What is Community-Owned Solar?
Unlike typical community solar programs — where residents subscribe to a utility-run array and receive a bill credit — community-owned solar means members hold equity stakes, vote on key decisions, and keep the financial benefits circulating locally.
Why Community-Owned Solar?
Local Wealth That Stays Local
When a community owns its solar array, financial returns remain in the neighborhood. Instead of profits flowing to distant investors or utility shareholders, revenue is reinvested locally — lowering energy bills, funding cooperative services, and building long-term wealth for members. Research shows that local economic impacts are 3.4 times higher in community-owned projects than in comparable utility-owned projects.
Solar Access for Everyone
Community-owned solar enables renters, low-income households, and anyone without a suitable rooftop to participate in — and profit from — clean energy. By organizing through cooperatives or member-owned LLCs, communities can pool resources to develop solar projects that would be out of reach for any individual household, spreading both the costs and the benefits equitably among members.
Ownership is Influence
Most community solar programs still leave residents as consumers rather than decision-makers. Community-owned solar is different: members vote on key decisions, shape how the project is run, and hold genuine governance rights over their energy infrastructure. This gives communities control over where energy dollars go and who benefits — a meaningful step toward energy democracy.
Resilience When It Matters Most
Community-owned solar can be paired with battery storage and microgrid capabilities to keep power running during outages and climate-related disasters. When a community governs its own energy system, it can prioritize keeping critical facilities — hospitals, shelters, resilience hubs — online when the larger grid goes down.
A Just Energy Transition
The move away from fossil fuels doesn't benefit all communities equally. When communities own energy projects, the transition is guided by those most affected by energy costs and climate impacts — not solely by market forces. States with clear policies supporting community ownership demonstrate that intentional policy choices, rather than market dynamics, shape the clean energy future in the public interest.
How it Works
A community-owned solar project is owned collectively by neighbors, cooperative members, or a local organization. The array connects to the electric grid, and each member receives a credit on their utility bill based on their share of the electricity generated, a mechanism called virtual net metering. This is what makes community solar accessible to renters, apartment dwellers, and anyone whose property isn't suited for rooftop panels. The key difference from typical community solar is ownership. When a utility or developer owns the array, profits flow outward. When the community owns it, members hold equity, share in the revenue, and vote on how the project is run.
How it's Funded
Community-owned solar projects don't rely on a single funding source. Instead, most projects use a "capital stack" of financing instruments to cover upfront costs — typically member equity contributions, grants or philanthropic funding, loans from green banks or community development financial institutions, and, in some cases, tax equity investment. Historically, the federal Investment Tax Credit reduced installation costs by about 30%, though recent federal policy changes have significantly restricted its availability for new projects.
Where it's Applicable
Community-owned solar is most accessible where state policy enables it — particularly in states that allow virtual net metering, set clear ownership rules, and offer financial incentives to offset upfront costs. In practice, most existing projects are in rural areas, driven by rural electric cooperatives that already have the institutional infrastructure to develop and manage shared solar. The Midwest and Southeast are especially dense with cooperative-led projects, even in states without formal community solar programs. Because the array doesn't need to be on anyone's roof, community-owned solar is also open to a diverse range of users.