Community Solar Developers: What You Need To Know?

Community solar is a large solar project shared by multiple subscribers such as residents, small businesses, organizations, and municipalities. Subscribers receive credits or discounts on their electricity bills based on their subscription agreement for the power generated from the portion of the solar array. This benefits users by offsetting their electricity costs.

Community solar developers play a crucial role in developing the project as they possess unique features that make them successful, and their earnings vary according to their role in the project. It includes a few popular names in the USA such as BlueWave Solar, Nexamp, Clearway Energy, Borrego Solar Systems, SunShare, Nextera Energy, and so on.

It’s time to gain valuable insights and find out if Community Solar is the right choice to satisfy your requirements.

What Are Community Solar Developers?

Community solar developers carry the responsibility of the project’s initiation, planning, and guiding the development and execution process. They play a crucial role in selecting suitable sites, obtaining permits and approvals, arranging funds, and managing the entire construction as well as the interconnection of the solar PV systems to the grid for proper operation process.

Although there are few developers involved in the project’s initial development, the remaining others take additional responsibility for the project’s operation and maintenance until the eventual decommissioning.

However, there has been confusion that community solar is the same as the companies that handle subscribers. To clarify the fact, the developers manage subscribers, but most often the job is diverted to other companies.

How is a Community Solar Project Developed?

Here is a step-by-step process on how community solar projects are developed starting from land acquisition to decommissioning

1. Land Purchase: This is the basic and initial step where a developer either acquires land or collaborates with property owners on a partnership basis to lease the land for project development.

2. Project Evaluation: The next step is to analyze the project feasibility by scrutinizing the required permits from local authorities and sources of financing to start and operate the project.

3. Designing and Engineering: Planning the setup and figuring out how the project operates effectively and safely after it is fully developed.

4. Acquiring Necessary Materials: Selecting the best materials and technologies to be used to connect the system to the grid.

5. Self-involvement or Hiring another company: Either the developer carries out the entire process involving their team or supervises the development process performed by a third-party company.

6. Connecting Community Solar to the Grid: The electricity generated becomes the main energy source for utility as the developer connects the community solar project to the grid so that users in the community gain benefits from solar energy despite not owning the panels.

7. Acquiring and Maintaining Subscribers: Subscriber organizations carried out by developers or other groups take on the main responsibility of finding subscribers who are willing to join the community solar program and manage their subscriptions smoothly throughout the project.

8. Operation and Maintenance: The company (developer or other groups) handles the routine maintenance, performance testing, and inspection process for the efficient operation of the project.

9. Project Decommissioning: This is the final step as the company (developer or other groups) decommissions or withdraws the project upon reaching the concluding phases of its life.

How Do Community Solar Developers Make Money?

Here are various financial models that help to understand how community solar developers earn money:

1. Utility-Owned Model: Subscribers can acquire the panels from the utility company through direct purchase or leasing. In return, they will receive a share or credits on their electricity bill that can be used to offset the cost of the power generated by the solar panel system.

2. Developer Owned Model: The developer is involved in the setup and maintenance process of the community solar farm as well as operating the whole community solar model. Subscribers can join the project in two possible ways — through PPAs (Power Purchase Agreements) and Lease, and earn credit on their monthly electricity bills provided for their share in the solar project. The developer works along with other groups known as Subscriber Management Organizations (SMOs) to recruit subscribers to sign up for the program and organize subscriptions.

3. Special purpose entity (SPE) model: The individual users get together to form an LLC (Limited Liability Company) to make lease payments and manage the utility relationships rather than working with a third-party sponsor. As the members of the LLC are also subscribers, they not only operate the project but also gain benefits from the solar energy production by purchasing the panels paying the upfront costs, or through monthly subscriptions.

It becomes clear that the developer-owned model is the most common financial model for community solar projects. This is because this financing model helps developers gain steady revenue directly from the solar subscribers through PPAs or leases rather than getting paid directly by the owner through the utility model.

Top Community Solar Developers

Let’s take a closer look at these top five community solar developers in the US by finding out their special features and notable contributions to the community solar industry:

1. BlueWave Solar
2. Nexamp
3. Clearway Energy
4. Borrego Solar Systems
5. SunShare
6. Nextera Energy

Developer 1: BlueWave Solar

BlueWave Solar— The Boston-based group founded in 2010, has developed more than 135 MW of solar projects and several gigawatts of battery storage projects so far and has provided accessibility for community solar projects to countless customers. They lease land for projects rather than maintaining project ownership.

BlueWave has a long list of successful track records and developing large-scale projects (more than 70 projects) generating above 217 megawatts (MW) of solar approximately based on the data available till the end of 2023. As a result, these projects had a positive impact on the environment avoiding the annual production of 115,000-plus metric tons of CO2, which is equal to eradicating 25,000-plus cars on the road.

One of the unique features adopted by BlueWave is the innovative land usage strategy through a method called agrivoltaics that integrates agriculture and solar energy production. This approach simultaneously ensures consistent farming procedures and animal grazing without compromising on the clean energy generation process.

Developer 2: Nexamp

Nexamp — the US-based organization founded in 2007 by two ex-militants namely Will Thompson and Dan Leary, operates community solar projects throughout the country by focusing on clean energy contributing to reduced carbon emissions. On average, the Nexamp subscribers can save upto $275 on their annual electricity bills.

Through the vertical integration model, the partners of Nexamp share its profits by owning and operating its projects ensuring progress through each stage starting from the development to the decommissioning.

Once the project is officially commissioned, Nexamp serves as a subscriber source for these projects by conducting all Operation and Management processes as well as the subsequent decommissioning free of cost to the property owner.

Developer 3: Clearway Energy

Clearway Energy— headquartered in San Francisco was founded in 2018 by Craig Cornelius. Known as the reputed developers and operators of clean energy in the US, the market leader group in community solar has developed more than 200 MW of projects throughout the nation serving 15,000-plus customers.

They have operated on large-scale projects of more than 5 GW of solar, wind, and energy storage. Out of 1.3 GW of solar, approximately 325 MW is generated from community solar and commercial solar projects.

Developer 4: Borrego Solar Systems

Borrego— the leading Engineering, Procurement, and Construction (EPC) group in solar and energy storage systems was founded 45 years ago (in 1980).

Operated across the U.S., Borrego has not only focussed on commercial and utility-scale solar projects but also developed community solar projects on a large scale. Also, they offer Operational and Maintenance (O&M) services for a few projects as well.

Their contribution towards community solar has been remarkable by developing, optimizing, and maintaining large-scale solar and storage projects above 1 GW capacity.

Developer 5: SunShare

SunShare— the Colorado-based group founded in 2011 by David Amster-Olszewski, has developed 80-plus community solar gardens generating above 118 MW of clean and solar energy providing service to thousands of subscribers. Over these years, they have grown to become one of the leading community solar companies in the U.S. Their community solar projects have reduced 3.6 billion pounds of coal burned, which is equal to planting 55 million trees or more.

Integrating large-scale solar production along with innovative land usage strategies, SunShare aims to develop solar projects on plots by simultaneously contributing towards achieving sustainable energy goals and financial benefits to landowners.

What Are The Key Features of Successful Community Solar Developers?

Successful community solar developers share certain key qualities such as:

1. Expertise in Permitting: Community solar developers understand local zoning regulations to ensure the project gets approved smoothly by adhering to the community’s goals.
2. Grid Interconnection: The developers conduct feasibility tests guaranteeing compliance with interconnection standards to ensure a reliable connection to the electrical grid.
3. Subscriber Management: Developers prioritize effective subscriber management by addressing their issues promptly and maintaining clear communication, which becomes essential to maintaining a successful community solar project.

These are a few examples of community solar you need to know:

1. Harvard Community Solar Garden, located in Harvard, Massachusetts, serves as an example of overcoming zoning and permitting challenges as the 500 kW project is owned by the shareholder and completely subscribed. In the first round of the Solarize Mass program in 2011, nearly 75 individual contracts were signed by Harvard residents tallying the solar PV capacity upto 402 kW. So, this project allowed subscribers to receive credits on their electricity bills based on the energy produced for their share of the panels they signed up for.

2. Fremont Community Solar Program located in Fremont, Nebraska, consists of a 1.55 MW capacity utility-driven project that is fully subscribed, highlighting the importance of utility collaborators for the development of community solar. The Fremont residents had three options to participate in the program — direct purchase, acquiring solar energy shares, and mix and match option allowing them to purchase individual panels along with shares.

3. Kit Carson Electric Cooperative: Situated in Taos, New Mexico, the 100 kW project is operated under a third-party power purchase agreement, and fully subscribed. Compared to the purchasing cost of an on-site system, electric cooperative’s customers were able to acquire individual panels at a lower price and low-income customers didn’t have to pay for upfront costs.

How To Know If a Developer’s Community Solar Program Is Right for You?

To find out if the developer’s community solar is right for you, it is important to evaluate these factors:

1. Be familiar with pricing structure: It’s a fact that community solar offers considerable savings, but you need to look for a straightforward pricing structure that doesn’t have any hidden charges. Although few programs offer fixed prices, the rates are varied based on the overall energy production.

2. Estimate and Compare the savings: A majority of community solar programs offer savings on your electricity bills and try to compare the predicted rates with your present energy costs. Try to prioritize long-term savings rather than changes in huge price rates.

3. Evaluating the contract terms: Suppose you’re moving to a different location, check for the contract’s duration and cancellation guidelines that offer flexibility and transparency.

4. Check the environmental impact: You need to check the environmental benefits of each program and find out the percentage of reductions in C02 emissions by preferring cost savings as well.

5. Find out Local or State Incentives: A few areas offer extra benefits for subscribers signing up for the community solar program and choose the best deal by making a clear comparison.

6. Carefully go through the reviews and reputations: The simple method is to find out the subscribers’ opinion and their experiences as well as find their share of the community solar contract. Most often the deals are attractive on paper, but customers’ practical experience provides genuine feedback on the true value and quality of the services.

7. Availability: Finally, all you need to do is start searching for the best community solar deals available in your area or state.

Overall, the community solar model is the preferred choice If you cannot install panels on your property due to several complications such as improper roof conditions, renting, or financial shortages.