How Does Community Solar Work? The Mechanics Explained

Community Solar is simple in theory. A local solar farm generates electricity, you subscribe to a share, and you get credits on your utility bill.

The 90-Second Summary

Community Solar works in four steps:

1. A solar farm is built in your utility territory.

2. You subscribe to a share of that farm's output.

3. The farm sends electricity to the grid, not your house.

4. Your utility credits your bill for your share's production. You pay the subscription manager at a 5-20% discount, and pocket the difference as savings.

Step 1: A Solar Farm Is Built in Your Utility Territory

A developer builds a solar project in your utility service area. Often on:

• Capped landfills

• Rural fields or brownfield sites

• Carports over parking lots

Who Owns Them

Solar owners and operators like Altus Power. The operator handles maintenance, insurance, and regulatory compliance for the 25-30 year project lifespan.

Step 2: You Subscribe to a Share

How Share Size Is Determined

Your share is sized to match your typical annual electricity consumption. A household using 10,000 kWh/year would get a share producing ~10,000 kWh/year.

What You Pay to Subscribe

Zero upfront. The subscription manager makes money on the spread between utility credit rate and what they charge.

Step 3: The Farm Generates Electricity and the Grid Absorbs It

The solar farm sends electricity onto the utility grid. You do not receive any physical electricity from the farm. Your home continues to draw from the grid.

Community Solar is an accounting mechanism, not a physical routing of electricity.

How Production Is Tracked

The utility installs metering on the solar project. Production is measured monthly, combined with subscriber share data to calculate each subscriber's credit.

Why the Grid Accepts the Electricity

Solar farms are grid-connected generators. They sell electricity into the grid at wholesale rates. The electricity flows to whichever nearby customer is drawing power.

Step 4: Your Utility Credits Your Bill

This is where Community Solar turns into actual savings. The mechanic is called virtual net metering.

The Credit Calculation

Each month, your utility converts your share's production into a bill credit at the utility's retail rate or state-set tariff.

Example: Your share produces 800 kWh. Utility rate: 20 cents/kWh. Credit: $160.

What You Pay the Subscription Manager

You receive a separate invoice for the 800 kWh at a discounted rate. 10% discount: you owe $144.

Your Net Savings

Utility credits you $160. You pay subscription manager $144. Net savings: $16.

Over a year, roughly $190 for a household with 9,600 kWh usage.

See how Community Solar credits work for detailed billing example.

Why Utilities Participate

Because state legislatures passed laws requiring utilities to administer Community Solar programs. Utilities also benefit: Community Solar helps them hit renewable energy requirements and reduces peak electricity purchases from fossil fuel generators.

How Community Solar Differs From Other Solar

Versus Rooftop Solar

Rooftop: physically generates at your home, higher lifetime savings ($30K-$80K over 25 years).

Community: no physical installation, lower per-subscriber savings but much broader eligibility.

See Community Solar vs rooftop solar.

Versus Utility-Scale Solar

Utility-scale projects (100+ MW) sell directly to utilities. Subscribers have no direct relationship.

Versus Green Power Programs

Green power programs are voluntary premium contributions. Community Solar is the opposite: you pay less, not more.

Example: An Ithaca Subscriber

Subscriber: Three-bedroom home in Ithaca, NYSEG. Annual usage: 9,000 kWh. Rate: 18 cents/kWh. Annual bill: $1,620.

Enrollment: NY CDG program, 80% usage offset, 10% discount.

Production through a year:

• Summer (Jun–Aug): 900 kWh/mo. Credit: $162. Adjusted By Discount: $145.80. Net savings: $16.20/mo.

• Winter (Dec–Feb): 300 kWh/mo. Credit: $54. Adjusted By Discount: $48.60. Net savings: $5.40/mo.

• Shoulder months: 600 kWh/mo. Credit: $108. Adjusted By Discount: $97.20. Net savings: $10.80/mo.

Annual result: 7,200 kWh allocated. Credits: $1,296. Adjusted By Discount: $1,166.40. Net annual savings: ~$130.

Over 10 years: ~$1,300 saved with zero upfront investment.

Frequently Asked Questions

How long does it take to start seeing credits?

2-3 billing cycles after signup.

Do I receive two bills or one?

It depends on how billing works in your market.

If you're on utility consolidated billing (one bill): Your solar credit and your subscription charge both appear on your regular utility bill. The credit is applied first, the subscription charge is subtracted from it, and you pay one amount to your utility — the same way you always have. Nothing new to set up, no second payment to track.

If you're on dual billing (two bills): You'll get your usual utility bill, which now shows a solar credit applied to it, plus a separate monthly invoice from us for the subscription. Two bills, but the two amounts added together are less annually than what your old single utility bill would have been. That's the whole point of the discount.

Either way, your total cost goes down.

Can I turn my subscription on and off?

Most programs allow cancellation anytime with no fee.

Does weather affect my credit?

Yes. Seasonal fluctuation is normal, as shorter, cloudier days produce less electricity and more energy is generated in the summer when days are longer. Over a full year, production tends to match forecasts.

What if the solar farm has a problem?

The operator is responsible for maintenance. If the project you’re subscribed to goes offline, credits may stop until it is repaired. But don’t worry — your home’s electricity will never be impacted by your Community Solar farm.

Can I add Community Solar to my existing rooftop solar?

Usually no. Most state programs don't allow stacking.

Your Next Step

For billing details, see how Community Solar billing works.

To evaluate whether it's worth it, see honest worth-it analysis.

See if community solar is available in your state →

Altus Power is one of the largest owners and operators of commercial-scale solar in the United States, with 1.3+ GW of operating solar across 30 states and Washington DC. One of the pioneers of Community Solar, Altus serves more than 40,000 subscribers across 9 states including New York. Learn more about Altus Power or explore our Community Solar FAQ.