Community solar: how it works and who can join
By the kWhCompare Editorial Team · Updated September 29, 2026 · 3 min read
Community solar is the easiest way to get the savings of solar without putting a single panel on your roof. It works for renters, condo owners and homes with shade, and in states with active programs, most subscribers save 5–15% on their electricity supply costs.
How community solar works
A developer builds a solar farm somewhere in your utility's territory. Instead of powering one building, the farm sends its electricity into the grid, and local households subscribe to a share of its output.
Each month, your utility calculates how much electricity your share produced and puts a credit on your electric bill. You then pay the solar company for those credits, at a discount. The difference is your saving.
Nothing changes at your home. You keep the same utility, the same meter and the same power lines. You don't own any equipment, and there's nothing to install or maintain.
What you actually save
Most programs are designed so you pay about 5–15% less for the credited electricity than its value on your bill. On a typical bill that's often $5 to $20 a month. It's not dramatic, but it's steady, and it requires no upfront cost.
Low- and moderate-income households often qualify for bigger discounts. Several states run programs, such as Illinois Solar for All, that offer free or heavily discounted subscriptions to eligible customers.
Where it's available
About two dozen states plus Washington, D.C., have laws that enable community solar. The largest programs are in New York, Minnesota, Massachusetts, Illinois, New Jersey, Maryland and Colorado. Other active states include Maine, New Mexico, Virginia, Delaware, Connecticut, Rhode Island, Oregon and California, though program sizes and enrollment windows vary.
Texas has no statewide community solar program, and in the competitive market you can't subscribe through your utility. Some city utilities and co-ops, such as Austin Energy, run their own local programs. Many Texas retail providers also sell renewable plans, which are a different product: see our Texas plan types guide.
Your state's page in our rate table mentions community solar if your state has a program.
Community solar vs rooftop solar
| Community solar | Rooftop solar | |
|---|---|---|
| Upfront cost | None | High, unless leased or financed |
| Typical savings | 5–15% on credited power | Much larger over the system's life |
| Roof needed | No | Yes, with good sun |
| Works for renters | Yes | Rarely |
| If you move | Transfer or cancel | Sell with the house |
What to check before you sign
- Contract length: some run 20 years, others are month to month. Shorter or cancelable is better for most people.
- Cancellation fee: look for no fee, or a small one, especially if you might move.
- Guaranteed discount: a fixed percentage off the credit value is simpler than a fixed price per kWh that could end up above your utility rate.
- Price escalator: some contracts raise the price every year. Know by how much.
- What happens if you move: can you take the subscription to a new address in the same utility area?
- Credit timing: credits can lag a month or two behind the bill they apply to, so your first bills may look uneven.
Is it worth it?
If your state has a program and you can find a subscription with no cancellation fee and a guaranteed discount, community solar is close to free money: a modest, reliable saving with almost no downside. It won't transform a high bill on its own, so pair it with the basics: know whether your rate is fair and tackle what's driving your usage.
See how your state compares and what options you have.
Frequently asked questions
How does community solar save money?
You subscribe to part of a local solar farm, receive bill credits for its output and pay the solar company less than the credits are worth, usually 5–15% less.
Can renters join community solar?
Yes. Nothing is installed at your home, so renters and condo owners can subscribe.
Is community solar available in Texas?
There's no statewide program, but some city utilities and co-ops, such as Austin Energy, run local programs.
Can I cancel a community solar subscription?
It depends on the contract. Many allow cancellation with notice and no fee, but some charge fees or run for many years. Check before signing.
Sources
- Solar Energy Industries Association (SEIA), community solar and state policy resources (seia.org)
- U.S. Department of Energy, community solar basics (energy.gov)
- Illinois Power Agency, Illinois Solar for All (illinoissfa.com)
Figures are checked against these sources when each guide is updated. See how we research and calculate. This guide is for general information and isn't financial advice.