Benefits of Community Energy for Local Communities

Benefits of Community Energy

Community energy projects can offer the opportunity to engage local communities in renewables and other sustainability measures. Their success can amplify the impact of energy projects at scale and accelerate the energy transition.

Residents who subscribe to community solar programs can receive credits on electricity bills for their share of a larger installation. These programs are an excellent option for those who cannot install rooftop installations due to costs or roof constraints.

Economic Benefits

Community energy is critical to a more holistic approach to energy system change. For example, community energy groups found that they not only cut carbon emissions but also provided jobs and incomes for local people. This approach to decentralized solutions could accelerate the energy transition globally, mainly when supported by enabling policies, including property-assessed clean energy (PACE) laws, community choice aggregation, and state (feed-in tariffs).

Installing home solar is expensive — typically costing tens of thousands for a 5-kilowatt system. For lower-income consumers, the investment can be prohibitive. In contrast, community solar is designed to share the economic benefits with residents by leveraging the scale of many subscribers and allowing participants to participate for as little as a hundred dollars each.

Additionally, community solar programs often include carve-outs for low-income communities to increase access and equity. This aligns with ILSR’s fourth principle for society’s renewable energy: access for all.

Stakeholders interested in evaluating their own state’s community-shared solar program can use tools to compare it against the criteria for an effective, equitable program. It is based on the same model rules used to grade active state programs for its National Shared Renewables Scorecard. It also provides other resources to help stakeholders build and expand community solar, including a webinar and the Policy Guidelines and Model Provisions.

Environmental Benefits

Community energy brings financial benefits back to those who generate and use clean energy. By empowering local communities to invest in renewable power, they can compete with big extractive energy monopolies that exacerbate the climate crisis. This is why the outdoor company recently released a new film highlighting a growing network of citizens taking action with community solar to drive legislative change that allows their local communities to benefit from producing their renewable energy.

Unlike fossil fuels, which produce greenhouse gases directly affecting the climate, community solar projects have only clean, renewable electricity. Fossil fuel mining and oil and gas drilling destroy habitats. At the same time, coal combustion releases a host of air pollutants, including sulfur dioxide, nitrogen oxides, carbon monoxide, mercury, and particulates, that are detrimental to animal and plant life and human health.

Several barriers keep families from investing in a solar energy system or other energy efficiency improvements, such as cost, technical and regulatory issues, and the ability to secure a loan. This is especially true for low- and moderate-income households. However, community solar projects can help address some of these challenges by providing affordable, clean energy to all residents. Check out the community solar checklist to learn how state programs promote this essential energy solution.

Social Benefits

Additionally, community shared renewables bring the benefits of renewable energy production back into the hands of citizens, where they can be used to tackle local climate change and other challenges. This has great potential to challenge the big extractive power monopolies that exacerbate our global energy crisis.

A network of more than energy cooperatives now exists, bringing renewable energy within reach for their members. These groups are helping to cut carbon dioxide emissions, combat fuel poverty, and provide training and jobs for their local communities. For example, it works with low-income residents in the inner city area to bring clean energy into their homes. 

Many forward-thinking states and utilities support community-shared renewables with virtual net metering and solar community policies. These programs enable consumers to aggregate their electricity use with other community members and receive bill credits for the energy produced. These programs also provide carve-outs for historically marginalized communities, which aligns with the fourth principle of community renewable energy: access for all.

The program has helped to bring community-shared renewables to a broader audience by creating an online resource center for community developers, policymakers, and others interested in implementing these initiatives. 

Health Benefits

A transition to 100% clean, renewable energy benefits all living creatures. Coal mining destroys wildlife habitats, while fossil fuel burning releases harmful gases into the air, including carbon dioxide, sulfur oxides, and particulates. These pollutants harm the health of humans, animals, and plants alike. Community renewables like solar power reduce or eliminate these emissions, helping people and other species breathe more easily.

In addition, community-based projects create training and job opportunities. The non-profit Energy cooperative, for example, brings renewable energy to residents in most disadvantaged neighborhoods. Its goals include cutting carbon emissions, fighting fuel poverty, and generating community business opportunities.

One way to expand the economic opportunity of community energy is to change the rules to allow communities to develop and share ownership of wind and solar projects. But three significant barriers still prevent the widespread expansion of community energy.

The first barrier is raising capital for projects. Many successful community energy projects use a third-party “tax equity” partner to access tax incentives. But that model limits participation to existing entities such as a community institution, local government, or place of worship.

Community-based projects that raise capital through a new community-based entity can overcome this barrier. However, doing so requires the project to educate subscribers on investment risks and other details.

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