Consider Low-Cost Siting Options

Providing city-owned land as opposed to developers bringing the land has the potential to generate low-cost siting options, as discussed previously.

Learn from Historic Deals in the Area

Learning about prices from other community solar projects in your region can help you make an informed decision about how much the total project might cost. If recent solar deals have been completed in the region, try to connect with project developers to understand the pricing. However, keep in mind that community solar pricing differs from on-site projects because of the cost of managing subscribers.

Estimate Net Savings and Costs

Once you have some information about potential project site(s), it is helpful to carry out a back-of-the-envelope economic analysis of the project(s). Savings will be calculated by comparing the bill reduction with the subscription payment. Elevate Energy’s Community Solar Business Case Tool incorporates the subscription business models into an economic valuation framework and is extremely helpful for estimating subscription cost management and options.

• Savings:
  • Year-one savings
  • Lifetime savings
  • Net present value (NPV) of lifetime savings
• Costs:
  • Financing costs
  • Program management and subscription costs
• Solar production details:
  • Expected project size
  • Expected production

Explore the Option of Reducing Cost by Capturing the ITC

The ITC, otherwise known as the federal solar tax credit, allows you to deduct a percentage of the cost of installing a solar energy system from your federal taxes. Under the latest requirements, any solar project that begins construction after July 4, 2026, must be placed in service by December 31, 2027 to be eligible for tax credits. Cities can leverage the elective pay mechanism to receive a direct cash refund from the IRS. See the Funding Guidance for more detail.

Reduce Hard Costs with Aggregation and Competitive Procurement

Combining multiple projects, even when owned by different parties, into the same RFP has been shown to decrease costs because it generates greater developer interest that is due to the larger total project size and requires less developer overhead per project. You should plan on reaching out to other entities considering solar projects in your area to discuss aggregation.

Read RMI’s blog posts on reducing costs through aggregation for rural electric cooperatives and lessons from aggregation, in addition to the Better Cities’ report Innovation Through Aggregation. As the project manager, you should issue a competitive RFP as discussed previously.