What To Know About Community Solar As California Expands Program

The California Public Utilities Commission has approved a rule to expand “community solar,” which could boost solar access and help lower utility bills for renters and people who can’t put solar panels on their own rooftops.

What is community solar?

Community solar refers to moderately-sized solar projects — not as big as those massive solar fields in the desert, but not as small as solar panels on a single home’s rooftop. Community solar projects can be installed by solar developers, governments, and individuals or businesses in spaces such as parking lots, warehouse rooftops and empty lots.

What does community solar mean for renters?

Community solar doesn’t require you to own the roof that the solar panels will be on. You also don’t need to have a direct connection from your home to the solar power site — generally you subscribe to the program through your electricity provider.

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Community solar programs can significantly expand clean energy access to renters who don’t own their own roofs, as well as lower- to moderate-income folks.

The background

California has had community solar incentive programs in place for a decade with the goal to expand, particularly in lower-income communities. Those efforts have not taken off in urban areas like L.A. largely because the cost of building is so expensive.

Current subsidies and electricity prices — particularly now that California generally has more solar power than it can use during the day — means the finances don’t pencil out for solar developers. The programs also don’t allow community-based groups to help spearhead community solar projects. A state law passed in 2022, AB 2316, directed the California Public Utilities Commission to address these issues by developing the new rule.

Details of the new rule

The new rule approved on Thursday expands existing community solar programs for low-income communities. Subsidies attached to those programs cut customers’ bills by 20%.

The rule also approves a new community solar program for commercial and residential customers of all income levels. Half of the people who participate in those projects, however, must qualify as low-income. These projects will be funded in part by a $249,800 federal grant from the Biden Administration's Inflation Reduction Act.

The response 

The vote was not unanimous — commissioner Darcie Houck voted against it, saying the rule will hinder efforts to expand community solar.

A coalition of solar developers and clean energy, environmental justice and ratepayer advocates say the new rule doesn’t provide enough subsidies to get community solar off the ground. Assemblymember Chris Ward, the author of AB 2316, said the CPUC’s new rule was “fatally flawed.”

Supporters see it differently. Commission president Alice Reynolds, who voted for the rule, said community solar plays a role in California's clean energy future. She argued that, like with rooftop solar, it leads to lower utility bills for people who opt in, but can raise bills for people who don’t. Those issues led to the state slashing rooftop solar incentives in 2022.

Brandon Smithwood, with solar company Dimension Renewable Energy, said the rule doesn’t necessarily end community solar, but that the federal funding is key to his hope for it ultimately growing in California. He was part of that coalition that developed an alternative community solar proposal to avoid the “cost shift,” but the state ultimately rejected that proposal.

“There’s an opportunity to take that quarter billion to make a down payment on something that can be evolved into the vibrant community solar market we were all working towards…or it could be squandered,” he said.

What’s next

This summer, the state is expected to hold workshops and hearings to finalize the new program being launched under this rule. That plan will need to be finalized by the end of summer. By fall, the federal government plans to disperse the grant money to states, and funds must then be allocated to projects within a year. You can follow the status of the ruling here.