, 2.75 percent you’ll pay $1.57 per half gallon in year two. Meanwhile, milk prices at the grocery store will likely rise in your second year because of inflation, but you’ll pay $1.57 per half gallon regardless of how much the price of milk rose or even declined!

You can save with both types of subscriptions, but it’s easier to predict savings with a fixed discount model – savings under a PPA-type structure depend more heavily on the cost of electricity in your area, how those prices rise or fluctuate over time, and how that compares to the rate you pay for your solar bill credits.

We know, it’s a bit confusing – but fortunately, subscription models tend to be similar across a specific state’s community solar market. Because of this, you’ll most likely be comparing either fixed discount offers (typically between 5-15%) or the predetermined rates and annual escalators for solar bill credits rather than comparing cost and savings across different subscription models.

Size of share & bill offset

You can also save more or less with your community solar subscription depending on the size of your share in the solar project, how many bill credits you receive, and how much electricity you use in comparison.

Most community solar companies will aim to size your subscription share of the project to meet as close to 100 percent of your annual electricity needs as possible, but some projects may offer closer to 80 or 90 percent bill offset over the course of a year. Above all, you want to make sure that you provide any potential community solar company with accurate electricity bill (i.e., usage) information so they can size your share correctly; if your subscription share is too big, you could end up paying for solar bill credits you don’t need!

How easy is it to cancel?

Key takeaway: some community solar subscriptions are easier to cancel than others. Because of this, it’s important to review contract terms before making a decision.

In the best case scenario, you won’t need to cancel your subscription…but as we all know, life happens; it’s best to prepare ahead of time to understand the process for canceling prior to signing up.

Community solar subscriptions are much more flexible than they used to be. Many programs don’t require a long-term commitment and allow you to cancel at any time without penalty. (Editor’s note: interestingly, some contracts are structured such that the community solar program has a longer commitment to you than do to them!) However, this isn’t true across all projects – as you read through various community solar contracts, you’ll find that some subscriptions include a minimum cancellation notice or a small early termination fee.

You can read more about community solar cancellation policies in this article.

Does the community solar company have a good reputation?

Key takeaway: you want to make sure you move forward with a company that provides good customer service – while it can be hard to assess this for companies before signing up, online reviews can help you get the gist.

If you have questions about your bill credits, monthly charges, or other subscription-related topics, you want to be able to get in touch with your community solar company easily. Of course, it can be difficult to gauge the responsiveness of a customer service team while signing up, but most community solar companies have online reviews from past and current customers speaking to their reputation.

When will the project go live?

Key takeaways: many community solar companies don’t build solar farms until the project is almost fully subscribed to. If you want to start taking advantage of community solar sooner rather than later, look for projects that are closer to completion. 

Is your potential community solar project up and running, or did the developers just begin construction? A lot of community solar companies sign up subscribers and fill projects before a project is live, so you could be waiting a few months to receive bill credits months after signing up for community solar.

As you’re comparing options, keep an eye out for each project’s “go live” date – this can give you some sense of when you’ll start seeing community solar savings.

Are there any promotions available for new subscribers?

Key takeaways: certain community solar companies offer limited-time promotions for new subscribers – but don’t expect this from every company!

Some community solar companies offer special, limited-time promotions for new subscribers joining their farms. When available, these offers differ by company and project – some might give you a $100 gift card after you sign up, while others might provide an additional discount off your first utility bill with community solar. This isn’t something you should expect to find with every community solar project, but rather a nice bonus to the many other benefits of community solar.

Explore local community solar options today

Want to compare community solar options in your area? Check out our Community Solar Marketplace, where you can see a list of open community projects near you and get a quick estimate of potential savings. If there aren’t community solar projects available in your region just yet, you can sign up to receive updates as new projects go live on the Marketplace.

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