Community Solar: An Industry Brief Cutting Through The Collective Confusion

Community or shared solar offers an opportunity for the residential and commercial customers, who either cannot or simply do not want to install solar at their homes or businesses, to receive credits on their energy bill. These type of programs enable customers to either purchase solar energy or even invest in solar assets, who otherwise would not be able to, due to several reasons including:

• Inadequate roof space
• Lack of string credit score
• Not owning a home

In a nutshell, the driving forces enabling growth in the community solar space are (virtual) net metering and policy mandates on a state-level, allowing  solar asset owners to receive credits for the excess energy produced. Virtual net metering (VNM) lets more than one customer to profit from the credit produced by a community solar farm. The business models continue to evolve to cater to the needs of both customers, AKA subscribers, and utilities. Identifying the optimum model and what it takes to succeed in this budding market, can be challenging and at times confusing. This industry brief aims to cut through some of this confusion by providing a bird’s-eye view over the main existing models, drivers of success, as well as considerations for investors and asset owners.