Many homeowners who want to invest in solar energy believe that putting solar on the roof is not a practical option because their roof may be improperly oriented, shaded by trees, or have limited space.
According to a 2008 National Renewable Energy Laboratory (NREL) analysis, about 22% of residential building roof areas located in cooler climates, and 27% of residential rooftop located in warm/arid climates are suitable for solar. The potential for commercial buildings is significantly better, which NREL estimates at 60% for warm climates and 65% for cooler climates. However, this estimate only takes into account the theoretical physical potential available. When other barriers are taken into account, such as whether a home is being rented or the age of the roof, only about 1 in 10 residential roofs are suitable for solar systems. .
To address this issue, some states have pioneered new community solar laws (also commonly called "shared solar", "solar gardens" or "virtual net metering") that allow homeowners to receive credits on their electric bill from solar projects installed somewhere else in their community or region. These new laws allow homeowners with unsuitable roofs, renters, and apartment dwellers to offset their electric bills with solar—even if the solar panels are located somewhere across town.
As a result, community solar represents a new and exciting way to increase equity and open up many new projects and financing models, extending solar to a more diverse range of households, including lower income houses.
While only ten states and the District of Columbia have passed legislation enabling community solar projects, several additional states are currently considering similar legislation. In some states without enabling legislation, utility companies have launched their own programs.