Community solar has risen in popularity as the energy transition takes place across the country and around the globe. This alternative to traditional grid power offers a number of social, economic, and environmental benefits which will be explored in this segment.

In a nutshell, community solar is a solar farm owned by a private or public entity that supplies electricity to consumers, but there’s a little more to it than meets the eye. A solar developer is paid by someone to build a solar farm, and there are three options for funding. The utility can be asked by a community to lead a project, which is called a utility-sponsored project. A special purpose entity project is when a private investor, like an individual or a company, starts a solar farm. This kind of project includes group solar buys with multiple individuals in a community teaming together. Finally, a nonprofit can start a project on behalf of a group of people. The cost of construction is covered by the nonprofit, making it a nonprofit project. The owner of the solar farm then can sell (or give away) the electricity in a couple of ways. In the first way a consumer, like a household, can purchase a share of the solar farm – 3 panels for example. All of the electricity produced from those solar panels “belongs” to that household. The other way a consumer can purchase electricity is through a subscription service in which a consumer pays for a percentage of the electricity produced by the farm.

Here’s where it gets tricky. Technically speaking, the owner of the solar farm is, from a general legal standpoint, not allowed to sell electricity directly from the farm to the consumer because of something in Massachusetts called utility franchise law. Since community solar usually serves customers who are far away from the farm, transmission wires must be run from the source of the electricity to the user. According to Massachusetts law though, only utility companies can run wires across public streets, which would be a practical necessity for any solar farm. Even if a solar farm asks for approval from the utility to run the wires themselves, the utility companies are unlikely to approve any transmission wires: fewer customers will be reliant on the utility’s power – a threat to their business model. Even in states without utility franchise law, a similar setup is common because it’s the best solution for transmitting electricity from community solar farms. That way, farms avoid erecting a whole new set of transmission lines which could be prohibitively expensive. There are typically state-specific laws, enabling policies, or other regulations involved that are overseen by the state agency tasked with regulating electric services.

This is where net metering comes in, an important term when discussing electricity and the grid. The owner of the solar farm sells the electricity produced, via the wholesale electricity market, to the utility whose lines the farm will use to transmit the electricity, usually with a purchase power agreement (PPA). Net metering is essentially a billing tool that allows consumers to buy solar energy back from the utility to reduce the amount of non-solar energy the consumer purchases from the utility. The “meter,” (the physical device that measures a household’s electricity consumption) refers to the divide between energy created by non-utility entities – behind the meter – versus energy originating from the grid or utility – in front of the meter. Thus, the consumer buys the electricity back from the utility through virtual net metering (when the electricity is coming from far away like with a solar farm rather than rooftop solar) with a credit system.