CS 101: How does Community Solar work?
Overview: Community Solar programs give your business an easy way to save on electricity costs by partnering with solar projects located off-site, but in your same electric utility. Once enrolled, the solar farm produces energy on your behalf, and you receive bill credits directly on your utility bill. You then pay the solar farm for a portion of those credits, while keeping the remainder as savings.
Community solar is gaining attention for the benefits it can bring to electricity customers. But one question comes up again and again: “How does it actually work?” In this review, we’ll walk through the basics step by step so you can see how the structure comes together and what it means for you.
What is Community Solar?
Community solar makes it possible to benefit from solar power without having panels on your own property. As long as you and the solar project are in the same electric utility territory, you can subscribe to a share of the project. Instead of receiving energy directly, you get bill credits on your electric bill for your share of the production. It works like having solar panels of your own without needing them on site. Let’s break down how it works step by step.
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Think of community solar like using coupons. A solar project generates bill credits (coupons) that get applied to your electric bill. In return, you pay the project owner a portion of the credit value. State rules limit how many credits you can receive, so the first step is finding the right amount for your facility. Once that’s set, and you know how many panels are needed to generate the right amount of bill credits, you can move forward with a partnership.
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Once your business is signed up, the credit transfer process begins! When the sun hits the panels each day, they’ll generate electricity and send it to the local utility on your behalf.
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The solar project owner will coordinate directly with the utility to properly allocate credits to your account. Each month, you’ll see a new line on your statement showing the bill credits you received. The credits reflect your share of the project’s output and lower the amount you owe to the utility.
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The final step in the process is paying the solar project owner for the credits you receive. They typically bill for the credits at a 10-15% discount.
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The 10-15% discount on bill credits allows your facility to reduce its operating costs and improve its bottom line for as long as the partnership is in place.
Example:
Suppose your facility spends $10,000 a year on electricity. A solar farm provides your facility with $10,000 in bill credits but charges 90% of that value ($9,000). The benefit for your business is the difference ($1,000 in this instance).
Since your payment is always a fixed percentage of the value delivered, your business never pays more than the benefit you receive. These savings aren’t a one-time discount—they continue month to month for the length of your agreement. Smaller businesses often sign up for one year, while larger organizations can lock in savings for up to 15 years. There’s no need to install solar panels on your property, and your electricity service remains the same. The only change is that your electric bill is lower, providing ongoing, predictable savings without disrupting daily operations.
We believe energy savings should be simple
Turquoise Trail Energy Solutions was established to help businesses address rising energy costs and make confident choices on their energy strategy with clarity, transparency, and ease. To learn more, continue with our 5-part Community Solar 101 Series, where you’ll also learn:
Whether you have questions related to community solar, your electric bill, or your savings options in general, we’re here to guide you towards a smarter solution. Reach out to speak with an expert who can help you choose the right path.
