What Is Community Solar?

Community solar is a model that allows multiple electricity customers to benefit from a single, shared solar installation without putting panels on their own roofs. Subscribers receive credits on their electricity bills based on their share of the solar farm’s output. The solar installation may be a ground-mounted system on a few acres of land or a rooftop array on a commercial building, typically located within the same utility service territory as the subscribers.

The model solves a fundamental problem with rooftop solar. An estimated 50% to 75% of US households and businesses cannot install rooftop solar because they rent their space, have unsuitable roofs, live in multi-unit buildings, or cannot afford the upfront cost. Community solar extends the economic benefits of solar energy to these customers without requiring any changes to their property.

How Community Solar Subscriptions Work

A community solar subscriber signs up for a portion of a solar project’s output, typically measured in kilowatts of capacity or a share of total production. Each month, the subscriber’s share of the solar farm’s generation is credited to their utility bill. The subscriber pays the community solar developer for the electricity, usually at a rate 5% to 20% below what they would otherwise pay the utility. The savings come from the difference between the solar credit value and the subscription cost.

Most community solar programs require no upfront payment and offer month-to-month or annual subscriptions. Subscribers can typically cancel with 30 to 90 days’ notice. If a subscriber moves within the same utility territory, their subscription transfers to their new address. This flexibility makes community solar accessible to renters and others who might move frequently.

State Policies and Market Growth

Community solar availability depends heavily on state policy. As of 2025, more than 40 states have some form of community solar activity, but the market is concentrated in states with enabling legislation and favorable interconnection rules. Minnesota pioneered community solar with its 2013 Solar Garden program and remains one of the largest markets. New York, Massachusetts, Illinois, and New Jersey have also developed significant community solar markets.

The total installed community solar capacity in the United States exceeded 7 gigawatts by the end of 2024, serving over 3 million subscribers. The market is growing at roughly 25% to 30% annually, driven by expanding state programs, declining solar costs, and increasing consumer demand for clean energy.

Low-Income Access and Equity

A growing focus of community solar policy is expanding access to low- and moderate-income households. Federal incentives under the Inflation Reduction Act include a 20% bonus investment tax credit for community solar projects that serve low-income customers. Many states now require community solar developers to reserve a portion of their capacity for income-qualified subscribers.

The challenge is customer acquisition. Low-income households are less likely to respond to traditional marketing channels and may be skeptical of third-party offers that promise savings on their electricity bills. Successful programs partner with community organizations, housing authorities, and social service agencies to reach eligible customers through trusted channels.

The Developer’s Perspective

Community solar development is a specialized business that requires expertise in solar engineering, real estate, permitting, utility interconnection, customer acquisition, and billing management. Developers must navigate complex state-specific regulations, secure sufficient subscribers to fill their projects, and manage ongoing billing relationships with hundreds or thousands of individual customers.

Despite this complexity, community solar offers strong returns for developers. Projects benefit from the same federal tax credits as utility-scale solar, while subscriber payments provide predictable, long-term revenue. The growing demand for clean energy subscriptions from both individuals and businesses ensures a deep pool of potential customers in states with enabling policy.