More Oregonians are using solar energy than ever before! Residents that want to run their homes with solar PV panels have two main options. They can either install solar panels on their property or join a community solar farm.
The second option typically involves paying a monthly fee for electricity from a solar farm in the general vicinity. Due to recent policy changes over the last five years in Oregon, there are numerous community solar farms across the state.
At Smart Solar Energy, we periodically speak with solar shoppers in Oregon who wonder if they should join a farm or hire us to install panels on their home. Although community solar farms are certainly a good option for some households, they aren’t ideal for everyone. So, let’s examine how community solar farms work and if joining a project is a smart choice for your household.
What is community solar?
Community solar gardens are projects that provide power for a group of households or businesses. It allows them to benefit from the energy produced from the project, but without having solar panels installed on their individual properties. Often, the energy from community solar farms costs less than the energy purchased from local utility company.
It’s relatively new to the solar market and is a unique option that allows more families and small businesses to join the renewable energy movement. These projects utilize a concept called virtual net metering, where customers receive credits on their utility bills from clean power generated at a community solar location.
Community solar farms exist in 39 states plus Washington D.C., and as of December 2020, they represent over 3,000 megawatts of installed solar energy capacity. These solar installations are growing in popularity, especially in states with supportive policies. However, in other states, policies make community solar farms prohibitively expensive or difficult to develop.
California, Colorado, Florida, Illinois, Maryland, Massachusetts, Minnesota, New Jersey, and New York are the top states for community solar. However, some states do not have policies supporting community solar installations and are therefore less common in those states.
How do community solar farms work in Oregon?
In Oregon, a law was passed in 2016 in support of community solar farms. However, it has taken several years to design the program and to get it started. It was finally launched in early 2020.
To participate, residents must be a Portland General Electric, Pacific Power, or Idaho Power customer. Therefore, people living in Portland and Salem are eligible, but not people living in Eugene, Oregon are not. That said, Eugene Water & Electric Board (EWEB) does offer incentives for people installing solar systems on their homes or businesses. This program is on a first-come-first-serve basis and lowers the total cost of installing a solar energy system.
There are initial capacity limits on the program of 160 MW of solar capacity. Of this, 80 MW is being released in January, and the remaining 80 MW will be released on a date determined by the Oregon Public Utility Commission (OPUC). OPUC must approve any future additional capacity.
What are some of the approved community solar farms in Oregon?
Some of the capacity for community solar farms is reserved for small or community-led projects, and some projects are specifically designed to serve low-income communities. The idea is to make solar development more equitable, especially in low-income neighborhoods or neighborhoods of color.
Currently, a variety of approved projects are under various stages of development. For example, Rose Community Development has affordable and subsidized units in southeast Portland. It installed a 40-kilowatt community solar project in 2020 so that residents can source renewable electricity.
On the Port of Portland property across from the PDX airport, there is a 1-megawatt solar project on a 6-acre parcel. The goal of the Goodling Annex project is that the nearby Cully neighborhood residents subscribe 60% of the project capacity and seek out Portland Clean Energy Funds to offset costs. This installation involves collaboration between multiple groups, including Bonneville Environmental Foundation, Verde, and GRID Alternatives.
Another interesting community solar project is for the Oregon Shakespeare Festival in Talent, Oregon. The 125-kilowatt solar system will power the theater company, and batteries provide backup energy during utility grid outages. The project brings together many stakeholders, including Solarize Rogue, which has been financing development costs.
In addition, a variety of larger projects have been built or are currently under construction. For example, the Carnes Creek Solar project is located in Marion County, a little north of Salem, Oregon. This is a 2.5-megawatt solar array on 12 acres in the Portland Gas & Electric utility district.
In Woodburn, the Williams Acres project is a ground-mounted array with single-axis tracking and bifacial solar panels. This means that the solar system will turn to face the sun to produce more electricity, and it generates power from both sides of modules. This 2.5-megawatt project is intended for small commercial use and has minimum and maximum prescription size limitations. Therefore, the project isn’t open to residential subscribers.
How much does it cost to join a community solar farm in Oregon?
The exact cost depends on the size of the subscription to a community solar farm. We don’t recommend oversizing the subscription because the solar credits do eventually expire. This means you could be paying for power that you don’t consume.
Members of a community solar farm in Oregon pay in one of two ways:
Variable Prescription Plans
Also known as pay-as-you-go plans, members sign up for a portion of a solar farm and make monthly payments for the energy that portion produces. Therefore, they will likely pay less in the winter when we have more cloudy weather and shorter days and pay more in the summer.
Fixed Prescription Plans
With this option, subscribers sign up for a proportion of a solar farm and pay a fixed monthly fee based on the size of the subscription. As the name implies, with this plan, the payments are the same throughout the year.
Who benefits from community solar farms in Oregon?
Unfortunately, not everyone that wants to use solar electricity can install a solar power system on their home. Community solar farms are ideal for renters, low-income residents, and people with heavily shaded roofs.
If you don’t own the property where you live, it probably doesn’t make sense to install a solar PV system unless the landlord will pay for it. If a renter installs the solar system, they will not be eligible for the 26% federal tax credit or benefit from the increased property value.
If the property owner is willing to install the solar system, they are eligible for the tax credit. If you are a renter, the two best options are to join a community solar project or ask the landlord to install the system.
Heavily Shaded Properties
Although we love trees at Smart Solar Energy, they aren’t often a good match with PV systems. Solar panel systems require direct sunlight to produce electricity at peak performance. If a property is significantly shaded, then a community solar subscription is likely a better option.
This is especially true if you have evergreen trees, like Douglas Fir or Western Hemlocks shading your property because they don’t lose their leaves in the winter. Also, trees on the south side of the home can cast the most shade on a solar system, while a tree on the north side might not impact your solar production.
That said, your property doesn’t need to be in full sun either. It is most critical for your solar system to get direct sun during the midday hours when the sun’s rays are strongest. So, a little early morning or late afternoon shade won’t significantly impact your total solar energy production. In addition, some homeowners can trim their trees a bit to substantially increase their solar energy potential. However, if other buildings are shading your roof or property, it is difficult to solve for this.
If you’re looking to install solar on your residential property, it doesn’t necessarily need to be installed on the roof of your home. A sunny garage or grassy area can be an excellent location for a ground mount system. We can tell you if your property is well suited for solar panels and the best location by requesting one of our Proprietary Solar Energy Audits. We pride ourselves on our honesty and won’t try to sell you a system if your property is too shaded.
If you do have a heavily-shaded property, joining a community solar farm could be a great idea because the solar panels aren’t mounted on your property. This arrangement allows you to take advantage of the sunshine falling on a different property.
In Oregon, there are specifications to make community solar farms more accessible to low-income residents. For example, low-income households enjoy the same benefits but have a reduced subscription fee of at least 20% and no upfront or termination fees. To qualify, there is a special screening process. Residents must be a customer of Portland General Electric, Pacific Power, or Idaho Power and meet specific income requirements.
At Smart Solar Energy, we want to make owning a solar system an option for as many people as possible. As a result, we offer a solar loan program in partnership with local credit unions. Our customers typically enjoy a 12-year loan with a 2.99% interest rate, but other options are available such as longer loan periods. Also, some Smart Solar Energy customers choose to use a home equity line of credit. Contact us to learn more about this program.
What are the disadvantages of joining a community solar farm in Oregon?
Although there are many advantages to using solar energy, there are also some downsides to joining a community project compared to installing panels on your home.
Not Being Eligible for the Solar Tax Credit
The federal government offers a 26% tax credit for residential and commercial solar systems. This is a dollar-for-dollar reduction in income taxes owed to the IRS. Therefore, a $15,000 solar system could qualify for a $3,900 tax credit!
Unfortunately, these credits are only available for people that own the solar system and are not available for community solar farm members. This is because the tax credit goes to the company that owns the solar energy project.
Receiving Only Part of the Utility Savings
Although the terms vary by the project, especially for low-income residents, most community solar farm members save only 5 to 15% on their Portland General Electric, Pacific Power, or Idaho Power bills. Although this is noteworthy, it isn’t a dramatic cost savings. Also, the cost to community solar farm members is set to go up as utility prices increase, so the cost savings won’t likely proportionately increase as rates go up.
By contrast, if you own your solar system, you can virtually eliminate your electricity bills for 25 to 30 years. This means that the total long-term savings of installing a solar system are far greater than joining a community solar farm.
Impacts on Wildlife Habitat
Although there are exceptions (such as the Rose Community Development in Portland), most community solar farms are installed on the ground, not on rooftops. Sometimes, this land needs to be cleared of trees, impacting wildlife habitat. Other times, agricultural land is used, taking it out of production. Typically, solar farms have fences around them, obstructing the movement of some larger animals. Unfortunately, solar farms can impact migration corridors, especially when the projects are large.
Depending on how the project is managed, the solar development can impact the environment. Sometimes, the solar panels are surrounded by gravel, and non-native grasses and pesticides are applied to prevent shading on the solar panels. These actions can have a detrimental impact on biodiversity and soil and water quality. However, solar farm managers can take actions to mitigate the environmental impacts of a solar farm.
In some rare cases, native wildflowers are planted to produce pollinator habitat. A few solar farms have used sheep to mow the grass instead of gas-powered mowers and pesticides. Some developers also use fences with larger openings to allow smaller mammals to enter the project site to forage or seek prey.
By contrast, solar installations on roofs typically have less additional impact because they use an existing structure. This is because the home has already been constructed and will remain there, regardless of the solar system. It also uses less metal in the racking system to mount the panels on the roof compared to a ground-mounted solar farm.
Also, rooftop solar installations don’t require clearing land, although some homeowners might trim a tree or two to boost solar energy production. By comparison, the impact of a rooftop solar system compared to a solar farm is negligible.
No Increase in Property Value
One of the greatest benefits of going solar is the increase in property value. Many studies have shown that installing solar panels boosts the resale value of a home. This is because home shoppers are willing to pay more for a home with lower utility bills.
For example, a Zillow study from 2018-2019 showed a 4.1% increase in the sale price of homes with solar systems compared to homes without. But, unfortunately, joining a community solar farm doesn’t increase the value of your home.
How will the community solar farm movement in Oregon change over time?
The initial capacity limit on the program is 160 MW of solar capacity, and OPUC must approve future additional capacity. Therefore, what the future holds for community solar is yet to be determined.
“While we agreed to allow the adjusted program to move forward to capture more residential customers, including low-income customers, we will not further expand the program until all existing capacity is subscribed, including capacity reserved for small, community-based programs,” said Oregon Public Service Commission Chair, Megan Decker. “The legislative goals of the program are challenging to balance with its current design, which may need to change significantly before it could be expanded further.”
Is it better to own my solar panels?
Ultimately, whether or not it makes sense for you to join a community solar farm depends on your property, financial situation, and goals. For renters, people with shaded properties, or low-income households (that meet the required guidelines), joining a solar farm is likely a great choice. For homeowners with sunny properties, installing solar panels will likely result in greater long-term savings and be better for the environment.
Want to learn more about installing solar panels on your home?