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Community Solar

Third-Party Ownership

In the third-party ownership model depicted in the adjacent diagram, the utility partners with a third party. The third party is responsible for constructing, owning, and operating the solar plant, and provides RECs to the subscribers in some cases. It is often also responsible for providing membership and subscription information to the utility. The utility in turn provides electricity to the solar plant subscribers, and the subscribers receive credits for the output of their community solar plant on their utility bills. Subscribers’ community solar subscriptions are either integrated into their utility bills or are administered by a third party.

Integrating all of the payments and credits into a single bill (usually administered by the utility) has been shown to greatly improve the success of community solar projects by decreasing the default rate. However, this type of integration should be planned for early on in the process as utilities may require a long time to make the necessary changes to their billing software.

Low-Income Recruitment

Third-parties are not naturally well-positioned to engage or offer subsidies to support low-income subscribers. As a result, low-income participation will likely be low in third-party ownership programs in the absence of an external incentive (e.g. a subsidy provided by the city) or regulation requiring a minimum level of low-income subscription.