By: David Sarkisian, Principal Policy Analyst
Community solar is a program model wherein individuals, businesses, and other organizations can subscribe to shares in a solar facility in exchange for monthly payments. The subscribers receive credits based on the benefits that their assigned solar capacity produces for the grid, although methods of compensation and credit values can vary. Community solar offers a way for people who do not have the ability to install rooftop solar, like renters, to participate in the solar economy.
Community solar can be offered either by utilities or through third party providers. Third party community solar requires state enabling legislation to avoid triggering prohibitions on operating as a public utility. As of May 2025, 23 states have legislation or regulations enabling community solar programs, and two additional states allow utilities the option to initiate community solar programs. In some states, utilities offer community solar programs without specific enabling legislation. This blog post reviews 2025 legislative action that could create new community solar programs or end existing community solar programs.
Community Solar Policies (May 2025)
New Community Solar Programs
In 2025 legislative sessions, several states have considered creating new community solar programs. The most notable action so far has been the passage of S.B. 188 by the Montana legislature. S.B. 188, titled the Montana Solar Shares Act, creates a new community solar program, which would make Montana the 24th state with such legislation. The bill allows community solar facilities to be owned by utilities, public-private partnerships, for-profit businesses, and nonprofit organizations. The bill would authorize systems of sizes between 50 kW and 5 MW. Although it specifies some elements, the bill leaves much of the design of the program up to the discretion of the Public Service Commission. The Commission must make rules determining subjects including credit rates, consumer protections, and transferability and portability of subscriptions.
Pennsylvania’s House of Representatives passed H.B. 504 earlier this month, which would create a community energy program that allows third party organizations to construct community solar or renewable natural gas generation facilities. This bill differs from many community solar programs in that it allows for the inclusion of resources other than solar. On the subject of capacity, facility sizes could be as large as 5 MW, or 20 MW if located on brownfields. For credit rates, the bill gives the Public Utility Commission the responsibility to develop a credit rate that is not less than the “default service rate,” as determined by the Commission. Utilities must purchase unsubscribed energy at wholesale rates and sell it on the PJM market. Another bill introduced in Pennsylvania, H.B. 1155, would create a somewhat different community solar program, with a requirement that subscription costs not exceed bill credits.
The Ohio Legislature took a serious look at creating a community solar program through H.B. 15. More specifically, H.B. 15 would have allowed for the creation of “community energy facilities,” which could use generation sources (including fossil fuels) other than solar. The program would have had a total capacity of 1.5 GW, with 250 MW to be added annually. Individual system sizes could be up to 10 MW, or 20 MW if located on brownfields or distressed sites. For crediting, the bill specified that credit rates would be set at retail rate minus distribution charges. On ownership, the bill barred utilities from directly owning community energy facilities, although utility affiliates could own them. Ohio lawmakers ultimately abandoned the community energy facility program as part of H.B. 15, as the Senate version of the bill amended the program out of the bill’s language, and the House concurred with the amendments. However, legislators introduced a new community energy facility bill, H.B. 303, in late May 2025.
Georgia’s legislature introduced two bills, H.B. 507 and S.B. 203, that would create a third party community solar program. System sizes in this program could be up to 5 MW or larger if sited on a combination of rooftops, brownfields, landfills, or over parking lots and roadways. Notably, this program would provide credits at the total aggregate retail rate, with excess credits rolling over indefinitely and paying out even if a subscriber leaves the program. However, subscriptions would need to be sized to not exceed 90% of a subscriber’s expected usage. These bills did not advance during the 2025 legislative session but will carry over to the 2026 session.
Missouri lawmakers introduced three bills, H.B. 662, S.B. 386, and H.B. 1322, which would create three-year pilot community solar programs. The bills give responsibility for setting credit rates to the Public Service Commission, with guidance to set the credit rate at a level that allows for actual development of community solar facilities, and instruct the Commission to implement a higher credit rate for lower-income subscribers. These bills did not advance before the end of the legislative session on May 16, 2025.
Iowa lawmakers introduced two bills, H.F. 404 and S.F. 267, which both would have created community solar programs. The bills differed somewhat in how they set credit rates for participants; H.F. 404 left it up to the Utilities Commission, while S.F. 267 used retail rate net metering. Neither of these bills advanced before the crossover deadline, however. Indiana legislators also introduced two bills, H.B. 1581 and S.B. 541, that would have established community solar programs. These bills left most of the design of the community solar programs up to the Indiana Utility Regulatory Commission, although they did specify a maximum facility size of 5 MW and that excess bill credits would roll over annually. The Commission was instructed to set credit rates that allow for tangible economic benefits for all customer classes. Ultimately, these bills did not advance before the crossover deadline.
West Virginia’s legislature also considered community solar bills this session. These bills, H.B. 2419 and S.B. 34, would have allowed for facilities of up to 5 MW, or 10 MW if the facility was on a brownfield site, closed landfill site, uses agrivoltaics, or provides 51% or more of its electricity to low-income subscribers. The bills specified relatively ambitious aggregate capacity limits of 6% of retail electric sales by 2028, 8% by 2030, and 10% by 2031. The bills required that at least 75% of capacity be developed by third parties, and that credit rates allow for development of facilities by third parties. These bills did not advance before the crossover deadline.
States Considering Adopting New or Ending Existing Community Solar Programs During 2025 Legislative Sessions
Possible Ending of Existing Community Solar Programs
Not all legislative action on community solar programs is aimed at creating new programs. In fact, one state is contemplating ending its long-running community solar program. Minnesota’s legislature is considering several bills that would sunset its existing (and recently amended) community solar garden program in 2028. Two of these bills, H.F. 2793 and S.F. 2855, are freestanding, but one bill, S.F. 2393, is an omnibus energy bill, which might suggest higher likelihood of passage. All of these bills are currently at the introduced stage.
Conclusion
Community solar is an appealing policy idea that has attracted attention and legislative action in states that have not historically had many renewable energy programs, such as Alaska and Louisiana. Barring a veto, Montana will become the 24th state to adopt legislation or regulatory decisions enabling community solar, and it is possible that Pennsylvania will adopt legislation this year as well. Several other states developed legislation but ultimately did not adopt it; it will be interesting to see whether these states advance legislation in future years. In contrast, Minnesota, a state with one of the longest-running and most successful community solar programs, is considering a sunset date for its program.
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