Once you understand why community solar programs exist and how projects generally work, the next important question is: how do subscribers pay for the credits they receive?
In most cases, the answer is straightforward. Community solar providers structure payments so subscribers receive bill credits from a solar project, then pay the provider for a portion of those credits.
The most common structure is a Fixed % Discount. Other models exist, but they are less common and usually apply in more specific circumstances.
The Main Contract Structures
Community solar contracts are usually built around one of three payment structures:
- Fixed % Discount — the most common and generally simplest model.
- Fixed $/kWh Discount — less common, but sometimes used when subscribers want a fixed savings amount per unit of energy.
- Fixed $/kWh Payment — rare in community solar and generally more relevant for larger or more sophisticated energy deals.
Fixed % Discount: The Most Common Model
The Fixed % Discount model is the most common community solar structure because it's simple and keeps the subscriber’s savings always flowing.
Under this model, you receive bill credits on your utility bill, then pay the community solar provider a fixed percentage of the value of those credits. For example, if the program offers a 10% discount, you pay 90% of the credit value receivedd and keep the remaining 10% as savings.
If the credit value rises (which may happen as the cost of energy increases), your dollar savings rise too. If the credit value falls, your savings may decrease, but you never have to worry about paying more than the value provided to you.
Why it is common
The Fixed % Discount model is popular because it is simple, low-risk, and intuitive. Subscribers do not need to make a complicated forecast about future energy prices to understand the benefit.
For most homeowners, renters, nonprofits, and businesses, this is the structure they are most likely to see.
Fixed $/kWh Discount: More Predictable, Less Common
A Fixed $/kWh Discount model gives the subscriber a set savings amount for each unit of solar production.
For example, if your discount is $0.02/kWh, you save that amount regardless of whether the bill credit value is higher or lower in the future.
This can be useful for subscribers who value steady, easy-to-model savings. However, it is less common than the Fixed % Discount model and may not provide the same upside if credit values increase over time (which is likely to happen as the cost of energy continues to rise).
Fixed $/kWh Payment: Rare and More Market-Dependent
A Fixed $/kWh Payment model works differently. Instead of guaranteeing a fixed discount, the subscriber agrees to pay a fixed price for the solar credits.
If the bill credit value is higher than the fixed payment, the subscriber saves money. If the bill credit value is lower, savings can shrink or potentially disappear.
Considering the success of this structure depends more heavily on the subscriber having an indepth understanding of future credit values, it is much less common in standard community solar subscriptions. Instead it's generally more relevant for larger organizations who do have an in-house view of future energy prices and prefer more customized energy agreements.
What Most Subscribers Should Expect
For 99.99% of subscribers, the Fixed % Discount model is the standard structure to expect.
That's a good thing too. It keeps the relationship simple: credits appear on your utility bill, you pay less than the value of those credits, and the difference becomes your savings.
Other structures can still be useful in certain situations, but they are more niche. The right fit depends on the subscriber’s goals, risk tolerance, utility rules, and the specific project terms.
Turquoise Trail helps subscribers understand the structure available to to them, ensuring a low risk pathway to dependable savings is pursued, and in unique circumstances, can help subscribers seek out alternative options that fit their specific needs.