What is community solar, and why do lawmakers want to bring it to Pennsylvania?

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In Pennsylvania, more solar panels are installed on the roofs of homes and in utility-scale solar farms each year.

But an increasingly popular third model — which boosters say “democratizes” solar energy — has yet to get off the ground.

At least 24 states, including Delaware and New Jersey, have passed legislation enabling a type of solar energy development known as community solar. For years, state lawmakers have tried unsuccessfully to add Pennsylvania to this list. With more federal incentives available for solar development through Biden’s 2022 climate bill, proponents say now is the time.

“I don’t want this money to just go to large industry that is looking to do solar,” said state Rep. Peter Schweyer (D-Allentown).  “I want to make sure everybody gets at least a bite of the apple.”

What is community solar?

While traditional residential rooftop solar is owned or leased by a single household, electricity from a community solar project is shared by several customers, known as subscribers.

“Community solar allows them to pool their money together and invest in a solar system, normally on a parking structure, empty lot — anywhere really that’s available,” said Moises Morales, who supervised the installation of community solar projects in Washington, D.C. and now works as lead instructor at solar installation and training company Solar States in Philly. “It allows them to buy in and then share the benefits.”

A community solar installation does not need to be located right where its subscribers live.

“The power [subscribers use] is always going to come from the grid,” Morales said. “The system that gets installed is feeding the power into the grid and it just goes where it’s needed. The grid doesn’t know what’s renewable and what’s not. … You’re just kind of feeding the power back into the grid and offsetting what you’re using.”

Community solar installations can be owned by a group of neighbors, a church or other nonprofit, a third-party solar development company, or a utility. Electricity generated by the installation enters the grid, and subscribers to the project receive a credit on their electricity bills proportional to the share of the project they lease or own.

“You pay an annual subscription fee and the cost of the power from that project shows up on your utility bill,” said Emily Schapira, president of the Philadelphia Energy Authority. The quasi-governmental authority runs Solarize Philly — a discount program that offers leasing options for rooftop solar in Philly.

Community solar capitalizes on economies of scale, Schapira said.

“It’s cheaper to install a larger scale solar project per kilowatt than it would be for your own roof,” she said.

Could community solar benefit a city like Philly?

Interest in rooftop solar is growing in Philly, people involved in the industry say. Solarize Philly has facilitated the installation of solar panels on the rooftops of around 2,700 owner-occupied homes over the last seven years.

But close to half of all households in Philadelphia rent. Without their own rooftops, community solar is the only way for many renters to directly participate in solar development, said state Rep. Donna Bullock, who represents Fairmount, parts of North Philadelphia and Mantua and has co-sponsored community solar-enabling legislation in the past.

“Community solar allows urban consumers to be able to partake in this green energy,” Bullock said.

Community solar is also a good option for homeowners whose roofs don’t get enough sun or for people who don’t have access to credit.

“It’s helpful for people who … aren’t able to afford to put solar on their home, but can afford subscribing to solar as part of a community solar project,” said Maryrose Myrtetus, director of the Philadelphia Green Capital Corp., which finances energy efficiency and renewable energy projects in the Philly area.

Some community solar programs encourage low- to moderate-income customers to subscribe by reserving parts of projects specifically for these customers or awarding a developer more renewable energy certificates when lower income customers subscribe, according to the National Renewable Energy Laboratory.

Because people with lower incomes spend more of their money on electric bills, they could benefit most from affordable, green energy.

“In other states, they’ve designed the model to be such that there are actually savings associated with it — so you would reap the savings on your electric bill,” Schapira said.

In Philly, organizations including Centennial Parkside CDC in West Philly have already expressed interest in building community solar projects. 

“It’s a very, very, very minor part of the solar industry as a whole, but one with potentially the most potential to impact people on the day-to-day,” Morales said.

Could Pennsylvania legalize community solar this year?

Right now, community solar is not viable In Pennsylvania for several reasons.

It’s an “unresolved question” whether a community solar project can have multiple subscribers without being regulated as an energy manufacturer, said Rep. Schweyer. There’s also no defined way for community solar projects to sell excess energy back to the grid, he said, and there’s no financial subsidy, which is necessary to help communities cover the upfront cost.

Schweyer and other state lawmakers — both Democrats and Republicans— have tried for years to change this. But bills introduced to the state House and Senate in both 2019 and 2021 that would have enabled community solar in the commonwealth got stuck in committee.

“I think everyone [agrees] that community solar is good,” Rep. Bullock said. “How we do it can sometimes be where the disagreements happen.”

Utilities like PECO have opposed these community solar bills in the past. Sticking points include whether utilities need to buy excess power and renewable energy credits from community solar projects, and whether community solar subscribers need to pay distribution costs — charges that don’t reflect the cost of the electricity but rather the costs to maintain the infrastructure.

“The big fight … was always, where does the subsidy come from?” Schweyer said. “Originally we were looking at subsidies coming from ratepayers, and that was a non-starter for all of us once we realized what its actual impact was going to be.”

A community solar bill Schweyer introduced in the state House in November aims to stay narrowly focused on community solar — avoiding hot-button issues that have derailed previous efforts, like net-metering and whether utilities can own facilities that generate electricity. He hopes the state can use federal money from the Inflation Reduction Act to subsidize community solar development, rather than pull that subsidy from other electric ratepayers.

Schweyer said Thursday he’s still negotiating bill language with electric companies, solar developers, and technical experts — including over how excess energy from community solar projects would be sold back to the grid and whether electric distribution companies would need to buy it. Schweyer plans to amend the bill and expects it to be voted out of committee next month.

Rep. Bullock, of Philly, said she plans to support Schweyer’s bill, but will keep an eye on the details to make sure it allows for discounted rates for low-income community solar subscribers and does not place the cost of community solar infrastructure on low-income, non-solar utility customers.

It appears this latest version of the bill may finally win PECO’s support.

Company spokesperson Brian Ahrens said in an emailed statement that the utility supports community solar in general, and that Schweyer’s current bill — with some “modest technical changes” — would offer customers the option to subscribe to community solar “without shifting costs onto all utility customers.”

The Senate version of the bill, sponsored by state Sen. Rosemary Brown (R-Monroe), remains in the Consumer Protection & Professional Licensure Committee after being referred there last April.