- You subscribe to part of an off-site solar project and receive credits on your electricity bill for its output.
- NREL research has found community solar can cut bills by roughly 5% to 25%, depending on the program.
- As of 2024, the US Department of Energy counted 24 states and localities, including Washington, DC, with community solar legislation.
- Discounts usually apply only to the energy portion of your bill, not fixed charges or every delivery fee.
How community solar works
A developer builds a solar array, often a few acres in size, and connects it to the local grid. Households and businesses sign up for a share of its output. Each month:
- The array generates electricity, which flows into the grid.
- Your utility applies bill credits based on your share of that output.
- You pay the project operator, or "subscription manager," for those credits, usually at a discount to their face value.
Your home's power supply does not change physically. The same wires deliver the same electricity, and the utility still handles outages and billing. What changes is how much you pay.
Subscription versus ownership models
| Subscription (most common) | Ownership or upfront purchase | |
|---|---|---|
| Upfront cost | Usually none | Pay for a share of panels upfront |
| How you save | Pay less than the value of the credits, often a fixed percentage discount | Receive credits for the share's output for the project's life |
| Savings size | Modest but immediate | Potentially larger long-term, with payback period |
| Flexibility | Often cancellable; may move within the utility territory | Harder to exit; may be transferable or sellable |
| Best for | Renters, people who may move, anyone avoiding risk | Long-term residents wanting more savings |
Worked example: what a subscription saves
Suppose your subscription is sized to 600 kWh a month on average, your utility credits each kWh at 12 cents, and the subscription offers a 10% discount.
- Bill credit from the utility: 600 kWh × $0.12 = $72.00
- Amount you pay the subscription manager: $72.00 × 90% = $64.80
- Monthly saving: $72.00 − $64.80 = $7.20
- Annual saving: $7.20 × 12 = $86.40
Note the credit rate. In many programs, the bill credit is worth less than your full retail rate because it covers only some components of the bill. If your total rate is 18 cents but the credit is 12 cents, a 10% discount on the credit saves $0.012 per kWh, which is $0.012 ÷ $0.18 ≈ 6.7% of what that energy costs you, and an even smaller share of your total bill once fixed charges are included.
Output also varies by season. Summer months produce more credits than winter months, and many programs let surplus credits carry forward.
Who community solar suits
- Renters and condo owners who cannot put panels on their roof.
- Homeowners with shaded, small or unsuitable roofs where rooftop solar would perform poorly.
- People who may move within a few years and do not want a long rooftop payback.
- Income-qualified households, since many programs set aside capacity or offer larger discounts for them.
If your roof is a good candidate and you plan to stay, compare the numbers with owning a system. Our guides on whether rooftop solar is worth it and solar costs will help, and our solar savings calculator can estimate rooftop returns for comparison.
Contract terms to check before you sign
- Discount structure: a fixed percentage off credits is easy to understand. A fixed price per kWh may save less if utility rates fall or rise slower than expected.
- Contract length: terms range from month-to-month to 20 years or more. Shorter is more flexible.
- Cancellation fees: many subscriptions have none; others charge or require notice. Check before signing.
- Moving: can the subscription follow you within the same utility area, or be transferred to someone else?
- Billing method: some programs use consolidated billing, one bill from the utility with the discount applied; others send a separate bill from the subscription manager.
- Credit check and payment method: some require a credit check or autopay.
- Escalators: any built-in annual price increase reduces long-term savings.
- Allocation size: subscriptions are usually sized to a share of your historical use. An oversized share can leave credits stranded.
How to find a program
Availability depends on state or provincial rules and your utility. In the US, start with your utility's website and your state energy office. The US Department of Energy's community solar basics page explains consumer protections and where to look. Some programs are run by utilities themselves; others are offered by independent developers. Outside the US, look for community energy cooperatives or utility "green" programs, which may work differently, for example by selling shares rather than bill credits. Check our incentives page for related programs.
Other ways to lower your bill without a roof
Community solar works well alongside efficiency. Renters can often cut more from their bills with low-cost changes such as LED lighting, smart power strips and better thermostat settings. See our guides to lowering your electric bill and standby power.
Frequently asked questions
Can renters join community solar?
Yes. Renters are one of the main groups community solar is designed for, since the panels are off-site and nothing is installed at your home. You typically need to be the account holder on the electricity bill.
Will community solar keep my power on during an outage?
No. Your electricity still comes through the utility's grid, so outages affect you just as before. Community solar is a billing arrangement, not a backup power source.
How much can I save with community solar?
Most subscription programs offer a discount on the value of the bill credits, and NREL research has found bill savings ranging from about 5% to as much as 25%, with larger discounts often reserved for income-qualified households. Savings apply only to the subscribed portion of your bill.
Is community solar a scam?
Legitimate programs exist in many states, but door-to-door and phone sales can be pushy or misleading. Confirm the program is recognized by your utility or state energy office, read the contract, and never sign under pressure.
Run your own numbers
Plug your bill, prices and climate into our free solar savings calculator — every assumption is editable.
This guide is general information, not financial, tax or engineering advice. Prices and incentives change — confirm with qualified local professionals and official program sources. See our methodology and disclosures.