Strength in Numbers for Community Solar Projects

As solar power gains popularity literally on a daily basis, access to this clean energy source is being expanded in the form of community solar projects. Instead of one residential homeowner or business funding their own solar installation, a group or consortium fund the project and then reap the rewards of lower utility bills and in some cases tax credits, or financial credits added to their utility bill.

At it’s core, the community solar concept seems pretty simple, and while the roots remain intact, several models are surfacing with each basically attempting to provide clean energy at low cost points, to a group or “community” of users.

3 Primary Models:

Nonprofit

A nonprofit model is established when a nonprofit organization decides to produce at least a portion of it’s own power if not all. The organization is typically required to meet certain guidelines both financially and length of time in existence in order to receive government incentives in the form of tax breaks, credits and other benefits to offset costs.

Benefits include:

* Leading by example by championing clean, renewable energy

* Increasing donations as many environmentally conscious donors will donate only to eco friendly organizations

* Lower monthly utility costs

* Receive credits from the utility when enough energy is produced to actually send excess energy back out to the grid.

Third Party

This model has 3 key elements.

* Investors

* Developers/Installers

* End Users

The model allows, in it’s most basic form, a way for the end users to enjoy monthly cost savings and at times energy credits. It gives the developer/installer tons of work and at times a share of the tax breaks or credits from any government, municipal or state involvement.

The investors are then rewarded with the lion share of this incentive, tax break, or rebate money depending on the model.

This model is elastic and seems to morph over time as well as being different from place to place geographically. With the 3rd party model, up front costs are typically either very low or non existent as the installation and equipment are paid for over a period of time by participants.

Utility Backed

When a city utility decides to place a solar energy system in a strategic location, it allows the customer base to become investors in the project. The customers will enjoy the lower cost of power on a monthly basis and at times receive credits for unused energy. This could be a city block or a cul de sac in a neighborhood, depending on how it is structured.

Again, when government tax credits and incentives locally are in place, this becomes a win/win for consumer and utility alike. Not to mention a nice way to help keep the environment cleaner through the use of renewable solar energy.

Community solar projects will continue gaining momentum as each project strives for the best situation with all participants be they banks, utilities, installers or end users. As more of these projects continue to develop and thrive, they will lay a road map for future endeavors and continue providing shining examples of low cost, eco friendly energy initiatives.