A solar garden, often called community solar, is a centralized solar energy installation that generates electricity for multiple subscribers. It is typically situated on unused land, brownfields, or large commercial rooftops, located off-site from the participants. This model allows individuals, organizations, and businesses to benefit from clean solar power without installing panels on their own properties. This shared arrangement provides financial advantages to many users from the jointly produced energy.
Operational Mechanics of Solar Gardens
The core function of a solar garden relies on subscribers purchasing a share of the system’s output or capacity. Subscriptions typically involve either a direct purchase of a percentage of the panels or a commitment to a defined block of kilowatt-hours (kWh) per month. The energy produced by the solar garden is immediately sent onto the local utility grid, unlike traditional rooftop solar where electricity directly powers the home. The utility tracks the total generation attributed to the entire array and the specific portion assigned to each subscriber’s share.
This process is managed through virtual net metering (VNM). VNM is a policy mechanism that allows the utility to calculate the financial value of the electricity generated by the subscriber’s share of the distant solar array. This calculation is often based on the retail rate of electricity. That calculated value is then applied as a direct credit to the subscriber’s regular electricity bill, effectively offsetting the power consumed from the grid at their physical location.
Subscribers receive two line items on their monthly statement: a charge for consumed electricity and a corresponding credit for the power generated by their share. Subscribers usually enter into a long-term contract, often spanning 10 to 25 years, with the solar garden owner, who may be a third-party developer or the utility itself. Subscription size is capped to ensure bill credits do not exceed the subscriber’s historical electricity usage, maintaining their status as an energy consumer rather than a generator. The financial benefit is realized because the subscription cost is generally less than the value of the credit received, creating a guaranteed savings margin for participants.
Eligibility and Access to Community Solar
Solar gardens were developed to overcome the physical and financial barriers associated with traditional rooftop solar installations. Many customers cannot install panels because they rent, live in multi-unit buildings, or have roofs that are too small, shaded, or structurally unsuitable for solar hardware. The community model makes solar energy accessible to a broader demographic by separating the location of generation from the location of consumption.
Renters, apartment dwellers, small businesses, and non-profits occupying unsuitable commercial spaces can easily subscribe and receive financial credits. The accessibility of community solar is particularly significant for low-to-moderate income (LMI) households. These households often lack the upfront capital or adequate credit history required for a traditional solar loan or lease.
Geographic limitations are a standard requirement for participation in these programs to ensure the benefits remain locally focused. Subscribers are typically required to reside or operate a business within the same utility service territory as the physical solar garden. Some state programs further restrict eligibility, requiring subscribers to be located within the same county or a limited number of adjacent zip codes to maintain local economic benefits and grid management simplicity.
The community solar model shifts the financial burden of installation, maintenance, and insurance away from the individual subscriber. The risk and responsibility are managed by the project owner, allowing the subscriber to focus solely on receiving monthly bill credits. This arrangement democratizes solar access by decoupling energy consumption from the need for a suitable, privately owned roof, thereby addressing energy equity concerns.
State-Level Regulatory Frameworks
The existence and operation of solar gardens rely entirely on specific legislation and regulatory decisions made at the state level, not federal law. State-level mandates create the necessary legal framework for community solar projects to connect to the grid and utilize virtual net metering. Without these enabling policies, utilities would not be obligated to recognize or credit remote generation.
Many states integrate community solar into broader Renewable Portfolio Standards (RPS), which require utilities to source a certain percentage of their electricity from renewable sources by a specific date. Community solar legislation often sets specific regulatory mechanisms, such as defining how much total capacity can be installed statewide, known as program caps. These caps manage the pace of solar development and ensure system stability without overwhelming the utility grid with unexpected generation.
State regulation also defines program ownership structures. Some frameworks allow only utility-owned projects, which can limit competition and innovation. Other, more robust frameworks permit third-party developers, such as independent energy companies, to own and operate the gardens, fostering a competitive marketplace that often results in better rates for subscribers.
Regulatory bodies establish consumer protection standards governing subscription contracts and marketing practices. These standards ensure transparency regarding expected savings, contract length, and termination fees, particularly for LMI participation goals. The state also determines the specific rate at which the utility compensates the garden for generated electricity, often called the “value of solar” rate. This compensation rate is complex, factoring in the wholesale energy price and the avoided costs of transmission, distribution, and pollution. The regulatory environment also dictates interconnection standards, which are the technical rules the solar garden must follow to safely and reliably connect to the existing electric infrastructure.