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Community Solar: Sharing Economy Meets Clean Energy

The sharing economy is a way for groups of consumers to share underutilized resources. Community solar brings this shared economy model to the realm of clean energy. It allows groups of people to share the energy from a solar array instead of each building their own.

Have you ever stayed at an Airbnb on vacation? Taken an Uber to the airport? Bought or sold an item on eBay? If so, congratulations! You’re a part of one of the biggest trends in business today: the sharing economy. It’s a system that allows people to share their resources instead of just buying and selling.

You’re probably already familiar with Uber and Airbnb. But you might not realize that community solar is also part of (and even an improvement to) the shared economy. Just as Uber allows you to go anywhere without owning a car, community solar allows you to enjoy benefitting from solar power without owning solar panels outright.

What is the sharing economy?

Most of the time, you function in the economy as an individual. For instance, when you go to the grocery store, you put food only into your own shopping cart. The sharing economy is different. A whole group of people share the same resources—as if you were all putting food into one big cart. Then each of you takes out only what you need, so nothing goes to waste.

Uber is a simple example of how this works. Suppose you own a car, but you only need it for yourself sometimes. At other times, you can share it with others by giving them rides. They pay you a fee for this, but it’s much less than the cost of buying their own cars. They save money, you earn money, and everyone benefits.

Online platforms and apps help connect people who have something to share with others who want to use it. Examples include;

  • Uber and Lyft for ride sharing
  • Wework for sharing office space
  • Letgo and eBay for reselling goods you no longer need
  • Prosper and LendingClub for peer-to-peer lending
  • GoFundMe for raising money
  • Rent the Runway and Sparetoolz for short-term rentals
Uber and lyft, part of the shared economy

Origins of the shared economy

Throughout history, people have always shared things. Our ancient ancestors shared homes, land, and food as a community. In the Middle Ages, animals grazed on shared pastures called commons. And people have resold their used goods to others for centuries.

The modern, tech-enhanced version of sharing grew along with the Internet. The World Wide Web launched in 1995, and so did eBay, which many people consider the first sharing economy site. It brought buyers and sellers from all over the country together, making it easier than ever to exchange used goods.

Scope of the shared economy

The sharing economy really took off after the global financial crisis of 2007 and 2008. Many people were trying to save money and earn extra cash, and sharing helped them do both. Airbnb and WeWork both started that year, and other sharing apps soon followed.

By 2020, the shared economy had grown to over 9,800 companies across 133 countries. More than 70% of Americans that year said they had used a sharing economy service or app. Over 35% said they had used three or more sharing services.

Benefits of the shared economy 

It’s hardly surprising that the sharing economy has grown so fast. The sharing model has many benefits for consumers, including:

  • No ownership required. Through sharing, you can get the use of an asset without needing to own it. Taking an Uber whenever you need a ride costs much less than buying, maintaining, and insuring a car.
  • More choices. If you need a loan, you can use peer-to-peer lending to connect with individual lenders all over the world. Having more choices means you’re more likely to find a better interest rate.
  • Lower costs for users. Sharing services are often cheaper than buying from big companies. A 2017 Brookings Institution report found that Airbnb room rates are 30% to 60% cheaper than hotels.
  • Saving resources. Why should 10 people own 10 different cars that they only drive 5% of the time? With a sharing model, they can all share one car and use it only when they need it. That means fewer new cars need to be manufactured, saving resources and energy.
  • Social connections. When you share resources like cars, tools, and garden space, you get to know people in your community.
An open field with large solar panel arrays, making up a solar farm.

Community solar and the shared economy 

Community solar is a way to extend the benefits of the sharing economy to solar power. It allows a group of people to share the output of a solar farm, rather than installing their own panels.

What is community solar?

A community solar farm is a relatively small solar array that sends electricity to the grid. Local residents can subscribe to that farm and receive a lower electric bill as a reward for supporting renewable energy. They don’t have to install anything, and their electricity bills come from the same utility as before. But each bill includes a discount—called a solar credit—for the energy their solar farm produced.

Community solar, also called solar sharing, is a fairly new concept. The first shared solar project, SolarShares, was built in Sacramento in 2007. Since then, this idea has grown by leaps and bounds. At end of 2021, there were over 3,200 megawatts of community solar capacity installed across 39 states plus the District of Columbia. Community solar even makes up the largest share of all solar installation in some states like Massachusetts. Their subscribers are helping tame climate change while keeping money from leaving their wallets.

Community solar infographic

How community solar relates to the shared economy 

Community solar brings the shared economy model to clean energy. Just as Airbnb allows users to share a room, community solar allows them to share a solar array.

Instead of each user installing their own solar panels, many users share power from the same solar farm. This is more efficient, since only one solar array has to connect to the grid. That, in part, makes it much cheaper for users.

Benefits of community solar

Joining a community solar project lets you enjoy all the benefits of solar power without needing to own anything. There’s no added cost and no hassle—just supporting clean, green energy and earning a discount off your electricity bill as a reward. 

Doesn’t require ownership

You don’t to have to own anything to take advantage of community solar. All you have to do is subscribe. That means there are no up-front costs or installation hassles. And if you move to a new home in the same area, you can take your subscription with you.

Gives more people access to solar

Installing a solar setup isn’t an option for everyone. Renters can’t put up solar panels on property they don’t own. Some homeowners don’t have a sunny roof, and others can’t afford the up-front cost. Community solar, by contrast, is open to anyone who pays an electric bill and has a project in their area.

Democratizes the power industry 

Many consumers can only buy electricity through the local utility. That can get expensive, and it gives them no way to choose green energy unless they can make their own. Switching power suppliers is an option in some states, but not everywhere. But community solar is available in many states, giving consumers more choices.

Helps the climate

To curb global warming, we need to switch from fossil fuels to renewable energy as fast as possible. Community solar is helping that happen. By giving more people access to clean power, it’s speeding the transition to a clean energy future.

Saves you money

Switching to community solar isn’t just great for the climate. It’s great for your wallet too. Thanks to state incentives, you can purchase community solar power at a lower rate than you’d pay to the utility. The discount varies from state to state, but it’s typically between 5% and 15%.

Strengthens communities

Lastly, shared solar is good for communities. Because community solar farms are local, building them brings jobs to the local economy. They also build wealth in the local economy by putting extra cash into their subscribers’ pockets. And even those who don’t enroll enjoy the benefits of cleaner air as solar displaces dirty fossil fuels.

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Am I eligible for community solar? 

Perch Energy makes it easy to answer that question. Our business model is all about providing access to clean energy for as many people as possible. We can connect consumers with community solar in every area where we operate.

If you live in one of these states, it’s easy to look for a community solar project near you. Just enter your ZIP code on the Perch home page, and you can see right away if you’re eligible. If you are, Perch can walk you through the steps to get signed up. And if there isn’t a spot available, we can get you on a waiting list.

Economic benefits of solar sharing  

Sharing is good for individuals and the economy as a whole. It makes all kinds of resources available to people who couldn’t afford them otherwise. It also puts money in people’s pockets to spend or invest, boosting the economy further.

And solar sharing has even more benefits on top of that. The damage caused by climate change is very costly for society. The faster we switch over to clean energy, the less we’ll spend dealing with the impacts of a warming world.

In short, community solar benefits individuals, communities, and the world as a whole. It’s a win-win-win.

Get matched to a local solar farm and save on your electricity costs.