What are Community Solar Projects
Community solar projects or ‘solar gardens’ are power plants that supply electricity to a wide array of households. These projects can be owned by communities or by 3rd party power plants. The main aim of solar communities is to provide solar power to members of the community who cannot afford to install panels on their own. The solar power generated at the source is shared by the entire community thus making it more cost-effective and environmentally friendly. Solar communities are different from other typical methods of group investments and green power. Mentioned below are some terms and methods that should not be confused with community solar:
Group Purchasing deals
These purchase deals allow a group of households or companies to purchase solar panels in bulk quantities at a depreciated rate from solar panel companies. The power and benefits gained from such deals are not shared in the community, unlike community solar. Rather, each household reaps energy and benefits from a separate solar system. Also in community solar projects, there is only one source of power generation.
- Green Energy- Green energy refers to people signing up for renewable sources of energy, mostly wind and hydro. Most people who implement green energy do so out of conscience and not for saving costs. A premium amount is paid to such wind and solar farms for their power. It is more of a privilege than anything else. On the other hand, the prime objective of solar gardens is to reduce the costs incurred by each household.
- Online and crowd-funded solar platforms- A lot firms (for example Mosaic) have deployed energy investment portals that allow anyone to invest in the solar energy market. The buy-in, in this case, is only an investment and the power generated has no impact on the investor's electricity bill. The solar generation unit has no relation to the investor's energy needs and geographical locations. Benefits from such investments are taxable whereas those by community solar projects are not.
Solar project developers and planners put action in place to ensure that their solar community is no way similar to typical investments. This is done to avoid breach of regulations and save taxes. Hence the members of a solar garden are not viewed as investors and the money they save on their electricity bills is not counted as income. Hence, there are certain government rules and regulations that decide solar community participation. Most often, members who are invited for solar community projects are from within the same geographic location such as cities, gated communities, districts and towns. Also, each household is only allowed as much power as it is needed for their annual consumption. There are numerous tax incentives and Renewable energy certificates that companies can make use of to boost their deployment of solar power. Tax incentives greatly help communities who cannot afford regular tax to implement solar power at an extremely affordable rate.