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We’re glad you found us. And we’re proud to serve as a resource as you consider taking your home or business solar. In this Guide, you’ll find everything you need to know about solar co-ops.
Going solar is a rewarding decision to make, regardless of your reasons — and a solar co-op demystifies the process and ensures you get top quality, both in pricing and installation.
What is a solar co-op?A solar co-op is a group of property owners who use their combined buying power to save money going solar. We’ve helped thousands of people go solar in hundreds of co-ops across the country. If we don’t have an active program in your area, we can also help you go solar on your own.
Solar co-ops are member driven and free to join. You are never charged by Solar United Neighbors for participating in a solar co-op. As a solar co-op member, you will receive a personalized bid from a solar installer selected by the group. At that time, you can decide whether to move forward with your solar installation.
Buying solar as part of a group saves you money. Co-ops solicit competitive bids from installers, so you’ll get a great price on a personalized solar proposal. For installers, finding and acquiring solar customers is a major expense. Servicing our solar co-op members is less expensive for installers, meaning they can charge you less.
Solar co-ops offer support and peace of mind. Our team of solar professionals provides expert, independent advice to you throughout the process. We’re here to make sure you are armed with all the information you need to make informed decisions about your solar investment. Since we’re a non-profit – not an installer – our primary interest is making sure you have a great experience going solar.
Solar co-ops are free to join, and joining does not commit you to going solar. Solar co-op regions may be county-wide or even span multiple counties; members of the solar co-op do not necessarily live right next to each other. The process can take anywhere from three to nine months, depending on when you join the co-op. Most of our co-ops have between 30-100 members. They’re big enough to attract competitive bids from installers, but small enough to meet and connect with other members.
A new solar co-op starts with a series of free, public information sessions. Our experts explain the basics of solar technology, solar economics, and how our co-ops work. These information sessions are tailored to your area, since local policies and incentives can have a big impact on your experience going solar.
Joining your local solar co-op is free and does not commit you to going solar. We help you evaluate your property (typically the roof) for solar, and show you how going solar can add up to big energy savings.
Once there is a critical mass of solar co-op members (usually 20 to 30), Solar United Neighbors issues a request for proposals to local solar installation companies on behalf of the co-op. Co-op members volunteer to serve on an Installer Selection Committee that meets to review the submitted bids and selects one solar installer to service everyone in the solar co-op. Our team is present during the selection committee meeting to facilitate and provide technical expertise, but you and your fellow solar co-op members select the installer that best fits the local group’s needs and priorities.
Additional members can still join the solar co-op for a limited period of time after an installer is selected. The installer will work with each co-op member to develop a personalized proposal, at which point you can choose whether to sign an installation contract.
We do not charge members a fee to join a solar co-op. The selected installer pays a referral fee to Solar United Neighbors for each co-op member who signs a contract for solar. We use these funds to develop future co-ops. Since solar co-op members are educated about solar and their roofs have already been evaluated, our process saves the installer significant time and money acquiring and educating potential customers, ultimately saving you money as a consumer.
Solar financingFrom the first day you turn on your solar system, your energy bills will go down. How much money you save and how quickly depends on a few factors: how your system is financed, and how you are credited for the energy your solar panels generate.
Many solar owners choose to pay for their systems outright or with a personal or business loan. Loans are available up to 20 years in length. Most are unsecured (meaning they don’t require collateral) and rarely have penalties for early repayment. The savings you generate on your electricity bill from solar may equal or exceed the amount you are paying on your loan. So, even with a loan, you could be saving money from day one.
The most attractive loan is often a home equity line of credit (HELOC). These leverage the value of your home to improve it with the installation of a renewable energy system. Even with recent changes to the federal tax code, interest on HELOC loans used to buy, build, or improve the borrower’s home can be tax deductible.
With direct ownership, you can claim tax credits and other incentives for solar, and you retain the rights to any solar renewable energy certificates (SRECs) your system generates. If you live in a state with an SREC market, this can be a significant source of additional revenue from your solar installation.
(Our advice here is for informational purposes only. Consult your accountant and/or a tax attorney to determine how to properly take advantage of solar tax credits.)
In some states, property owners can purchase the electricity produced by a solar array without owning the system itself. In those states, you can use renewable energy and save money, while avoiding the up-front expense of installing and owning a solar array outright. Solar panels are installed on your home, but they are owned by the installer, who is responsible for system performance and maintenance. As a customer, you take advantage of cheaper electricity costs provided by solar.
There are two main types of third-party solar ownership: Under a power purchase agreement (PPA), the customer agrees to purchase the power generated by the panels, while under a solar lease, the customer pays a fixed, monthly fee.
With a PPA or lease, you will generally have two electric bills: one from your solar company for the electricity produced by the panels, and one from your utility company for any electricity you consume from the grid when your panels don’t produce enough electricity to cover your needs.
Unfortunately, not every state allows third-party ownership. One of our priorities at Solar United Neighbors is to change that.
Federal and local incentives can have a big impact on the cost of going solar. Below, we cover a few of the most commonly available incentives.In some cases, you may qualify for additional financing options, grants, or rebates based on local and state policies.
This tax credit provides a credit off the total cost of your solar installation. You still have to pay up front for the system, but you will receive a credit when you file your taxes. This tax credit only applies to federal income tax. The tax credit is not refundable, meaning that you can’t receive more money back than you paid. However, if you don’t owe enough in taxes to use the credit when you go solar, the IRS allows you to spread the tax credit out over several years, so you won’t lose out on your refund.
First passed in , the ITC is the most impactful solar policy in U.S. history. It has led to an average of 54% annual growth in solar since it was enacted. It was designed to lower the cost of solar and jumpstart the solar industry. And it worked. Members of Congress from both major political parties voted for the ITC, and it was signed into law by President George W. Bush.
The federal solar investment tax credit (ITC) is available for residential systems through . See below for how the credit declines over time.
Some locations offer state- or county-level incentives to residents who want to install solar. These may be cash grants, reduced permitting fees, or specialized assistance to low-income homeowners. A small number of utilities offer incentives for solar customers. You can learn more about solar incentives and unique financing options on our state pages.
Net meteringAt any given time, you may not be able to use all the electricity your solar panels generate. When your solar array is producing more power than you need, the excess power flows out through your electric meter and is used by nearby homes or other buildings. When your panels are producing less power than you need, or there isn’t enough sunlight to meet your consumption needs (e.g. at night), your house automatically draws additional energy from the electric grid.
Net metering is the policy that allows you to receive credit for the extra electricity your solar panels generate. The “net” energy that you’ve used at the end of your billing period (electricity used minus electricity generated) is what determines your final monthly electricity bill.
Some net metering policies are better than others. We believe utilities should value the electricity you generate at the same rate as the energy you purchase. However, some state laws allow utilities to compensate solar owners at lower rates and/or tack on additional service fees and charges. A bad net metering policy can significantly extend the time it takes to pay back your solar system.
Fighting for fair net metering policies for solar owners is one of our most important priorities at Solar United Neighbors.
It depends on your state or utility net metering policy. In most cases, if your solar array has generated more electricity than your home has used within a single billing period, the excess rolls over onto your next electric bill. It’s like ‘rollover minutes’ for your cell .
Rooftop solar energy has been shown to be a net positive for the electric grid and non-solar consumers as well as for solar owners. Locally produced solar energy avoids the high costs of transmitting electricity over long distances from centrally located power plants. This has been confirmed by numerous independent studies, many of which observe that solar provides energy during times of peak demand, when that power is most valuable.
No. Unfortunately, we hear this argument a lot. Net metering is about fairly compensating solar generators for the energy they create. It protects your right as a property owner to self-generate your own energy. Numerous independent studies by third parties and state utility commissions prove the benefits of net metering extend far beyond solar customers and far outweigh the minimal direct cost to utilities.
Solar Renewable Energy Credits (SRECs)In some parts of the U.S., owners of renewable energy generation facilities can be compensated above and beyond the value of the electricity they generate. These owners receive renewable energy credits (RECs), which represent the environmental, social, and other values of renewable energy generation. RECs may be bought or sold separately from the electricity that created them.
A solar renewable energy credit (SREC) is created when a solar energy system produces 1,000 kilowatt-hours (kWh) of electricity. An SREC may be “owned” by a utility, a customer, or a solar provider. SRECs fluctuate in value depending on supply and demand in the SREC market, which may be driven by consumer demand or by policies establishing renewable energy targets. SREC markets vary widely by state and utility district. A healthy market for SRECs can significantly speed up your solar payback period.
Solar owners can sell their SRECs anywhere within the PJM territory. PJM is the company that manages the electric grid for all or part of 13 states and the District of Columbia. (Source: PJM)
SRECs are bought and sold on an open market, and prices are determined by supply and demand. The more SRECs that are supplied to the market from solar projects, the lower their price. The higher the target for solar energy in a state, the higher the price of SRECs. Laws requiring renewable energy generation are called renewable portfolio standards (RPS). Instead of producing renewable energy themselves, utilities can choose to purchase SRECs on the open market.
This policy, also sometimes called a renewable energy standard (RES), requires a specific percentage of the electricity generated in a state to come from renewable sources. Utilities must either generate it themselves or purchase RECs in order to meet their renewable energy generation targets. The more aggressive your state’s RPS, the higher the REC prices, and the more quickly you can pay back your solar installation.
Similar to net metering policies, RPS policies can be strong or weak, depending on the percentage target, how quickly it increases, and what types of energy qualify as “renewable”. Another factor impacting REC pricing is the alternative compliance payment (ACP) that utilities must pay if they miss their target. RPS policies that include a specific target for solar energy are most effective at creating high SREC prices.
Once it has been certified and registered (your installer will help you with this), your solar system will produce one SREC every time it produces a megawatt-hour (1,000 kWh) of electricity. The best way to estimate your annual solar energy production is by using a tool like PVWatts, which takes into account your location, system size, and other factors.
SREC brokers help you sell your SRECs on a local or regional market. Most will offer different options with different levels of risk and reward, similar to selling stocks. Options may include:
Sell the rights to all of your system’s SRECs upfront for a cash payment.
Sell your SRECs under a contract for a set period of time — usually three, five, or ten years — for a guaranteed price.
Authorize your SREC broker to sell your SRECs immediately when the credits are generated.
Solar United Neighbors offers discounted SREC pricing for our co-op members and our annual and lifetime members. Please see our SRECs page for more details.
Solar energy technologyModern solar photovoltaic (PV) systems have two important parts: a collection of solar panels, called an array, and one or more inverters. Your solar array generates electricity from sunlight, and the inverter(s) make the electricity usable in your home. In addition to the array and inverter(s), there are also connecting cables, racking, and other minor parts referred to as the balance-of-system (BoS) components.
Solar PV systems directly generate electricity from sunlight without using heat. Solar thermal systems capture heat energy, generally to heat water. They do not rely on electrical currents. Solar thermal systems are sometimes called “solar hot water”. Some homes have both types of solar, but they are different technologies. Our solar co-ops focus exclusively on solar PV.
A group of solar panels wired together on a rooftop (or on the ground) is called a solar array. Individual solar panels are made of PV cells. These cells are made of refined semiconductors, typically silicon, that convert light energy from the sun into electricity. When light hits a solar cell, it generates a type of electricity called direct current (DC).
DC electricity isn’t compatible with most American homes and appliances, which run on alternating current (AC). Your solar installation will include one or more pieces of equipment called inverters, which convert the DC electricity from your panels into AC electricity that your home can use.
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Most solar homes remain connected (tied) to the electricity grid, seamlessly transitioning between consuming on-site solar electricity during the day to drawing electricity from the utility grid at night.
During a power outage, active grid-connected solar panels can be dangerous for utility line workers. Your solar array will automatically shut off to prevent back-feeding electricity into utility lines that are being repaired. You will need a home battery backup system in order to power your home when the grid is offline.
Inverters convert the direct current (DC) electricity produced by your solar array into alternating current (AC) electricity that you can use to power your home. Inverters are the second-most important – and second-most expensive – part of your solar installation, after the panels themselves.
The simplest type of inverter is a central or “string” inverter, which is installed near your home’s electric panel. Central inverters convert all the energy from your solar array into AC electricity at a single point, effectively treating your array as one large unit. Central inverters operate most efficiently if none of your panels are shaded by nearby buildings or trees; if even a few panels receive shading, reduced efficiency may result.
Another option is a set of microinverters, which attach to the panels directly and optimize the electricity generation of each individual panel. This means that if one or more panels receive shading, the energy output of the other panels won’t be affected. Microinverters can be more expensive to install but have the added benefit of monitoring how much energy each individual panel produces.
Central inverters are typically warrantied for 10-12 years; microinverters for 25 years. By comparison, your solar panels will typically last 25 years or more without significant performance degradation. Your installer will recommend an inverter configuration that best meets the needs of your custom installation.
Batteries and solar energyIf you rely on electricity to power life-sustaining medical devices or live in a home with an electric water pump, a power outage can have serious consequences. On-site solar energy provides part of the solution, but in order to keep the power on during an outage, you’ll also need batteries.
As prices fall, more and more prospective and current solar owners are considering installing batteries with their solar systems. Some of our solar co-ops offer an option to add battery storage (as well as electric vehicle charging). Some solar owners opt to install batteries to provide power during grid outages, for life-sustaining medical devices, or for other reasons.
Battery storage systems can take up room in your home, can require maintenance, and will likely need to be replaced during the life of your solar system. Many battery storage systems also require additional equipment, wiring, and configuration when being integrated into a solar system. Pairing solar and storage will keep your batteries charged and ready for use when the power goes out. If you might want batteries in the future, be sure to tell your solar installer during their evaluation of your property.
Batteries will increase the cost of your solar system. Their value is in reliability and peace of mind, not in saving money.
Battery storage systems are modular, so you can power as much of your home as you can afford. However, due to their high upfront cost and lack of economic incentives, most battery storage systems are designed to power only critical functions during a grid outage.
Installers size each battery system to meet the needs and preferences of individual customers. This process involves determining which appliances are most important for you to keep running during an outage, how much electricity you want to store, and for how long you would like to store it. Your installer will help you select the appropriate size and type of battery storage system to meet your needs.
The cost of batteries depends on how much backup power you need, and for how long. Those factors determine what hardware you’ll need, and what the installation and maintenance costs will be.
At prices, you can expect the addition of batteries to your home to cost between $6,000 and $20,000.
Solar panels are built to work in all climates, but in some cases, rooftops may not be suitable for solar systems due to age or tree cover. If there are trees near your home that create excessive shade on your roof, rooftop panels may not be the most ideal option. The size, shape, and slope of your roof are also important factors to consider. Typically, solar panels perform best on south-facing roofs with a slope between 15 and 40 degrees, though other roofs may be suitable too. You should also consider the age of your roof and how long until it will need replacement.
If a solar professional determines that your roof is not suitable for solar, or you don’t own your home, you can still benefit from solar energy. Community solar allows multiple people to benefit from a single, shared solar array that can be installed on- or off-site. Costs associated with purchasing and installing a solar energy system are divided among all of the participants, who are able to buy into the shared system at a level that best fits their budget. Learn more about community solar.
Those interested in community solar can take advantage of a tool from SETO awardee EnergySage. The company's Community Solar Marketplace aggregates the many available options in one place and standardizes project information, allowing interested consumers to easily locate and compare multiple community solar projects in their area.
The National Renewable Energy Laboratory (NREL) developed a tool called PVWatts for this purpose. It estimates the energy production and cost of energy of grid-connected PV energy systems for any address in the world. It allows homeowners, small building owners, installers, and manufacturers to easily develop estimates of the performance of potential PV installations, and can even compare solar’s cost to utility bills. These tools are great for getting started, but make sure to work with a solar installer for a custom estimate of how much power your solar energy system is likely to generate.
For its analyses, NREL uses an average system size of 7.15 kilowatts direct-current with a 3-11 kilowatt range. According to SETO awardee EnergySage, that’s enough power to meet all the energy needs for an average home in Austin, Texas.
There are a number of mapping services that have been developed by SETO awardees that will help you determine if your roof is suitable for solar and can even provide you with quotes from pre-screened solar providers in your area. In addition to those resources, an internet search can help you find local companies that install solar panels. Because you will likely have many options to choose from, it’s important to thoroughly read reviews of solar companies to make sure you are selecting the best fit for you and your home.
Solar co-ops and Solarize campaigns can also help you start the process of going solar. These programs work by allowing groups of homeowners to work together to collectively negotiate rates, select an installer, and create additional community interest in solar through a limited-time offer to join the campaign. Ultimately, as the number of residents who participate in the program increase, the cost of the installations will decrease.
Most people going solar have a positive experience. But like other fast-growing industries, the rampant expansion of solar energy has opened the door to a small subset of bad actors.
Our Smart Shopping Tips for Solar outlines a few ways to identify red flags as you go solar:
On August 7, , the U.S. Department of the Treasury (Treasury), the Consumer Financial Protection Bureau (CFPB), and the Federal Trade Commission (FTC) issued a consumer advisory to help you identify potential consumer solar scams and file complaints about suspicious behavior. Before you sign any documentation with a solar company, carefully review these educational materials:
Net metering is an arrangement between solar energy system owners and utilities in which the system owners are compensated for any solar power generation that is exported to the electricity grid. The name derives from the s, when the electric meter simply ran backwards when power was being exported, but it is rarely that simple today. Whether or not your solar system qualifies for net metering payments depends on policies and practices in your state and electric utility. Your local electric utility would be a good place to source information on net metering in your service area. When researching net metering policies and practices in your service area, there are some basic questions to consider, such as availability in your service area, eligible system size and customer type, rates, and design of bill credits.
Storage refers to energy storage, most often in the form of batteries. Installing energy storage with a solar system can help utilize the power generated when it’s needed most, regardless of whether it’s sunny outside at the time. Storage allows you to save that energy and use it later in the day, like when you turn the heat on at night or run the dishwasher after dinner or even when the power goes out. Ask your solar installer if they offer battery storage options and learn more about storing solar energy.
The amount of money you can save with solar depends upon how much electricity you consume, the size of your solar energy system, if you choose to buy or lease your system, and how much power it is able to generate given the direction your roof faces and how much sunlight hits it. Your savings also depend on the electricity rates set by your utility and how much the utility will compensate you for the excess solar energy you send back to the grid. Check the National Utility Rate Database to see current electricity rates in your area.
In some cities around the country, solar is already cost competitive with the electricity sold by your local utility. The cost of going solar has dropped every year since , a trend researchers expect to continue. Not only are the prices of panels dropping, so are the costs associated with installation, such as permitting and inspection—also known as “soft costs.” All of SETO's funding programs are working toward improving the affordability of solar and making it easier for consumers to choose solar.
It should also be noted that energy efficiency upgrades complement solar energy economically. By using Energy Star appliances and other products in your home, you’ll need less solar energy to power your home.
Consumers have different financial options to select from when deciding to go solar. In general, a purchased solar system can be installed at a lower total cost than system installed using a solar loan, lease, or power purchase agreement (PPA).
If you prefer to buy your solar energy system, solar loans can lower the up-front costs of the system. In most cases, monthly loan payments are smaller than a typical energy bill, which will help you save money from the start. Solar loans function the same way as home improvement loans, and some jurisdictions will offer subsidized solar energy loans with below-market interest rates, making solar even more affordable. New homeowners can add solar as part of their mortgage with loans available through the Federal Housing Administration and Fannie Mae, which allow borrowers to include financing for home improvements in the home’s purchase price. Buying a solar energy system makes you eligible for the Solar Investment Tax Credit, or ITC. In December , Congress passed an extension of the ITC, which provides a 26% tax credit for systems installed in -, and 22% for systems installed in . The tax credit expires starting in unless Congress renews it. Learn more about the ITC.
Solar leases and PPAs allow consumers to host solar energy systems that are owned by solar companies and purchase back the electricity generated. Consumers enter into agreements that allow them to have lower electricity bills without monthly loan payments. In many cases, that means putting no money down to go solar. Solar leases entail fixed monthly payments that are calculated using the estimated amount of electricity the system will produce. With a solar PPA, consumers agree to purchase the power generated by the system at a set price per kilowatt-hour of electricity produced. With both of these options, though, you are not entitled to tax benefits since you don’t own the solar energy system.
Navigating the landscape of solar financing can be difficult. The Clean Energy States Alliance released a guide to help homeowners understand their options, explaining the advantages and disadvantages of each. Download the guide.
DSIRE is the most comprehensive source of information on incentives and policies that support renewable energy in the United States. It is operated by the N.C. Clean Energy Technology Center at N.C. State University and was funded by the U.S. Department of Energy. By entering your zip code, DSIRE provides you with a comprehensive list of financial incentives and regulatory policies that apply to your home. Additionally, an experienced local installer should be able to assist you in claiming any state and local incentives, as well as the ITC.
If you want to learn more about state and federal solar policies regarding incentives and tax breaks, the Solar Power in Your Community guidebook (PDF) has a section—Appendix A on page 87—that explains it in detail.
Buying a solar energy system will likely increase your home’s value. A recent study found that solar panels are viewed as upgrades, just like a renovated kitchen or a finished basement, and home buyers across the country have been willing to pay a premium of about $15,000 for a home with an average-sized solar array. Additionally, there is evidence homes with solar panels sell faster than those without. In , California homes with energy efficient features and PV were found to sell faster than homes that consume more energy. Keep in mind, these studies focused on homeowner-owned solar arrays.
When it comes to third-party owned (TPO) systems, data shows that while they add some complexity to the real estate transaction, the overall impacts in terms of sales price, time on market, agreement transfers, and customer satisfaction are mostly neutral. In some cases, TPO systems can even add value.
The PV Value® tool is helpful for both home sellers and homebuyers. It calculates the energy production value for a PV system and is compliant with Uniform Standards of Professional Appraisal Practice and has been endorsed by the Appraisal Institute for the income approach method. Make sure your appraiser uses this tool to get the most accurate estimate of your PV system’s value.
There are two primary technologies that can harness the sun’s power and turn it into electricity. The first is the one you’re likely most familiar with – photovoltaics, or PV. These are the panels you’ve seen on rooftops or in fields. When the sun shines onto a solar panel, photons from the sunlight are absorbed by the cells in the panel, which creates an electric field across the layers and causes electricity to flow. Learn more about how PV works.
The second technology is concentrating solar power, or CSP. It is used primarily in very large power plants and is not appropriate for residential use. This technology uses mirrors to reflect and concentrate sunlight onto receivers that collect solar energy and convert it to heat, which can then be used to produce electricity. Learn more about how CSP works.
Absolutely! All solar panels meet international inspection and testing standards, and a qualified installer will install them to meet local building, fire, and electrical codes. Also, your solar energy system will undergo a thorough inspection from a certified electrician as part of the installation process.
A working PV panel has a strong encapsulant that prevents chemicals from leaching, similar to how defroster elements are sealed in a car windshield. Occasionally, a solar panel may break due to weather or other events. According to the International Energy Agency Photovoltaic Power Systems Technology Collaboration Program, any lead and cadmium exposure from broken solar panels in residential, commercial, and utility-scale systems would be below the acceptable limit set by the U.S. Environmental Protection Agency for soil, air, and groundwater.
Residential Consumer Guide to Solar Power – In an effort to make going solar as effortless and streamlined as possible, the Solar Energy Industries Association developed this guide to inform potential solar customers about the financing options available, contracting terms to be aware of, and other useful tips.
A Homeowner’s Guide to Solar Financing: Leases, Loans and PPAs – This guide from the Clean Energy States Alliance helps homeowners navigate the complex landscape of residential solar system financing. It describes three popular residential solar financing choices and explains the advantages and disadvantages of each, as well as how they compare to a direct cash purchase.
Solar PV Project Financing: Regulatory and Legislative Challenges for Third-Party PPA System Owners– Third-party owned solar arrays allow a developer to build and own a PV system on a customer’s property and sell the power back to the customer. While this can eliminate many of the up-front costs of going solar, third-party electricity sales face regulatory and legislative challenges in some states and jurisdictions. This report details the challenges and explains alternatives.
A Beautiful Day in the Neighborhood: Encouraging Solar Development through Community Association Policies and Processes – This guide, written for association boards of directors and architectural review committees, discusses the advantages of solar energy and examines the elements of state solar rights provisions designed to protect homeowner access to these benefits. It then presents a number of recommendations associations can use to help bring solar to their communities.
Selling into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes – This report from Lawrence Berkeley National Laboratory finds that home buyers are consistently willing to pay premiums of approximately $15,000 for homes that have solar across various states, housing and PV markets, and home types.
Residential Solar-Adopter Income and Demographic Trends – This report from Lawrence Berkeley National Laboratory finds that while solar adoption skews toward high-income households, low- and moderate-income households are also adopting, and that the rooftop solar market is becoming more equitable over time.
Learn more about the solar office's accomplishments.
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