A community solar project, farm or garden is a solar power installation that is funded by, and provides output credit and tax benefits to, multiple customers including individuals, businesses, nonprofits, and other investors. Participants purchase a share of or subscribe to a certain kW capacity or kWh generation of remote electrical production. The project's power output is credited to investors or subscribers in proportion to their investment, with adjustments to reflect ongoing changes in capacity, technology, costs and electricity rates. Community solar is accessible to renters, homeowners, and business owners who lack a suitable roof for traditional solar panels, don't have a suitable roof orientation for solar, or who can't afford the upfront costs of solar. Community solar provides direct access to the renewable energy to customers who cannot install it themselves. Participation in community solar programs may reduce electricity bills for low- to moderate-income (LMI) households. For instance, some programs have reported families' annual savings of around $400 on their electricity bills. Companies, cooperatives, governments or non-profits operate the systems.
Benefits of community solar Installing solar panels on a building or household can come with a variety of issues. For homeowners, these limitations include roof shape/size constraints, shading, grid capacity, and zoning regulations. Non-homeowners cannot make building modifications like solar installations. Additionally, low-income households in the U.S. face an energy burden (a term used by the U.S. Department of Energy to define how much of a household's gross income is spent on paying for energy) that is roughly triple the amount of other U.S. households. With around 50 million low-income U.S. households (about 44% of the U.S. household total), many U.S. residents are spending large amounts of their income on energy. Many of these residents, whether they are renters or their properties don't support installation, don't have access to solar.
Community solar programs are particularly beneficial for low-income households, renters, and residents of multifamily buildings who face barriers to installing rooftop solar panels. These programs allow such individuals to access renewable energy and reduce their electricity bills without the need for personal solar installations.
Community solar functions similarly to conventional grid-supply energy insofar as it provides energy remotely, requiring no installation or maintenance on the part of the consumer. Because of community solar projects' remote nature, the physical limitations of solar installation for consumers disappear. Also, due to its subscription/opt-in functionality, community solar can increase access to solar energy for low-income households. These projects benefit initial investors too. As consumer rates for solar energy become lower through distributed generation of community solar, initial investors in community solar projects experience higher returns in the long run.
Centralizing the location of solar systems can thereby create advantages over residential installations: Avoiding trees, roof size and/or configuration limitations, adjacent buildings, the immediate microclimate and/or other factors which may reduce power output at the residential location; Avoiding building codes, zoning restrictions, homeowner association rules and aesthetic concerns; Reduced maintenance requirements; Reduced installation costs; Return-on-investment. There are also a number of social/community benefits of community solar: Expanding participation to include renters and others who are not residential property owners. Increased solar access for low-income residents; Community solar's ability to generate jobs and educational resources.
Community solar in the United States
An estimated 80% of U.S. residents can neither own nor lease systems because their roofs are physically unsuitable for solar or because they live in rented or multi-family housing and do not have control over their roof. As of February 2025, 24 states and Washington D.C. have active policies that support community solar. Of these states, 20 include provisions supporting low-and-moderate-income (LMI) households.
According to a market analysis conducted by the National Renewable Energy Laboratory, as of December 2024 there were 44 U.S. states with at least one community solar project, including the District of Columbia. The combined capacity of community solar projects across the US was more than 7,800 megawatts. This capacity was concentrated in Florida, New York, Massachusetts, and Minnesota.
Many states have adopted virtual net metering (VNM) policies, which let businesses or households that subscribe to an offsite community solar project receive the net metering credits from that remote project.
Community solar subscribers can only claim to use renewable energy if they receive the renewable energy certificates (RECs) associated with the electricity they are using. Often, RECs are split from the electricity that community solar projects create and sold to utilities in order to help them comply with renewable portfolio standards implemented by states.
The City of Ellensburg, Washington, and its municipal electric utility claim to have installed the first community solar system in 2006.
Federal Policies and Programs The U.S. government has implemented programs to promote community solar access for disadvantaged communities. The Environmental Protection Agency's $7 billion Solar for All initiative aims to enable over 900,000 households in low-income and disadvantaged communities to benefit from distributed solar energy.
The solar Investment Tax Credit (ITC), implemented in 2006, is a one-time tax credit for commercial solar developers, including those who develop community solar projects. While the solar ITC rate was scheduled to gradually decrease over time, Congress passed a two-year extension of the 26% rate in 2020 alongside a COVID relief package, and the Inflation Reduction Act of 2022 restored its original 30% rate.
The Solar Energy Technologies Office (SETO) in the U.S. Department of Energy has sponsored various community solar related projects and research efforts. One such program is the National Community Solar Partnership, a partnership of various community solar stakeholders with the aim of increasing accessibility and affordability of community solar programs in the U.S.
At least 14 states have included low-income provisions in their community solar programs, employing various approaches such as carve-outs, incentives, and dedicated funding to ensure equitable access.
In July 2025, the One Big Beautiful Bill (OBBB) was signed into law, altering clean energy tax credits established under the Inflation Reduction Act. The bill accelerates the phaseout of solar tax incentives including timelines for commercial solar projects and imposes strict material sourcing guidelines. For community solar developers and financiers, the investment tax credit (ITC) will no longer apply to projects that have not started construction by the end of 2027 – posing challenges for future development.
During Donald Trump’s second presidency, several Biden-era climate and clean energy policies affecting solar development were reviewed or curtailed. In January 2025, Trump ordered federal agencies to pause disbursements under the Inflation Reduction Act and the Infrastructure Investment and Jobs Act while programmes were reviewed for consistency with the administration’s energy policy. In August 2025, the administration announced that it would no longer implement the $7 billion Solar for All programme, which had been designed to expand rooftop and community solar access for low-income and disadvantaged communities in the United States.
California
SolarShares (2007) offers customers of the Sacramento Municipal Utility District the opportunity to buy shares in its solar farm. The electricity generated by each customer's "shares appears as a credit on his or her energy bill, a savings expected to average between $4–$50 a month, given sunshine variability. For a monthly fee—starting at $10.75 a month (averaging 9%) for a 0.5 kW system—participants opt into solar power production. The current phase is sold out, although plans are in progress to expand capacity.
The PVUSA array in Davis, California (2001) provides virtual net metering for city-owned meters. The California legislature passed a law specifically allowing this for this individual array. Senate Bill 43 was signed by Governor Brown on September 28, 2013
Colorado
Colorado legislation passed in 2010 that requires the Public Utilities Commission to rewrite rules to direct investor-owned utilities to offer rebates for community solar gardens.
HB10-1342, the Community Solar Gardens Act specified:
Energy must be sold directly to an investor-owned utility. Utility pays retail + RECs. Utility provides Virtual Net Metering credit on the subscribing customer's bill. System size limited to 2 megawatts (MW). 6 MW total limit on the program for first three years. There must be at least 10 subscribers. Subscribers must be located in same county or city as the solar garden. Subscribers whose county has a population less than 20,000 may subscribe in a neighboring county. Subscribers may buy up to 120% of their own power use worth of solar power. Either a for-profit or nonprofit entity may own and administer the solar garden.
In Colorado, Xcel Energy customers continue to pay the standard non-energy fees but can buy enough solar shares to offset 120 percent of their load.
In 2024, Colorado Governor Jared Polis signed SB24-207, the Community Solar Modernization Act, to streamline solar farm development and expand access for low-to-moderate income (LMI) households. Starting in 2026, the law increases the maximum size of community solar gardens to 5 MW, requires at least 51% of capacity to serve LMI subscribers with a minimum 25% bill discount, and mandates utility companies to offer 100 MW of community solar capacity over two years.
Florida
Orlando Utilities Commission (OUC) has a solar farm that began producing power in October 2013. The municipal utility, which has approximately 55 percent of its 230,000 electric customers living in multi-family housing, sought a unique solution for those wanting to use solar power, but unable to modify the homes they rent or lease. This project also allows those customers the ability to buy into solar without all of the upfront costs. Subscribing customers volunteered to pay a higher rate on their power bill, but they were also able to lock in that rate for the estimated life of the project – 25 years. Today, 1,312 solar panels are generating up to 400 kilowatts (kW) of electricity at OUC's Gardenia Operations facility next to Interstate 4. The panels are on three canopies, which have created 151 covered LED-lit parking spaces over about 2.5 acres. A total of 39 customers have subscribed to the project. Each kW of the array's 400 kW was sold in blocks, with a limit of 15 blocks per customer. Each block represents 112 kilowatt hours (kWh) on a customer's monthly bill, so the maximum benefit per customer is 1,680 kWh. The average OUC residential customer uses around 1,200 kWh. Any unused power is credited on the account for the next month.
Illinois Illinois has a strong community solar market thanks to the Future Energy Jobs Act and the Climate Equitable Jobs Act. Illinois first introduced community solar under the Illinois Shines Program in 2019. According to pv magazine USA, Illinois was ranked fourth for its community solar operating capacity as of 2024, and as of the beginning of 2025, it had 393 MWac of total community solar capacity.
Maryland