How To Start A Community Solar Project?
Have you ever heard about the energy generation done by solar power? Do you know that the panels are on top of roofs? Solar power is an environmentally-friendly production of energy that you would like to have one day.
The usage of community solar allows people to get a portion of a solar farm in their area. The community solar supports local renewable energy that helps in saving electricity costs. The benefits cannot only be availed by installing anything on their property. By removing home installation from the equation, community solar gives access to solar energy to people who haven’t been able to install panels on their roofs.
How To Initiate A Solar Community Project
The first aspect to consider while making the installation of the solar is the basic necessity of the location.
There must be high local and regional interest in solar. This must be adequate for a developer to invest in a solar project.
The entity operating the solar facility knows the demand for the product, and they actively seek to create a community-scale solar array in order to facilitate renewable energy for residents.
After the identification of the demand for solar by the solar developers, they then locate the site facility.
This is the initial step of the process.
What Are The Requirements Or Demands Of The Solar Developers?
If we talk about the requirements of the developer, then all they need is enough land to establish the community solar farm, and it must have suitable properties.
The land must be 5 to 50 acres.
They also seek land that has the following features:
• The ground must be stable and relatively level
• The land doesn’t require much clearing
• The site isn’t on a floodplain or wetlands
• The parcel is close to a substation
• The land is near distribution lines
• The site is free of shading throughout the day
The more appropriate the land is for a community solar farm, the less the developer must invest in plotting the solar project.
After agreeing to all the above-mentioned bullets, your land may be a good fit for a facility site.
What are the roles and responsibilities of the landowner?
Usually, the landowner leases land to the developer to start the project.
Once the farmers or ranchers have margined the productive land, they can take it out of production and still can earn money by leasing the same land to a solar developer.
Facilitating the leases for around 30 years, which is the standard life expectancy for a community solar farm, can be more beneficial.
Some landowners choose to sell the parcel to the developer, but it is a very rare case.
The role you play is totally dependent upon the terms you agree upon in the lease.
Before finalizing the lease or the deal, one can negotiate arrangement parameters from the developers.
Always remember to take a look at the contract of leasing before signing it.
The lease contract should contain the following contents:
• Who gets the tax benefits from the solar project?
• Who is responsible for paying the taxes on the land?
• Who is responsible for maintaining the community solar farm grounds?
• Who takes care of the cleanup when the project ends?
For example, when the ground is productive, farmers and ranchers can make better utilization of the land under the solar panels for their own use.
One would be able to plant specialty crops that are hand-picked. Some of these types of crops include tomatoes, peppers, or herbs, around solar panels.
Ranchers may have sheep graze in the area, as they’re good for maintaining the field and won’t damage the panels.
It becomes obvious to mention these types of arrangements pre-defined in the lease agreement.
Is Community Solar Worth It?
For most residents, community solar is worth having around. Community solar farms or a project help in enabling access to clean energy for people of all income levels and homeownership statuses. All this can be done without the expense of buying and installing a solar array. This solar program also helps in preventing environmental issues that include global warming and air quality. All these environmental issues affect the quality of life badly.
One negative side of community solar is that participants are not always liable to get the benefits or incentives of tax credits. Beyond this, community solar helps in reducing energy costs.
How Does Community Solar Works
Community solar is used to facilitate both economic and environmental benefits of renewable energy to residents and businesses who cannot install a solar array on their property. Community solar also expands access to low-to-moderate income residents. These residents are those who typically would not be able to afford the high up-front cost of a rooftop system. By the utilization of community solar, all commercial, industrial, municipal, and residential customers can benefit from solar energy.
If we talk about the uniqueness of community solar, then the design of community solar is what makes it the most versatile segment of the solar industry. Community solar developers build local solar farms that typically range between 0.5 and 10 megawatts (MW). They can be in a participating utility’s service area and connect to the existing electrical grid.
Businesses, municipalities, organizations, and residents can subscribe to the solar community project instead of putting solar modules on their roofs. These subscriptions offset the subscribers’ property’s electrical usage with solar energy. The process is done by transmitting the solar energy generated by the solar project directly to the power grid. Subscriptions reduce the dependence on fossil fuels or brown power that is needed to power the utility’s ratepayers. Along with this, the subscriber receives solar credits from the utility for the energy that is produced by the off-site solar array. The solar credits reduce the subscribers’ overall utility bill, which can further result in saving money.
Some of the Community Solar Pros And Cons
Advantages of Community Solar:
Lower Electricity Bills
One of the major advantages of community solar is that subscribers can save up to 10% off their monthly electricity bills. For instance, if the average household spends $100 each month on their electricity bill, they would be able to save $360 after three years. For a larger-scale business or institution, the amount of savings would be substantial as their electricity bills can range from $5,000 to $15,000 and more.
Reduce the Carbon Footprint
After being committed to a solar community program, it can make a positive environmental impact. Depending on the size of the solar project, thousands of CO2 emissions can be offset. For example, State Route 122, one of our solar community projects near the town of Constable, New York, is expected to offset nearly 7,304 tons of CO2 annually, which is quite equal to 39,000 trees being planted.
Create Jobs and Boosts Local Economy
Building community solar farms increases the opportunities for locals. They are likely to facilitate the employment of contractors, construction workers, engineers, electricians, project managers, etc. A huge development project that includes solar farms will likely stimulate the local economy, boosting labor income.
Combat Rising Electricity Fees
Electricity is becoming more and more expensive these days. But with the intervention of community solar, there is some protection against fluctuating electricity prices. Households, businesses, and even condos are able to have access to cheap electricity.
Suitable for Renters and Condo Owners
In case you live in a utility area as a solar community project, you can easily subscribe and start saving. Have a look at some of our community solar projects that are closest to you.
No Installation Required
There is no physical infrastructure on your property. The solar farm is typically a ground-based system that is installed off-site. The existence usually takes place on a large expanse of land, such as farmland. Any maintenance or repair work is done by contractors employed on the solar project.
Disadvantages Of Community Solar
Solar Farms Require a lot of Space
A large, even, and sunny space is ideal for building a solar farm. Depending on the size of the solar project along with the type of selected terrain, many solar companies may clear the land and flatten the grade in order for the solar system to be constructed safely. This may give rise to the cost of developing and constructing the project. OYA Renewables targets land that does not have trees and steep grades that can require additional impact on the land.
Subscribers Receive Reduced Electricity Costs but No Ownership Benefits
Community solar subscribers have no benefits of the responsibility or risk. The cost of owning a solar project is between 5 to 10% savings on electricity costs. There are a few additional benefits to owning a solar project.
The percentage of the savings may increase over time for solar project owners. After the payment of the solar to the owners, the owner can offset even 100% or more of their electricity costs with solar. Throughout the lifespan of the project, the savings can take over the community solar subscriber. In contrast, the savings percentage is fixed throughout the lifespan of the project.
Solar ownership also means controlling power generation. There is one side when it costs money to deal with generation issues, but at the same time, you control when and how it is taken care of. Community subscribers shouldn’t worry about this issue because it is in the best interests of the solar company to maintain optimal generation because they won’t receive payment for the electricity otherwise.
Subscribers Receive No Additional Solar Incentives
Community solar subscribers are not eligble to receive any solar tax credits or rebates. Instead, the solar community developer or the company owning and operating would be the ones eligible for the solar incentives.
Some Of The Community Solar Business Models
Community solar projects offer ownership shares and subscriptions. Over some of the projects, there are no options for shares, while others let you choose enrollment type. You can save money on power bills with both options, but knowing and understanding the differences between them is important:
• When you purchase an ownership share in a solar community project, the corresponding percentage of power generation is handed over to the owner for the entire service life of the project. Also, you can claim 30% of your investment as a federal tax deduction. However, owning part of a solar community project simply states that you must have the capital to pay upfront.
• When you subscribe to a solar community project, there is no upfront investment. Instead, community solar subscribers pay a monthly fee. Thus, there is an ongoing cost. The corresponding power bill savings are higher than the subscription fee. The owner must always keep in mind that subscription costs may increase over time, while an ownership share represents a single upfront payment.
How Does Community Solar Make Money
The traditional farms used to make money by producing and selling the same products to people and businesses; the cash flows of a “solar farm” and an orchard are essentially the same.
Substituting rows of crops for arrays of panels, solar farms make money by selling enough of their product (electricity). This further helps in recouping and exceeding both startup costs and ongoing expenses.
Conclusion
Community solar requires no initial investment and takes away the burden of installing the physical property on the roof of your property.
For renters, lower-income residents, and those whose roofs or land simply won’t accommodate solar panels. The community solar installations are cost-effective and renewable energy sources.
Private solar panel installations, however, can provide more solar power and greater financial benefits. Buying rooftop solar panels continues to be the best option for homeowners looking to save money and practice clean energy generation.