The rise of community solar: A bright future

MAY 2025

By: Corporate Communications

Q&A with Jim Thoma, Managing Director, Distributed Energy and Infrastructure, Project Finance Americas, Siemens Financial Services 

We are seeing a growth in community solar projects. Why are these projects on the rise?

Community solar has emerged as an accessible way for individuals and businesses to benefit from the advantages of renewable energy. As the needs for clean energy solutions grow, community solar has become a scalable option in the energy transition. Community solar offers a unique opportunity for citizens and businesses who want to harness the benefits of solar power but may not be able to install solar panels due to financial restrictions or lack of space.

What is Community Solar?

Community solar is a clean energy model which includes a large solar array installed at a central location. The electricity generated by this array is shared by multiple participants, who usually subscribe to it. These participants include homeowners, renters, businesses, educational and healthcare institutions or even municipalities. The participants can buy a share of the energy produced by the community solar array, eliminating the need to install their own solar panels and reducing their electricity bills.

Recently, community solar has seen substantial growth, driven by technological advancements, policy support, and growing consumer demand for clean energy. According to the U.S. Department of Energy (DOE), there is “approximately 7.87 GW of community solar in operation in the U.S. as of June 2024. These community solar projects are in 44 states and localities, including the District of Columbia.” More states have been adopting regulations that support these projects, making it easier for utilities and developers to build, operate, and manage shared solar projects.

How has Siemens Financial Services (SFS) contributed to the growth of community solar projects?

SFS has made multiple investments to support the steady growth of community solar assets and enable ratepayers to access lower cost clean energy. For example:

• Our financing helped advance the construction and operation of a 122 MWdc community solar portfolio across 30 projects. Through this portfolio, underserved residential and corporate customers have access to the benefits of clean and reliable renewable energy, providing enough local solar energy to power over 17,000 households.
• Alongside other lenders, financing from SFS contributed to the development and operation of a 219 MWdc portfolio of community solar projects in Illinois and Maryland.
• We’ve also provided project financing for a 13.48 MWdc community solar project built on top of otherwise unusable land in the New York area, utilizing natural resources more efficiently.
• Supporting over 32,000 subscribers across 10 states, another one of our community solar customers is committed to providing residents and business owners with affordable energy.

What are the benefits of community solar?

There are many. They include:

1. Accessibility: Community solar provides a renewable energy option to citizens who otherwise couldn't access solar power due to technical, financial and/or operational barriers. For example, renters do not need to own property to gain access to solar energy. Those with limited roof space or low sun exposure can also potentially leverage solar energy through a community solar program.
2. Energy Equity: Low-income households, renters, and multi-family residents may not have access to the money needed to install solar panels. Community solar projects provide an equitable answer, allowing these groups to benefit from solar power without having to make a substantial investment.
3. Cost Savings: By subscribing to a solar array, participants in community solar programs typically save on electricity bills by subscribing to the project at a discount to the standard utility rate. The cost of solar panels and related technology has dropped significantly over the past decade. According to the Solar Energy Industries Association, “the cost to install solar has dropped by more than 40% over the last decade, leading the industry to expand into new markets.”
4. Grid Resilience: Community solar helps decentralize energy production, therefore strengthening the electrical grid. When energy generation is localized, through models such as community solar, losses through transmission lessen and resilience in the face of extreme weather increases.
5. Environmental Impact: Community solar is a form of renewable energy. It powers the grid and reduces dependence on fossil fuels. As a way for individuals and businesses to reduce their carbon footprint, community solar can help promote wider adoption of clean energy.
6. Energy Independence: All of these benefits fuel energy independence. Community solar subscribers further reduce their reliance on fossil fuels. With local generation, there is less dependence on imported resources.

What does the future of community solar look like?

The future of community solar is bright as technology continues to improve and costs decline. However, there are still hurdles preventing widespread adoption. Connectivity varies by state, which brings regulatory complication. Even when capital is available, providers can face difficulty finding lenders to finance small projects.

A potential differentiator for community solar is the integration of storage technology. Coupling community solar with energy storage provides even greater accessibility, resilience, and independence. SFS has financed many energy storage projects.

Community solar can be an impactful way to combat climate change and create a more equitable energy future as more consumers, businesses, and communities embrace this innovative concept. Ancillary benefits can help fuel local economies, build community wealth, create local employment opportunities, generate cleaner air and water, and promote healthier communities.