If you’ve been scratching your head thinking of ways to save money in the face of rising energy prices, consider community solar. By subscribing to a shared solar farm, you gain access to solar energy while offsetting the impact of rising energy prices on your finances. The next step for most people is answering this common question: how exactly will this help me save money?
In this article, we will provide an overview of community solar savings as well as a brief example to illustrate what your potential savings could be if you enroll.
A Quick Overview of Community Solar
Community solar facilitates access to solar energy for households without burdening them with the financial or structural hassles of rooftop solar. It’s a simple and sustainable way for them to save the planet AND save money at the same time.
All you need to do is subscribe to a share of a local solar farm, granting you access to the solar energy produced by that share. Thanks to the solar credits generated by your community solar project, you will receive 10%-25% savings on your monthly utility bills. Solar projects last 25 to 30 years, meaning you could save thousands of dollars over the lifetime of the project!
What About Solar Credits?
Solar credits are provided to subscribers by community solar providers. They represent the dollar value of the energy generated by the customer’s share of the solar farm. These credits are applied to the subscriber’s utility bill each month to reduce the cost of their electric bill.
A subscriber will typically accrue extra solar credits in the summer since sunnier days mean more energy. These leftover credits can be kept and later applied to any bill in the darker winter season, helping customers reduce their bills or even lower it to $0 for any given month during the winter.
A Few Factors That Impact Your Savings
Size and location of your solar project: The larger your share of the community solar project, the more you’ll be able to save, given that you qualify for more solar credits. Also, solar farms located in sunnier regions will generate more energy.
Income status: if you come from a low or moderate income household, you could qualify for higher discount percentages, allowing you to accrue even more savings over the course of your subscription.
Seasonality: Your solar farm’s energy production and your energy usage vary from season to season, so you can expect slight fluctuations in your savings.
Energy usage: Your community solar provider accounts for your average annual energy needs. When you allocate a large portion of your energy usage to the project, the higher your potential savings will be.
Electricity rates: The higher your electricity rates, the higher your potential savings with community solar. This is because the energy produced by your portion of the solar farm replaces the energy you would need from the grid. You are therefore saving the cost of each unit (kWh) of energy from the grid that you don’t use (yes, even with inflation)!
For Instance…
For a household or business with a monthly utility bill of $120, the yearly utility cost is $1440. Thanks to a 10% discount from community solar, they would save $144 every year (starting with a reduced annual bill of $1296 in Year 1). If utility costs rise by 3% each year, their savings would also increase, helping them save more than $3000 after 20 years of subscribing to a community solar farm!
You can use Finray’s handy savings calculator to get a better idea of what your potential savings could be when joining a community solar program in your state. Or reach out to us with any questions and our team will help simplify the process for you!
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Written By Alfreda Adote | Edited By Lauren McGregor