Understanding Community Solar for Commercial Entities: Accessing Off-site Renewable Energy

Community solar enables businesses without suitable on-site renewable generation space to access off-site renewable energy through subscription models. Rather than constructing solar systems on individual properties, community solar aggregates multiple customers around centralized solar facilities. Customers subscribe to share of facility output, receiving bill credits for pro-rata generation. This model enables renewable energy access for customers unable to install on-site systems due to space constraints, roof conditions, shading, or operational restrictions. For many Illinois commercial entities, community solar represents optimal path to renewable energy participation.

This comprehensive guide explores community solar for commercial participants, examines benefits and limitations, and provides frameworks for participation evaluation.

The Community Solar Opportunity for Illinois Businesses

How Community Solar Works:
Community solar facilities (typically 1-5 MW solar arrays) are constructed on favorable sites—agricultural land, municipal land, or properties with excellent solar resources. Multiple customers subscribe to portions of facility output, typically measured in kilowatts of subscription capacity. Generation is metered and customers receive bill credits through utility for pro-rata share of monthly generation. Subscription typically spans 20-25 years, providing long-term renewable energy access.

Commercial Subscriber Benefits:
No on-site installation required: Commercial entities without suitable roof space, with structural constraints, or with operational restrictions can access renewable energy without on-site infrastructure investment. Minimal capital requirement: Subscription models require no upfront system cost—customers typically receive first month free or discounted rates incentivizing signup. Bill reduction: Generation credits reduce electricity bills proportionally to subscription size. Sustainability achievement: Renewable energy subscription enables corporate renewable energy commitments and sustainability goal achievement without on-site installation complexity.

Illinois Community Solar Program Status:
Illinois community solar programs have expanded significantly since state policy enabling programs. Multiple Illinois community solar developers operate programs—Sunrun, Generac, Community Energy, and others administer subscriptions. Programs operate throughout Illinois with different structures and participation levels. Commercial participation eligibility varies by program—some programs enable large commercial customers; others focus on small business and nonprofit segments.

Benefits and Limitations: Is Community Solar Right for Your Commercial Facility?

Key Benefits:
No installation risk: Customers avoid installation risks, permitting complexity, and technical challenges. Developers handle all facility development, operation, and maintenance. Electricity cost reduction: Bill credits typically reduce electricity cost 5-15% depending on subscription size and local electricity rates. Sustainability achievement: Customers meet renewable energy commitments without capital investment. Flexibility: Customers can typically modify or cancel subscriptions providing flexibility if circumstances change. Tax and incentive benefits: Unlike on-site systems, customers generally don't capture federal tax credits or SREC revenue—benefits flow to facility developers. This can be disadvantage for large commercial customers but simplifies participation for others.

Key Limitations:
Missed tax benefits: Commercial customers don't capture 30% federal ITC available for on-site systems—this represents significant value loss for businesses that can utilize tax credits. No SREC revenue: Illinois Shines SREC revenue flows to facility developer, not subscribers. Modest cost reduction: Bill credits ($0.05-0.15/kWh) are lower than on-site generation value (energy savings plus demand charge reduction plus grid services) typically achieved by on-site systems. Less control: Customers have minimal control over system performance, operations, or equipment replacement. Subscription limitations: Long-term subscriptions (20-25 years typical) commit customers to extended periods; contract termination often faces penalties. Program viability risk: Developers struggling financially or facilities underperforming can affect subscriber experience—customers have limited recourse.

Community Solar Participation Pathways for Illinois Commercial Businesses

Pathway 1: Direct Subscription to Established Programs
Customers identify available community solar programs operating in their service territory, evaluate subscription options, and directly subscribe to desired subscription size. Most Illinois programs enable business subscriptions ranging from 5-500 kW capacity. Application typically requires minutes—providers need facility address, utility account information, and subscription preference. Customers activate subscription and begin receiving bill credits within weeks of signup.

Pathway 2: Multi-Site Subscription Aggregation
Businesses with multiple facilities can aggregate subscriptions across locations to achieve larger combined renewable percentage. A commercial company with 10 locations each taking 50 kW subscription achieves 500 kW total renewable generation across distributed facility portfolio. Aggregation simplifies administration while distributing benefits across multiple locations.

Pathway 3: Group Purchasing and Negotiated Subscriptions
Businesses group together to negotiate larger subscriptions with developers, potentially accessing better pricing or terms through aggregated purchasing power. Trade associations and sustainability-focused business networks sometimes facilitate group purchasing. Group approaches enable smaller businesses to achieve larger renewable penetration through aggregated demand.

Financial Evaluation Framework

Subscription Cost vs. Benefit Analysis:
Community solar bills typically show subscription cost (few dollars monthly) offset by generation credits. Net monthly impact depends on subscription size and local rates. Example: 50 kW subscription in Illinois generates approximately 65 MWh annually. At $0.10 per kWh credit, annual benefit equals $6,500. Subscription cost for 50 kW typically ranges $50-200 monthly. If cost is $100/month ($1,200 annually), net annual benefit is $5,300 ($6,500 credit - $1,200 cost).

On-Site vs. Community Solar Comparison:
For commercial customers with viable on-site sites, on-site generation typically provides superior economics through captured tax credits, demand charge reduction, and SREC revenue. On-site systems often deliver 12-18% cost reduction versus 5-10% reduction from community solar. However, for customers unable to develop on-site systems, community solar provides accessible renewable access unavailable otherwise. Decision framework: If on-site is viable, compare on-site economics to community solar economics and select optimal approach. If on-site is not viable, community solar provides valuable renewable access alternative.

Sustainability and ESG Considerations:
Community solar enables renewable energy claims supporting corporate sustainability commitments. However, ESG disclosures should distinguish between on-site and off-site renewable generation, as investors and stakeholders evaluate corporate commitments differently. On-site generation typically demonstrates stronger commitment than purchased renewable energy. For companies with ESG transparency requirements, differentiation between renewable types should be explicit.

Participation Evaluation and Decision Framework

Step 1: Assess On-Site Viability
Evaluate whether on-site solar is economically viable. If on-site is viable, model comparative economics versus community solar. If on-site is not viable (space constraints, roof conditions, shade, operational restrictions), community solar becomes attractive default option.

Step 2: Identify Available Programs
Research community solar programs operating in facility service territory. Utilities and state energy offices maintain listings of active programs. Contact programs directly to understand eligibility, subscription options, pricing, and available benefits.

Step 3: Model Financial Returns
Request rate quotes from available programs. Model annual bill impacts incorporating subscription cost and generation credits. Calculate break-even timeframe and cumulative benefits over 20-year subscription period.

Step 4: Evaluate ESG and Sustainability Alignment
Assess whether community solar subscription aligns with corporate sustainability commitments and ESG disclosure requirements. Determine whether externally visible commitment to renewable energy meets corporate objectives.

Step 5: Contract Evaluation and Subscription Execution
Review subscription agreement terms—pricing, subscription duration, modification procedures, and termination provisions. Understand complete rights and obligations. Execute subscription when terms are satisfactory.

Step 6: Activation and Benefit Realization
Activate subscription and monitor bill impacts confirming expected credits. Track sustainability benefits toward corporate renewable energy goals.

For comprehensive renewable energy strategy guidance, review our detailed article on corporate power purchase agreements and renewable energy procurement.