Community solar is taking off in New Jersey. The Community Solar Energy Program (CSEP) currently supports thousands of subscribers and Governor Murphy recently signed legislation to expand the program.
But is community solar right for everyone?
New Jersey residents have been bombarded with fanfare surrounding community solar in recent months, and the facts can easily get lost in the hype.
In this guide, we explain how community solar works and weigh the pros and cons so you can make an informed decision for your home or business.
What Is Community Solar?
Community solar is a solar generation system through which multiple people and entities (called subscribers) share the benefits of one or more solar arrays. Community solar allows people who would otherwise not have access to solar panels—such as renters—to benefit from solar power.
How Does Community Solar Work?
The Community Solar Energy Program (CSEP) utilizes a subscription model. Here’s a general overview of how it works.
- Development – A developer installs a large solar array in a suitable location either rented or purchased from a site host. This could be on a warehouse rooftop, in an open field, or on unused land.
- Subscription – Individuals, businesses, and organizations subscribe to the community solar farm and receive a portion of the electricity it generates.
- Credits – Subscribers are not directly connected to their community solar farm. Instead, the electricity the farm generates is fed into the main electric grid and subscribers receive credits on their electric bills for their share of the power produced, reducing their monthly electricity costs.
Pros & Cons of Community Solar
A lot of the information about community solar in NJ focuses on the positives. But when deciding whether community solar is worth it for your home or business, it’s important to look at the drawbacks, too—especially if you’re choosing between community solar and private residential or commercial solar.
Pros of Community Solar
Let’s start with the positives.
- Accessibility – Community solar makes solar energy accessible to individuals who could not otherwise install solar panels, like renters. If you live in a rental, it could be a great option for you.
- Upfront Cost – There is generally no upfront cost associated with a community solar subscription, making it a good option for those who can not afford to install their own solar panels. However, community solar isn’t the only affordable option. Solar loans are an excellent way to finance your solar installation and own your solar panels without having to make a significant upfront payment.
Cons of Community Solar
Now, let’s look at the downsides when compared to owning your own solar panels.
- Lower Savings – Community solar projects typically offer their subscribers a 15-25% discount on their electricity bills. You’ll save a lot more than that with private solar—many homeowners fully eliminate their electricity costs with solar panels.
- Lower Earning Potential – Solar owners earn money with incentives like Solar Renewable Energy Credits (SRECs). Community solar subscribers are not eligible for these incentives.
- No Tax Benefits – When you subscribe to a community solar farm, you will not be eligible for the 30% federal tax credit. The project’s developer will claim that credit for themselves.
- No Personal Control or Independence – When you subscribe to a community solar program, you’re still under your utility company’s thumb. You do not have any control over your solar panel system and don’t benefit from the self-sufficiency solar ownership gives you.
The Final Verdict: Is Community Solar Worth It?
Community solar is a great way to access clean, renewable energy if private solar ownership is not an option for you. But, if you can afford solar panels and you have the space from them, you’re better off installing your own system. You’ll benefit directly from your solar panels while eliminating your bills and earning money via solar incentives like SRECs.
NJ Solar Power is a highly experienced solar installer in NJ with over two decades of experience installing solar energy systems. We are a longstanding authority on solar energy in New Jersey and are committed to helping our customers find the best solutions for their homes and businesses. We can help you maximize your financial and environmental benefits with a custom solar power system designed exclusively for your home or business.