Community solar is a unique market segment that requires state policy for development, and 2021 was a watershed year for community solar policymaking.
The passage of enabling policy is necessary due to the structure of community solar projects. Instead of having one off-taker, community solar arrays can have many subscribers, from organizations to individuals. Community solar developers typically set up agreements with utilities, governed by state policy, that allow subscribers to receive monthly utility bill credits for electricity generated by their share of the solar project.
In 2021 alone, four states in the Midwest and Rust Belt introduced community solar-enabling legislation, while other states from coast to coast passed bills or expansions of existing programs.
- Ohio: HB 450 under consideration, would open community solar market.
- Wisconsin: LRB 1902 under consideration, would open community solar market.
- Michigan: HB 4715-16 under consideration, would open community solar market.
- Pennsylvania: SB 472 under consideration, would open community solar market.
- New Mexico: SB 84 signed into law, opened the state’s community solar market.
- New Jersey: The New Jersey Board of Public Utilities is converting its Community Solar Energy Pilot Program into a permanent program by February 2022.
- Maryland: The Maryland Public Service Commission voted to expand the capacity of the state’s community solar program as well as improve access for low- and moderate-income (LMI) customer participation.
- Delaware: SB 2 updated the existing community solar statute to require that each community solar project serves at least 15% LMI customers.
States are enacting policy provisions to guarantee a certain amount of community solar subscriptions are dedicated to LMI communities that could most benefit from lower electric bills and clean energy. Last year, Vote Solar released a guide to increasing community solar access and adoption in low-income communities, including instituting automatic enrollment in community solar programs through qualification for another government program, such as the Low-Income Home Energy Assistance Program.
“Policymakers and the solar industry must think critically about solutions like these to ensure low-wealth communities do not get left behind in the clean energy transition,” said Olivia Nedd, Vote Solar’s policy director of the Access & Equity Program, in a press release.
Community solar is a fast-growing segment with unique governmental oversight that can help ensure it’s available to everyone. According to SEIA and Wood Mackenzie’s latest Solar Insight Report, 3.4 GW of community solar was installed cumulatively through Q2 2021. That number is expected to increase to 8.3 GW by 2026.
This boom was made possible in part by the recent flourishing of bipartisan support for community solar. Across the Midwest and elsewhere, conservative Republican leaders are supporting and even introducing this type of enabling legislation, in conjunction with groups like the Coalition for Community Solar Access (CCSA).
“There’s a lot of learning that’s taking place with Republicans on this issue. As the landscape changes and prices come down, this technology becomes more competitive on its own as trends start to move and states want to create homegrown industries that are going to endure for the next decades,” said Matt Hargarten, campaigns director for CCSA.
The federal government sees great value in community solar too. An NREL report found community solar can lead to substantial bill savings, from 5 to 25%. In October 2021, the Dept. of Energy set a target of community solar powering the equivalent of 5 million households by 2025.
To reach this federal goal, DOE is offering free technical assistance to community solar stakeholders, such as state, local and Tribal governments, solar developers and other organizations working to grow this market.
“Community solar is one of the most powerful tools we have to provide affordable solar energy to all American households, regardless of whether they own a home or have a roof suitable for solar panels,” said Sec. Jennifer Granholm, in a statement. “Achieving these ambitious targets will lead to meaningful energy cost savings, create jobs in these communities, and make our clean energy transition more equitable.”
Updated 1/4/22 to correct the projected 2026 community solar capacity to be 8.3 GW, not 4.3 GW