Community solar vs. CCAs vs. green power plans: Comparing alternative electricity options

Only those willing and able to invest in a solar installation in the early days of solar energy could participate. You now have multiple ways to go solar without installing anything at home and often without paying anything upfront. Programs like community solar, community choice aggregations (CCAs), and retail green power plans allow you to support renewable energy without putting solar panels on your property. How do these programs work? What makes them different? We discuss the key differences between community solar, CCAs, and green power plans.

Green power is an overarching term that describes renewable energy technologies (specifically, "electricity produced from solar, wind, geothermal, eligible biomass, and low-impact small hydroelectric resources," according to the Environmental Protection Agency). Local governments, companies, nonprofit organizations, and individual electricity customers often purchase green power to promote sustainability and reduce carbon emissions. 

Here's the catch: Buying green power doesn't mean your home will run directly on renewable energy. Because of the nature of our electric grid, it isn't possible to control precisely where an electron from a renewable power plant goes once it's on the grid. Even so, as an electricity customer, you can still claim the benefits of using "green energy" thanks to an incentive called renewable energy certificates (RECs).

Renewable energy certificates (RECs)

RECs are a type of commodity that markets, and governments use to track and transfer the "green" aspects of renewable energy. When you buy green power, you essentially buy RECs generated by various renewable power plants. Even though you're not necessarily using electricity from these power plants directly, you have purchased the right to claim the environmental benefit of that electricity as your own.

Power plants produce one REC for every megawatt-hour (MWh), or 1,000 kilowatt-hours (kWh), of electricity they generate, and they can only sell a certificate once. After you buy that "greenness," it's yours, and no one else's to claim.

If you want to contribute to a more renewable grid without installing anything on your property, here are some common alternatives to utility electricity: 

Community solar

Also known as "shared solar" or "roofless solar," community solar allows you to subscribe to a local solar farm. Typically, you purchase a portion of the solar array and receive credits on your electric bill for the solar power your share generated that month, reducing what you owe your electric utility company. Many community solar providers offer these credits at a discount. Community solar markets vary widely by state, but more and more projects are becoming available nationwide. Our Community Solar Marketplace is a great place to explore open projects in your area!

Community choice aggregation (CCA)

CCAs allow local governments to purchase energy for electricity customers in their area. Cities participating in a CCA arrangement can buy electricity from specific sources and companies instead of the local utility's generation sources. Given the community's aggregate demand and buying power, these plans often offer competitive electricity rates. Local governments can use CCA plans to reach clean energy targets (assuming they decide to procure electricity from renewable projects).

Like community solar, CCA electricity plans are not available to everyone (yet). Currently, ten states have approved CCA legislation. Once your state authorizes CCA programs, it's up to your city to create a CCA option for your community.

Retail green power plans 

Some retail energy providers (REPs) or energy service companies (ESCOs) may offer "green" or "eco-friendly" energy plans for customers interested in switching to renewable energy. (AKA buying RECs). Companies like this typically offer various plan types that allow you to opt into a higher or lower percentage of renewable electricity (e.g., 25% renewable, 75% from other sources) and pay accordingly. Companies outside your utility commonly offer green power plans, but some utility companies also provide their own.

Electricity from your utility company

Of course, you can continue relying on your utility company for all your electricity needs. Utilities have different electricity mixes by area and distribute varying amounts of renewable and fossil fuel-generated electricity depending on the power plants they use for supply. It's safe to say that everyone buying electricity supply from their utility company is buying some electricity generated from coal or natural gas: In 2022, 60% of U.S. utility-scale electricity generation still came from fossil fuels!

Let's say you live in an area with a few or all of these electricity options – how do you decide which is right for you? It largely depends on your preferences and your environmental goals.

Pros and cons of electricity alternatives, summarized

Savings

Best for your wallet: community solar

Electricity bill savings is the primary motivator for many people interested in changing their electricity provider. Community solar is likely your best bet if you want to maximize savings. Community solar companies sell electricity bill credits from the solar projects at a discounted rate, saving most subscribers 5-20% on their annual electricity bills.

Electricity customers can also save with a CCA plan, though savings are less specific and more challenging to predict than community solar. Because of the collective buying power of a community, governments can secure electricity prices up to 20% lower than retail rates, but this is heavily reliant on who your community chooses to procure power from, the source of that electricity, the size of your community, and electricity rate trends.

Green power plans are historically less financially advantageous. A 2016 study from the National Renewable Energy Laboratory (NREL) found that residential customers participating in a green power plan paid premiums of about $195 per year.  

Support local renewable energy projects

Best for supporting local renewable energy: community solar

If you want your electricity purchase to support local renewable projects, try to subscribe to a local community solar project first. Your subscription can provide the buy-in developers need to create additional projects throughout your region that will help further decarbonize your electricity grid. Plus, you'll know exactly where your solar farm is, and you may even have friends or neighbors who work for companies that build or maintain the project!

CCAs often have a local renewable energy aspect, but that's not always true. It depends entirely on how your government procures electricity. They may purchase renewable electricity from a local offshore wind project that creates clean energy jobs in your state or buy the electricity from wind turbines on the opposite coast.

Lastly, green power plans, REPs, and ESCOs source RECs from various energy projects that could be hundreds or thousands of miles away from your home. While opting for a green power plan has environmental benefits, it doesn't necessarily contribute to local clean energy efforts. Additionally, most companies build green power plans off of RECs from existing projects, meaning your support doesn't result in additive clean energy or the development of new renewable energy projects. 

Consolidated billing

Easiest billing process: CCAs and utility electricity

Before signing up for any electricity alternative, you'll want to understand how it will impact your billing process. Will you still receive a monthly bill from your utility company? Will you receive two bills?

Whether you sign up for community solar, CCA, or a green energy plan, you'll still receive a bill from your utility company. They own and maintain responsibility for the infrastructure that distributes and delivers electricity to your home, and you'll likely still pull electricity from the utility's grid at times. 

After subscribing to a community solar project, you typically receive a bill from your community solar company charging you for your share of the energy from the solar project and your usual bill from your utility company. Your utility bill will be lower and potentially even have negative charges because it will include credits for the energy you bought through your community solar subscription. 

Likewise, green power plans can sometimes involve two separate bills: one from your REP or ESCO charging you for the "supply" portion of your bill (i.e., the green energy) and another from your utility company with the delivery and distribution charges. Sometimes, utility companies and REPs will work together to consolidate these charges into a single bill.

The billing mechanisms with CCAs work very similarly to green power plans in the sense that CCAs cover the supply portion of your energy bill, but you'll still pay your utility company distribution and delivery costs. Governments and utility companies usually roll up these charges and include both in your utility electric bill.

Availability

Most widely available: utility electricity, then green power plans

Of all these options, the only one available nationally is (unsurprisingly) traditional utility electricity. 

Green power plans from REPs or ESCOs get the silver medal for availability, though they're only an option if you live in a state with a deregulated or partially-regulated electricity market. As of 2023, this comes out to roughly 20 states.

Community solar and CCAs are even harder to come by now, but both will likely experience market growth in the coming years.

Environmental claim, or "green" benefit

Best for environmental claims: green power plans

As previously mentioned, RECs determine whether or not you're buying any "green benefit" with these energy options. You purchase RECs with green power plans, meaning you can claim to run your home on renewable electricity even though electricity from the renewable power plants isn't flowing directly into your outlets. 

The same goes for CCAs, but only if your CCA offers a renewable energy option. Remember, this isn't a guarantee! While many communities use CCAs to procure green electricity for their residents, some rely on electricity from non-renewable resources. Additionally, many CCAs offer different environmental attributes and ask customers to opt into (and pay more for) 100% renewable energy plans.

It gets more complicated with community solar. It's natural to assume that when you purchase energy from a community solar farm, you can claim that green electricity. In most cases, this isn't true. While your subscription generally supports local renewable energy development, the project owner typically retains the rights to keep or sell the RECs. Unless your community solar contract states explicitly that you have ownership rights of RECs from the project, it's safe to say you can't claim to be using clean energy through your subscription. 

At EnergySage, we're on board with any power option supporting the environment and further decarbonizing our electricity, but we're especially excited about community solar. Here's why:

Community solar is accessible

Geographic limitations, lack of suitable financing options, upfront costs, price premiums, and property ownership requirements are a few barriers that hinder the accessibility of traditional rooftop solar. Community solar removes a lot of these barriers, offering a low-commitment way to support the environment:

• Renters and homeowners alike can become community solar subscribers.

• You can join a local community solar program without paying anything upfront.

• You don't need to install any equipment, deal with any maintenance, or go through any change in electrical service to participate.

Community solar is an easy way to save on electric bills

Many green power plans charge a premium from a retail energy provider (REP), your utility company, or a community choice aggregation. On the other hand, you typically pay less for electricity through community solar. Most community solar companies also allow you to cancel penalty-free.

Community solar is local

Given your local utility's role in community solar programs, you can typically only subscribe to projects in your electricity service territory. While this sometimes means limited options, it also means that any solar farm you buy energy from creates local jobs and a cleaner natural environment!

Community solar encourages additive renewable energy

When you buy green power, you're most often buying RECs from projects already built. While you can claim to run your home on clean energy, your purchase does not directly increase the amount of renewable energy generation in our country or encourage the development of new renewable energy facilities. 

When you sign up for a community solar project, there's a good chance it still needs to be built. Your subscription provides community solar companies' buy-in to fund these projects. In other words, your investment encourages additive renewable energy generation, helping to create a cleaner, more stable electric grid.

Yes! Regardless of whether or not you live in a deregulated electricity market, you can voluntarily buy unbundled RECs separate from an electricity purchase. Read more about what to consider before buying RECs in our article about the benefits of renewable energy credits.

Frequently asked questions

Is community solar a good deal?

Since community solar is usually free to sign up for, it's generally a good deal if available in your area. Community solar discount rates vary based on where you live and your community solar provider. Still, on average, you can get a discount between 5-20% with community solar as a bill credit.

Is CCA electricity more expensive than other options?

It depends on your CCA and location. Sometimes there are partially renewable options or 100% renewable. Regardless of the exact cost, it can sometimes still be cheaper than your utility company's traditional electricity. You'll have to research options in your area.

Which is better: CCAs or rooftop solar?

While solar panels cost more, they can help you save much more on your electricity bill and help you reduce your carbon footprint substantially. If you don't own your home or live in a multi-family building, you may be unable to install solar panels. Options like community solar or CCAs may be the way to go. Both CCAs and rooftop solar systems have environmental benefits. Learn more about each option.

How can I maximize electricity savings if no community solar projects exist near me?

Comparing electricity plans is one of the easiest ways to lower your electric bill. WattBuy, an energy marketplace and one of EnergySage's partners, allows you to do just that! If you live in one of the states listed below, you could save up to 40% on your electric bills by switching to WattBuy:

• Connecticut

• Delaware

• Illinois

• Maine

• Maryland

• Massachusetts

• Michigan

• New Hampshire

• New Jersey

• New York

• Ohio

• Pennsylvania

• Rhode Island

• Texas

• Virginia

• Washington D.C

Community solar is expanding rapidly, and each project is unique. Understanding your options in such a fast-paced and ever-evolving industry can be challenging, but EnergySage takes the guesswork out of community solar. The EnergySage Community Solar Marketplace is a free online service designed to empower you to go solar with confidence. Explore and compare community solar farms in your area and connect with an expert Energy Advisor today!