A community solar development allows multiple community members to share in the benefits of a single solar installation regardless of where it is installed. Subscribers purchase or lease solar panels or the electricity produced in the array and receive a credit on their monthly electric bill for the energy produced by their share of the installation.
A subscriber is an electric customer who owns or leases a portion of a community solar installation. The subscriber may receive a credit on their electric bill for the energy the panels produce.
Any customer within the utility’s service area can subscribe to a community solar project. Community solar has become popular across the country because it allows those that cannot typically install solar on their property to generate solar energy; i.e. renters, those with shared roofs, those with shaded roofs, or those who otherwise cannot install a full solar array.
Subscribers must typically be in the same utility service territory as the community solar system. However, some states require that subscribers be within a specific geographic perimeter to the host site.
There are a number of business models that have been successfully implemented for community solar. These include utility-, developer-, or nonprofit-owned projects. The latter is sometimes called a special purposed entity, created specifically to develop a community solar array. There are advantages and disadvantages for each model. Ultimately, however, the subscribers can be considered the owners because they are purchasing the power generated from the system.
A special purpose entity is an entity founded for the purpose of managing the development of a community solar system. A special purpose entity can be a limited liability corporation or a cooperative.
A Subscriber Management Organization (SMO) is an organization that finds, secures, and manages subscribers. These are commonly nonprofits or community organizations that work within the community to educate consumers, enroll them in the program, and manage their billing over time.
A community solar system can be installed on a rooftop, on the ground, or even as a canopy over a parking lot. Businesses, schools, libraries, houses of worship, and community centers are examples of rooftop sites that can host community solar. Any open space can host a ground-mounted system, even landfills or brownfields.
The size of the host site may depend on utility rules and state regulations, on the impact of solar on the grid at the specific location, as well as economies of scale for the solar developer. Community solar sites need to be large enough to provide shared energy to a substantial number of subscribers. While there are no strict rules for the minimum size required for a community solar system in Illinois, the Cook County Solar Map targets sites that can host a minimum capacity of 25 kW on rooftop (about 2,500 square feet) and 300 kW ground-mounted systems (about one acre). Currently, Illinois regulation states that community solar arrays can be no larger than 2 MW, which is about 7 to 9 acres.
Sites with no shading from trees, neighboring buildings, or other objects are ideal for solar. But because Chicago gets an average of more than 2,600 hours of sun per year, even sites with some obstruction can produce a significant amount of solar energy with the right system design. Sloped or flat roofs can accommodate solar, and although a south-facing array is ideal, many configurations can work. The roof configurations of the properties on the Cook County Solar Map were analyzed to determine the technical potential.
Since solar arrays have a lifetime of 20 years or more, the ideal roof is new or has close to 20 years of warrantied life remaining. Solar panels can be installed on older roofs, but solar developers should factor the costs of removing and re-installing panels when the roof is repaired or replaced.
Ground-mounted systems can be installed on almost any type of land or soil including bedrock, clay, sand, and even cobblestone. The most common land types for solar installations are empty lots, commercial parking lots, landfills, and other open spaces with minimal shading. Sites with heavy vegetation, debris, or rocky surfaces can present technical challenges or added expenses that may diminish the feasibility of a project.
The owner of the system is responsible for obtaining a permit from the local municipality and insurance.
Yes. Community solar, like any solar development, requires that the utility analyze the site and anticipated energy generation to determine the impact on the grid. Some projects require network upgrades before interconnection can occur. Industry standards assume some level of costs. Greater than average network upgrade requirements can make some projects unfeasible. An interconnection application must be completed with the utility, which requires some technical and engineering work be done in advance.
Community solar projects are developed and installed in the same way as any other solar installation. There is no additional or specific equipment required when building a community solar array. The primary difference is how the electricity that is fed into the grid is credited and where the system connects to the grid.
In most community solar models, the host site owner does not own the system and does not incur any costs. In fact, host site owners may benefit from leasing revenue and/or reduced energy costs. The owner of the system, commonly a third-party developer or nonprofit, is responsible for designing, installing, maintaining, and eventually decommissioning the system, as well as managing subscriptions and energy distribution.
Funding for community solar is no different than funding for any solar development. In Illinois, because utilities cannot own generation, the business model is typically driven by the developer. The developer will work with investors and/or commercial lenders to secure funding. For nonprofit or special-entity-owned systems, funding can be secured from foundations, donations, or commercial lenders.
Incentives available for solar from federal and state/local governments or utilities. Federal incentives include the Investment Tax Credit and accelerated depreciation. Electric co-ops, municipal utilities, and public districts are exempt from federal income taxes and thus cannot benefit from federal tax incentives. However, they can make use of Clean Renewable Energy Bonds (CREBs) that are not available to the for-profit investor-owned or privately-held utilities. A database of federal and local incentives for solar can be found at the Database of State Incentives for Renewables & Efficiency®.
The Investment Tax Credit (ITC) is currently a 30 percent federal tax credit claimed against the tax liability of residential (Section 25D) and commercial and utility (Section 48) investors in solar energy property. Under Section 48, the tax credit can be claimed by the business that installs, develops, and/or finances the project. For a community solar project, this may be the owner, the developer, or a third party, as long as the entity is not tax-exempt. The incentive applies to the investor, not to the subscriber.
There is no current standard to determine the subscriber fee. Rates are determined by the system owner based on several factors, including the development cost, available incentives, and maintenance and operation costs over the term of the agreement with subscribers.
Subscriber contracts, whether purchasing or leasing a panel, can be for any period. When purchasing a panel, the contract simply allows the subscriber to receive power generation benefits for the life of the system (usually 25 years). But the subscriber can sell their panel at any time for the remainder of the panel lifetime. For leased panels, the term can be annual with an automatic renewal. Purchased or leased subscriber agreements can typically be transferred at any time.
Typically subscriptions are transferable. If you move within the same area (in some states, the same county, and in others within a certain number of miles), you can transfer your subscription to a new meter. You can sell your subscription at any time you choose if you move out of the area.
Community Solar In Illinois
There are no barriers to community solar in Illinois’ current legislative framework. A net metering structure has been in place for nearly a decade allowing up to 2MW of distributed generation to be connected to the grid. However, meter aggregation rules currently in place do not require utilities to facilitate these projects, nor does it clearly define a credit allocation. These projects must be individually approved and billing mechanisms agreed upon for each project. To date, none have been. Various energy bills being negotiated currently include language and requirements for community solar, including rate structure, billing, and approval processes.
Cook County Solar Map
The map does not currently display existing installations. However, we recognize the benefits of including this information and may do so in future updates of the website.
Additional municipalities may be included in the map depending on availability of data necessary for the analysis. We are currently considering several options. We plan to include additional municipalities in future updates.