Do you want to go solar but lack the structural or financial means to do so? Community solar could be the right option for you. By subscribing to a portion of a solar farm, you get the benefits of solar energy AND long term utility savings.
Whereas rooftop panel owners have clear-cut incentives for solar energy, it’s a bit less obvious how community solar participants can benefit from financial incentives. Sure, the program helps reduce their electric bill. But is that it?
Community solar subscribers benefit from financial incentives more than most people realize. In this article, we’ll highlight some common solar energy incentives and how they can help you as a community solar subscriber.
The Federal Investment Tax Credit
The Federal Investment Tax Credit (ITC) is a tax credit of 30% and is available to owners of solar energy systems. Even though community solar subscribers are not “owners”, they can still indirectly benefit from this tax credit.
The community solar developer or solar farm owner possesses the solar panels, qualifying them for this credit. Since they are receiving this tax credit, they can pass on this reduction to the subscriber. This means subscribers won’t directly qualify for the credit, but the tax credit will be reflected in their community solar bill from the developer in the form of additional savings on their subscription.
Virtual Net Metering
Virtual net metering follows the standard structure of a community solar subscription. With traditional net metering, solar panel owners receive credits for the excess energy generated by their panels. With virtual net metering, households receive solar credits from the energy produced by their portion of a solar farm.
These credits are applied to their utility bills, helping them save money and reduce their reliance on non-renewable energy produced by the grid.
- The Energy Community Tax Credit Bonus
- The Energy Community Tax Credit Bonus provides a bonus of up to 10% to large scale energy projects and facilities located on brownfield sites.
- This credit supplements the Federal ITC of 30%, allowing solar developers to reduce taxes further and pass on even more savings to subscribers. This credit bonus encourages developers to continue to invest in solar projects in these energy communities, making community solar even more attractive to locals thanks to the additional savings.
- The Clean Electricity Low-Income Communities Bonus Credit Amount Program
- This program increases clean energy investment tax credits for facilities in designated low-income areas. For instance, solar projects located in low-income communities could benefit from a 10% increase on the 48E Clean Electricity Investment tax credit.
- Given that community solar is the ideal option for low-income households that want to go solar but can’t afford it, this tax credit makes clean energy even more affordable and accessible to them.
State-Specific Incentive Options
Various states provide their own unique financial incentives for community solar programs, here are a few:
- The New Jersey Successor Solar Incentive Program (SuSI) provides long term incentives to large-scale solar facilities across the state to promote the growth of the solar sector and the accessibility of solar energy to all New Jersians.
- The New York Inclusive Community Solar Adder targets low-to-medium income communities. It facilitates access to community solar for LMI households so they can benefit from guaranteed savings.
- The Solar Massachusetts Renewable Target (SMART) Program guarantees solar developers a fixed rate for each kilowatt-hour of energy produced by a community solar project. This means more stable revenue for them, thus encouraging them to develop even more community solar projects. Additional incentives, called “adders”, are also available for developers servicing low-income communities.
Financial incentives are not as evident for community solar subscribers as they are for rooftop solar owners. However, they still provide an indirect pathway to maximized savings and long-term environmental and financial gains for anyone who joins a program. If you are interested and want to discuss your community solar options, reach out to us and we’ll walk you through it!
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Written By Alfreda Adote | Edited By Lauren McGregor