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Shared Renewables/Community Solar

Shared renewable energy arrangements allow several energy customers to share the benefits of one local renewable energy power plant. When the power is supplied strictly by solar energy, it is sometimes called “community solar.” The shared renewables project pools investments from multiple members of a community and provides power and/or financial benefits in return.

Quick facts

  • There are at least 31 shared renewables projects in 12 different states throughout the US.
  • At least 7 states have recognized the benefits of shared renewables by encouraging their growth through policy and programs.
  • Placed in service in 2006, the shared renewables project in Ellensburg, Washington claims to be “the first community solar project in the nation.”

Shared renewables projects are often located on public or jointly-owned property, and can be an easier way for renters and condominium owners to benefit from a local solar energy project. There are many reasons why shared renewables might be preferred for a home, business, or individual. Here are a few examples:

  • Those who are only renting may be prohibited from installing solar on the property
  • The roof may be too shaded or needs re-roofing
  • The size or orientation of the roof may be improper
  • Some commercial buildings have equipment on the roof, obstructing an installation

Shared Renewables Models

There are various shared renewable energy models. Here are a few:

Utility-Sponsored Model

Some utilities provide their customers with the option to purchase renewable energy from a shared facility. The customer may purchase a set amount of electricity at a fixed rate for a long term, such as 20 years. The rate, while typically slightly higher that the current retail rate, may provide protection and stability against rising rates for grid electricity. 

On-bill Crediting

One shared renewable energy model involves enabling residents and business to invest in a portion of a shared renewable farm, and receive a credit for that portion of the energy production from the facility on their utility bill.

Special Purpose Entity (SPE) Model

Individuals join in a business enterprise to develop a shared renewables project.

Non-Profit “Buy a Brick” Model

In this model, donors contribute to a shared renewables installation owned by a charitable non-profit organization.

For more information on allocation of costs and benefits, financial and tax considerations, and other legal issues, see the additional resources below.

Additional Resources

Interstate Renewable Energy Council (IREC): IREC has developed and promoted shared program model rules and is leading group in ensuring that shared renewables become more prevelant in the U.S.  

Shared Renewables HQ: SharedRenewables.org is the central information center for shared renewable energy projects and policy across the U.S.

National Renewable Energy Laboratory's Guide to Community Shared Solar: This guide is a resource for those who want to develop community shared solar projects, from community organizers or solar energy advocates to government officials or utility managers.

Solar Electric Power Association: SEPA's Utility Community Solar Handbook provides the utility's perspective on utility managed community solar program development and is a resource for government officials, regulators, community organizers, solar energy advocates, non-profits and interested citizens who want to support or educate their local utility in implementing or improving a community solar project.  

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