a solar panel farm aerial view

US Government Ramps Up Community Solar Program to Meet Ambitious Clean Energy Goals

As the US Government and Department of Energy (DOE) target aspiring renewable energy goals in the coming years, community solar programs are accelerating and expanding. Renters, small business owners and others who can’t install rooftop panels will soon have the opportunity to reduce their monthly electric bills, gain energy credits and save themselves from the high upfront costs of rooftop solar. Similarly, developers and lenders have much to gain from this expansion.

What is Community Solar? 

The U.S. Department of Energy defines community solar as “any solar project or purchasing program, within a geographic area, in which the benefits of a solar project flow to multiple customers, such as individuals, businesses, nonprofits and other groups.” 

Community solar farms, which are large solar plants, are developed in particular communities. When established, community members can buy or lease solar panels to generate electricity for their nearby homes and/or small businesses. 

Community solar is a great option for those who can’t install rooftop solar panels—for example, those who rent their homes or businesses, live in apartment buildings, have poor roof support or financial limitations. This is known as the off-site model.

Other communities take part in the on-site multifamily model, where apartment and condo occupants benefit from the energy produced from the shared rooftop solar system. 

The Growth of Community Solar Projects

Last October, the DOE set ambitious targets of supplying 5 million homes with community solar (the equivalent to over 26 GW) by 2025, increasing the capacity of community solar projects by 700%, per Reuters. To ensure the DOE meets its target and solar energy grows at exponential rates, it has launched credit support and technical assistance programs for community solar developers, lenders and customers. 

The DOE allocated $2 million for free technical assistance to solar developers and pledged to connect credit-ready projects and their developers with lenders. Since the DOE’s assistance announcement, 80 community solar developers pledged to build 20 GW of community solar by 2025. 

“This initiative will bring together lenders, philanthropic institutions and community solar developers—especially those that are community-based or serve low- to moderate-income households—to create standard processes and a marketplace for deploying project capital,” the DOE said in a statement.

Although three-quarters of community solar projects have been installed in four states, the market is set to grow. Florida, which is the country’s largest community solar state at 1.6 GW, has the largest program available and installed most of the GW within the last two years. New York, the fourth largest market at 731 MW, has seen recent growth as the state hopes to install 6 GW of community solar by 2025 and 10 GW by 2030, according to Reuters. Approximately 22 states have also introduced policies to support the expansion of community solar.

The Impact of Community Solar Farms

Community solar farms offer several benefits to customers, developers and communities:

  • Community energy participants save money on their electric bills—approximately 10%.
  • Participants receive an electric bill credit for electricity generated by their share of the system.
  • 80% of projects have positive net savings to customers, reported Reuters.
  • Community solar projects are typically less expensive for developers.
  • Developers receive free technical assistance in regards to policy and regulation, financial analysis, community engagement and more.
  • The DOE is set to recruit 1,000 staff in clean energy roles, creating more jobs. 
  • Financers can charge larger premiums compared to large-scale utility projects. 

What Community Energy Projects Mean for Credit Unions

Credit unions can take advantage of this ramp-up of community energy projects by partnering with developers who need lenders for the projects. Bret Turner, Market Manager, Project Finance at Silicon Valley Bank (SVB), told Reuters that lenders should look to engage with developers who have “an ambitious renewable portfolio standard (RPS), a low solar penetration rate, supportive market conditions for community solar credits, long-term eligibility of projects, an ability to secure commercial and residential subscribers, and cooperation from utilities.”



Established in 1998 and headquartered in Simi Valley, CA, AVANA CUSO offers competitive and collaborative commercial loans. We partner with credit unions and connect them to investors across the United States. Additionally, we uniquely support and guide our partners through the entire full lifecycle of renewable energy loans. AVANA CUSO is a proud member of the AVANA Family of Companies.