Commodifying natural resources—be it land, water, or minerals—has always presented a moral conundrum. Yet somehow, we never fail to hoard, blockade, and ration. Humankind is fickle that way. But if ever there was an energy source that could buck precedent, it’s the sun. Community solar farms were conceived under that pretense.

“Community solar is a great place to get involved to lock in some savings on your electricity and to support the growth of clean energy on the local grid,” says Erica Forsman, president of clean energy solutions at US Solar. “Because of the IRA, we’re seeing growth not only in the number of installations, but we’re seeing the focus [shift to] more residential and low- to moderate-income people.”

US Solar operates residential community solar programs on behalf of roughly 5000 customers spread across Illinois, Minnesota, New Mexico, and Colorado, and with farms for commercial subscriptions in two additional states. While this may seem like a pittance, US Solar is currently developing 750 megawatts’ worth of projects, adding to its existing 150 megawatts in operation or under construction. Growth and demand are steady, and grid-integrated technologies have come a long way in recent years. Legislation just needs to keep up with the times.

Reaching residents

In Minnesota, where Forsman is based, she cites a recently overturned ordinance that enforces an adjacency requirement, where subscribers must live in or next to the county where a community garden is located, but is not contingent on actual distance. The rule will continue to apply to gardens constructed prior to 2025, according to Forsman.

Proximity aside, the accessibility of community programs is US Solar’s main concern. Construction may get delayed and savings “may not start immediately,” Forsman says, but “customers should never be asked for money upfront to join a community solar garden.”

Elsewhere in the Land of 10,000 Lakes, Clean Energy Resource Teams (CERTs)—an organization founded 20 years ago—is a nonprofit dedicated to facilitating large-scale solar projects on behalf of communities throughout the state. “We’re an independent third-party that provides technical assistance. We’re not connected to any particular company or financial institution,” says Peter Lindstrom, CERTs’ manager of public affairs and community engagement. “We don’t have any skin in the game, so to speak, except to provide the access to provide best practices for residents and businesses.” This includes guidance on site selection, module procurement, financing, and other matters.

This kind of altruism can only really be carried out at scale. CERTs’ initiatives, which are funded through a combination of Minnesota’s Department of Commerce and private grants, mostly take the form of community gardens, most of them servicing businesses, organizations, and various nontaxed entities like schools and churches. CERTs has also partnered with SolSmart, a national nonprofit that provides “no-cost technical assistance” to local governments looking to transition to solar energy. But the organization doesn’t shy from efforts that can turn homeowners into solar power consumers. By Lindstrom’s estimation, in 2022 alone CERTs attended nearly 440 public events and spoke with about 9000 homeowners.

What are we paying for exactly?

In a word, independence. Like any commodity, the price of solar panels—including the silicon, glass, and aluminum that comprise them—fluctuates. By today’s count, the price per watt runs as high as four dollars. The average PV panel for residential use is sized to generate about 400 watts. And the average U.S. home fitted with rooftop solar requires between 15 – 20 panels to offset a household’s annual electricity use. That breaks down, very roughly, to about $30,000 for an 8kW system. But when you zoom out and consider other economic sectors (raw materials, manufacturing, shipping) that contribute to the solar modules that adorn our rooftops and blanket our valleys and meadows, the question of cost gets muddled.

Waste is becoming less of an issue thanks to innovations in recycling for discarded panels. And several states are working on greater oversight and regulations that will shore up the growing trend of predatory contractors who sell big but don’t deliver. Let’s just not kid ourselves into thinking the solar industry is the product of a squeaky clean supply chain.

In 2022, U.S. Customs and Border Protection seized more than 1000 shipments of solar components worth several million dollars over the course of a few months. This occurred due to enforcement of the Uyghur Forced Labor Protection Act, passed in October of that year. Concerns over slave labor in China’s Xinjiang region, where many solar modules are produced, have disrupted much of the Western world’s—extending throughout North America and the European Union—efforts to decarbonize their power sectors. China currently dominates the global solar manufacturing market, and by some estimates, 75% of the modules and nearly 80% of the polysilicon manufactured in China are the product of forced labor.

Reconciling this crisis with the rising demand for renewable, low-carbon electricity supply is a dilemma not easily fixed. One path forward is to create the means to manufacture and deliver these products on a regional scale. This is starting to occur in places throughout the American Southeast and Upper Midwest, but as it remains, “one Chinese company has vastly more manufacturing capabilities than the entire U.S.,” says David Feldman, senior financial analyst with the DOE’s National Renewable Energy Laboratory.

But like most matters tied to renewables nowadays, the question of what’s possible returns to the Inflation Reduction Act. “In addition to incentivizing the deployment of solar, the IRA has a lot of incentives for manufacturing clean energy products here as well,” Feldman says. Provided that needle keeps moving in the right direction, we may begin to see conversations concerning both the price and cost of solar energy become one and the same.

Choosing the system that works for you

Deciding whether to pursue purchasing, leasing, financing, a power purchase agreement (PPA)—as detailed in Financing Solar Power, Part 1—or investing in a community farm is partly a matter of personal preference and budget, but mostly it comes down to logistics and feasibility. A good first step is to consult an online solar calculator (there are several options) to determine your home’s solar potential and estimated savings based on local rates. Then ask yourself, What type of arrangement is best suited to my home and my state?

If your home gets good solar exposure and installing PV panels on your roof is feasible, it’s recommended to get your roof inspected first, especially if the shingles or other materials are nearing end of life. (PV and roofing systems tend to have similar lifespans of about 35 years.) If it’s determined that your roof will need replacing within 10 years, it’s a good idea to get the roof replaced before installing solar.

And because solar panels protect and extend the lifespan of the portion of the roof they cover, re-roofing won’t be necessary for the duration of the solar system’s lifetime and beyond it. Otherwise, the cost of removing solar panels in order to re-roof and then reinstalling them can cost homeowners between $2000 and $7000.

When it comes to sizing your home’s system, right-sizing based on budget and energy needs is key, particularly if your PV system is tied to the grid, which is most common. Don’t go big just to impress the neighbors, because the surplus likely won’t pay off (unless you have on-site battery storage and are truly “off the grid”). Even if net-metering is in effect where you live, the credits you get back may not accurately reflect the true value of the power you’re returning to the grid. Determine your home’s annual and peak building loads and size your home’s PV system accordingly.

As for choosing the arrangement that meets your needs, purchasing a PV system and complementary battery storage outright is really recommended only for those who can afford the upfront costs. PPAs and leasing arrangements are recommended for customers who want the benefit of renewable, low-cost electricity but are comfortable not owning the PV system in question, and thus not benefitting from any associated tax credits and rebates. Along those lines, investing in community solar is a great way for homeowners and renters to yield savings on their energy bills and contribute to cleaner regional economies. That just leaves financing.

There’s a reason solar loans have claimed at least 50% of the market share of late, and that’s because they give people ownership of their PV systems with no upfront costs. Further, the terms of the loans are typically fixed and monthly payments (which often can be combined with one’s mortgage) never change, which cannot be said for leases. When it comes to solar loans, know what your home is worth, know the terms of your warranty, and work with financial institutions that understand this market.

_______________________________________________________________________

The full series

Financing Solar Power, Part 1

Financing Solar Power, Part 2

Financing Solar Power, Part 3

_______________________________________________________________________