Community Shared Solar: Policy and Regulatory Considerations

Shared solar, also called community solar, is an increasingly popular business model for deploying distributed solar technology. Shared solar projects allow customers that do not have sufficient solar resource, that rent their homes, or that are otherwise unable or unwilling to install solar on their residences, to buy or lease a portion of a shared solar system. The participant's share of the electricity generated is credited to their electricity bill, as if the solar system was located at their home. The shared solar model expands the availability of distributed solar to a broader customer base, offers economies of scale to project developers, and may reduce the cost of incentive programs and address concerns of cross-subsidization across utility ratepayers. Increasing numbers of utilities, cities and community groups across the U.S. are hosting shared solar projects. In some cases, however, policy or regulatory barriers present challenges to program implementation. This paper explores the ways in which the shared solar business model interacts with existing policy and regulations, including net metering, tax credits, and securities regulation. It presents some of the barriers that shared solar projects may face, and provides options for creating a supportive policy environment.