Community Solar

Equitable community solar projects enable households who would not otherwise benefit from solar energy to participate in the clean energy transition.

Table Of Contents
  1. Why This Matters
  2. Policy Solution
  3. Model Policy Features
  4. Potential Limitations & Pitfalls
  5. Complementary Policies
  6. Additional Information
  7. Examples
  8. Resources
COMMUNITY BENEFITAffordability, Decarbonization
KEYWORDSClean energy, Decarbonization, Distributed energy, Electricity, Renters
REGIONState, Local
AFFORDABILITY STRATEGYResidential Decarbonization
OVERSIGHTState Energy and/or Environmental Protection Offices, Utility Commissions
POLICY MECHANISMLegislation, Regulation

Why This Matters

Households unable to install rooftop solar because of cost considerations, roof condition, or renter status are typically denied access to the benefits and utility bill savings associated with a transition to solar energy. In addition to these barriers, many states lack community solar enabling legislation, meaning that any community solar programs that are offered within the state are generally restricted to installations owned by investor-owned, municipal, or cooperative utilities. For those utility-operated “community solar” programs that do exist, they often fail to provide meaningful financial benefits to low- and moderate-income customers. 

Policy Solution

Community solar refers to solar projects or purchasing programs that benefit multiple customers. Customers typically subscribe to a portion of the energy generated from the project and receive an electricity bill credit for their share of energy generated.1 Equitable community solar projects, which are facilitated via enabling legislation at the state level, enable community members who would not otherwise benefit from solar energy (e.g., renters, homes needing roof repairs) to participate in the clean energy transition. Community solar, when designed for equity, can operate as both an immediate affordability tool and a long-term community asset—delivering energy savings, local ownership opportunities, and resilience within communities historically excluded from clean energy investment. Projects that engage low-income and disadvantaged communities in the design, implementation, and/or ownership of community-centered projects and that deliver meaningful, guaranteed benefits to participants can create a more resilient, reliable, democratic, and affordable energy system.

Model Policy Features

Key features of equitable community solar programs, include:

  • Meaningful, guaranteed, affordable benefits to customers (e.g., minimum 20% savings on utility bills).2
  • Virtual net metering, which enables multiple subscribers or owners to share in the benefits of a single solar energy generation system.3 
  • Third-party non-utility and multiple-party ownership with appropriate safeguards, such as ensuring that community solar rates are affordable to subscribers and do not incentivize profitmaking.4
  • Subscription models (e.g., purchasing, leasing, or pay-as-you-go bill credits) with consolidated billing (i.e. the customer only receives one bill rather than separate bills from the utility and the community solar provider).5
  • Set-asides for low-income households (e.g. a majority of subscribers must have incomes at or below 200% of the Federal Poverty Level).6
  • Reduced transaction costs (e.g., enrollment, billing and collections).
  • Financing (e.g., grants to project developers, low- or no-interest loans).7
  • Community-centered development, siting, outreach, and education.8
  • Includes high road jobs and training or apprenticeship opportunities, including strategies to reach underemployed communities.
  • Provisions to require timely interconnection by utilities (e.g., within 20 business days), with enforceable timelines and potential penalties for delays.9
  • Includes provisions for regular data reporting and public transparency (e.g., public-facing data dashboard with interconnection requests and utility response time).10 
  • Subscription rate should not include pay escalators.11

Potential Limitations & Pitfalls

  • There is a risk of “community solar” legislation being introduced that mirrors equitable models in language (e.g., referencing bill credits) but favors large producers or out-of-state companies and limits overall solar energy generation. Policymakers should watch for bills that cap participation, restrict ownership to utilities, or rely on “cost-shift” arguments to justify barriers to equitable community solar.  (e.g., Michigan’s “Maximizing American Grid Affordability [MAGA] Act, introduced in 2025).12 
  • There is an additional risk of “utility gatekeeping” through protracted interconnection studies and approvals, which can stall or cancel projects. This risk can be mitigated by legislating strict, enforceable interconnection timelines and “deemed approved” provisions. 

Complementary Policies

Complementary policies that can enhance the functionality of community solar policies include: 

  • Distributed energy interconnection reform to facilitate project development.
  • Bill assistance programs and low-income rates  to further support energy affordability.
  • Comprehensive distributed energy resource valuation, which enables community solar to be paid for, in part, through compensation of any broader benefits provided to the grid, such as deferral of distribution upgrades or peak demand reduction.

Additional Information

As of 2025, 23 states and the District of Columbia have adopted enabling legislation to facilitate community solar development.13

Examples

1. Colorado Access to Distributed Generation Act – SB24-207: Access to Distributed Generation (2024)

Details:

  • Requires utilities to ensure a minimum capacity of “inclusive community solar” is available to customers, dependent on utility size.
  • Carves out at least 51% of capacity for income-qualified subscribers (i.e. household income at or below 200% of the Federal Poverty Level or at or below 80% of Area Median Income; eligible for other energy assistance programs or public assistance program, such as Medicaid or the Supplemental Nutrition Assistance Program).
  • Specifies that income-qualified subscribers receive bill credits of at least 25%. 
  • Offers consolidated billing to simplify subscriber payments.
  • Calls for “robust participation by members of disproportionately impacted communities in any rule-making related to inclusive community solar,” with compensation for their time. 
  • Includes self-attestation as a means of income verification.
  • Offers protections to ensure prospective subscribers are not prevented from participating (e.g., use of deposit requirements or credit score review).

LIMITATIONS:

  • Includes some bill credit thresholds that are linked to facilities receiving tax credits through the Inflation Reduction Act, which have been repealed by the One Big Beautiful Bill Act.

2. Minnesota Community Solar Garden – Minn. Stat. § 216B.1641 Community Solar Garden

Details:

  • Sets tiered bill credits based on subscriber types (e.g., low- and moderate-income, affordable housing).
  • Requires that at least 30% of capacity is set aside for low- and moderate-income subscribers (i.e. household incomes at or below 150% of Area Median Income or recipient of energy assistance program) and that at least 55% of capacity be set aside by low- and moderate-income, affordable housing providers, and public interest subscribers (e.g., Tribal entities, schools, churches, nonprofit organizations).
  • Also prioritizes projects located at brownfield sites and those that offer apprenticeships and workforce development, especially among Black, Indigenous, and People of Color community members.
  • Requires that utilities provide consolidated billing for community solar providers.
  • Offers protections to ensure prospective subscribers are not prevented from participating (e.g., charging exit fees, credit score review). 
  • From 2013–2024, the program enabled over 900 MW of community solar, which is estimated to provide net benefits of nearly $3 billion to Minnesotans over the project timeline.14

LIMITATIONS:

  • Prioritizes non-utility ownership, but also allows public utilities to own community solar projects.
  • There was a bipartisan effort to repeal Minnesota’s community solar legislation in 2025 because of charges of “cost shifting” from community solar subscribers to regular utility ratepayers.15 The effort was thwarted, however, through advocacy efforts in support of continuation.16

    Resources

    An example of model legislation can be found at:

    To ensure consumer protections while expanding access to solar, see: 

    For more on strategies and processes to develop community-driven, equitable community solar projects, see:

    For a summary of policy features that deliver meaningful community solar benefits, see:

    Written: September 2025

    1.  U.S. Department of Energy. Community Solar Basics: What is Community Solar? Accessed: September 29, 2025. ↩︎
    2. The Climate + Clean Energy Equity Fund and Just Solutions. (2023). Community Solar: A Critical Tool for Energy Justice. For a definition of virtual net metering, see Solar on Multifamily Affordable Housing Program.  What is virtual net energy metering (VNEM)? Accessed: September 29, 2025. ↩︎
    3. The Climate + Clean Energy Equity Fund and Just Solutions. (2023). Community Solar: A Critical Tool for Energy Justice. For a definition of virtual net metering, see Solar on Multifamily Affordable Housing Program.  What is virtual net energy metering (VNEM)? Accessed: September 29, 2025. ↩︎
    4. The Climate + Clean Energy Equity Fund and Just Solutions. (2023). Community Solar: A Critical Tool for Energy Justice. For a definition of virtual net metering, see Solar on Multifamily Affordable Housing Program.  What is virtual net energy metering (VNEM)? Accessed: September 29, 2025. ↩︎
    5. The Climate + Clean Energy Equity Fund and Just Solutions. (2023). Community Solar: A Critical Tool for Energy Justice. For a definition of virtual net metering, see Solar on Multifamily Affordable Housing Program.  What is virtual net energy metering (VNEM)? Accessed: September 29, 2025. ↩︎
    6. The Climate + Clean Energy Equity Fund and Just Solutions. (2023). Community Solar: A Critical Tool for Energy Justice. For a definition of virtual net metering, see Solar on Multifamily Affordable Housing Program.  What is virtual net energy metering (VNEM)? Accessed: September 29, 2025. ↩︎
    7. The Climate + Clean Energy Equity Fund and Just Solutions. (2023). Community Solar: A Critical Tool for Energy Justice. For a definition of virtual net metering, see Solar on Multifamily Affordable Housing Program.  What is virtual net energy metering (VNEM)? Accessed: September 29, 2025. ↩︎
    8. The Climate + Clean Energy Equity Fund and Just Solutions. (2023). Community Solar: A Critical Tool for Energy Justice. For a definition of virtual net metering, see Solar on Multifamily Affordable Housing Program.  What is virtual net energy metering (VNEM)? Accessed: September 29, 2025. ↩︎
    9. See, for example, Oregon Administrative Rules. OAR 860-084-0310, Level 1 System Interconnection Review. ↩︎
    10. See, for example, State of New York Public Service Commission,  Order Modifying Standardized Interconnection Requirements (Case 18-E-0018), Section I.G., 21 or Maine Public Utilities Commission. Chapter 324: Small Generator Interconnection Procedures.
      ↩︎
    11.  Massachusetts Department of Energy Resources. 225 CMR 28.00: Solar Massachusetts Renewable Target (SMART) Program 3.0, 16. See also Low-Income Solar Policy Guide. Consumer Protection. Accessed: October 8, 2025. ↩︎
    12. Michigan Legislature. Maximizing American Grid Affordability (MAGA) Act, HB 2590, 2025 Session (introduced). ↩︎
    13. U.S. Department of Energy. Community Solar Basics. Accessed:  August 11, 2025. ↩︎
    14. Minnesota Department of Commerce. (2024). Community Solar Garden Study, 2024. ↩︎
    15. Martucci, B. (2025). Minnesota solar industry avoided legislative defeat, but future uncertain. Minnesota Reformer. ↩︎
    16. Takemura, A.F. (2025). Minnesota community solar makes it past bipartisan attempt to end program. Canary Media. ↩︎