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Community Solar

Understand Your Subscription Models

Subscription models dictate how the costs to develop and maintain the community solar project are allocated to subscribers. Subscription programs can help cities that seek to provide a local and clean energy option to populations otherwise excluded from renewable energy policies. These groups can be price sensitive, so it may be important to design subscription models such that targeted groups would not be required to pay a premium to participate.

Subscription models can be divided primarily into three types:

  • Payment for capacity ($/kW)–Subscribers purchase the solar panels upfront and receive bill credits based on their panels’ energy production. The subscribers can be considered the actual owners of the panels and therefore can take advantage of the ITC if they have sufficient tax liability.
  • Payment for solar production ($/kWh)–Payments and credits are based on the amount of solar energy that is produced by a subscriber’s portion of the system.
  • Hybrid–Subscription models can also be designed as a hybrid, including both capacity and production components.

When evaluating potential subscription models, you may also want to consider the following questions:

  • Are there incentives for specific customer classes?
  • Are subscribers required to pay significant up-front costs?
  • Will subscribers receive bills from multiple parties or a single, integrated bill?
  • Who receives the RECs?
  • Who is able to take advantage of the ITC?
  • What percentage of a project can a single customer subscribe to?

As you research the community solar programs available already or design your own program, make sure you consider the answers to the following questions:

  1. Who would plan, construct, and operate the solar system?
  2. Who would be able to claim the environmental or monetary benefits of the RECs?
  3. Who would be able to capture any tax benefits or available incentives?
  4. How can you minimize the risk of rate changes for subscribers?
  5. Will target populations participate in the program given their constraints and needs?
  6. Is there an established bill credit rate already? If so, what level of subscription costs would allow subscribers to save money?

Learn More

The National Renewable Energy Laboratory’s (NREL) Design and Implementation of Community Solar Programs for Low- and Moderate-Income Customers provides additional insight into program designs and structures that can include and retain low- and moderate-income customers, clarify program billing, crediting, and eligibility, reduce customer turnover and default risk, and enroll customers with lower credit scores.

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