Have you been getting bombarded with community solar offers? Community solar is becoming increasingly popular in New Jersey, but it’s not the best clean energy option for every homeowner. For most homeowners, owning solar panels either through a cash purchase or loan, has significantly greater financial benefits.
Today, we’re uncovering the hidden downsides of community solar to help you decide whether it’s the right choice for your home.
What Is Community Solar?
A community solar project is essentially a solar farm that serves multiple homes. When you sign up for community solar, you will be able to purchase the electricity generated by the solar farm at a lower rate than you would pay a traditional electricity provider. You’ll save some money on your electric bills and you’ll be using clean energy, but you won’t own your solar panels, which means you’ll miss out on the key benefits of installing solar panels for your home.
The Downside of Community Solar
New Jersey’s community solar program has its benefits, especially for the environment. It allows us to produce more electricity from clean sources and burn less fossil fuel. But the benefits of community solar for individual homeowners are not the same as the benefits of installing your own solar panels. The real financial and security benefits of solar power come from owning and controlling your own system.
Less Financial Gain
Subscribing to a community solar program will save you money on your electric bills, but not nearly as much as installing your own solar panels. When you subscribe to community solar, you pay for the power you use, and that money is not going toward a long-term investment. You continue to make payments every single month, the same way you do now buying power from the utility. When you install your own solar panels, you are eliminating your power bill for the entire lifetime of your system—25-30+ years! Every dollar you save goes toward paying yourself back for your initial investment and, once you break even, you are actually making money.
No Incentives or Tax Benefits
Solar panels earn you incentives in New Jersey. You’ll get a 30% tax credit when you install them, and you’ll earn Solar Renewable Energy Credits (SRECs) just for generating power with the solar panels you own. You get one SREC for every 1,000 kW of electricity you produce, and will receive a guaranteed payment of $85 per SREC for 15 years. You only get these benefits if you own your solar panels. If you participate in community solar, you are not eligible.
No Independence
One of the key benefits of installing solar panels is that you are in full control of your electricity. You generate it yourself and, if you install battery storage, can also store it. This eliminates your reliance on outside sources for an essential resource and makes you self sufficient so you can protect your home and family during a disaster. With community solar, you do not own or control the system. It is just as susceptible to outside forces as the main electric grid.
The Final Verdict
NJ Solar Power has been an advocate for solar energy in New Jersey for over 20 years. We have played a significant role in New Jersey’s energy transition and are proud to live in a state that values renewable energy. But our priority has always been delivering the most possible value for our customers. We believe that, if you have the means, you will reap significantly greater benefits and financial gain by installing your own home solar panels than you will by subscribing to a community solar program. Community solar is a great option for renters and homeowners who could not otherwise afford solar, but it offers lower benefits.