Direct Ownership - American Cities Climate Challenge

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Community Solar

Direct Ownership

In the direct ownership model, subscribers sign an ownership agreement and make an up-front payment to purchase solar panels from the utility or a third-party developer. As in the third-party ownership model, a third party or the utility is responsible for constructing and operating the solar plant and, in some cases, providing RECs to the subscribers. If the plant is operated by a third party, this operator provides membership information to the utility to facilitate subscriber bill crediting. The utility in turn provides electricity to the subscribers of the system, and subscribers receive a credit against their utility bill based on their panels’ energy production.

Low-Income Recruitment

Of the three models, direct ownership is the least likely to attract low-income subscribers. Purchasing the panels requires a significant capital investment, which low-income households may not be able to afford. Financing programs can help address this issue, but even then, low-income households may find it difficult to access these programs. Meanwhile, low-income households are less likely to have a sufficient tax burden to fully capitalize on the federal investment tax credit.