Colorado is one of the first states to enact legislation (in 2010) enabling community solar gardens and is a leader in community solar gardens in the nations. Xcel Energy, the state’s largest utility offered it’s first incentive program for community solar gardens in 2012. Within 30 minutes of opening the program to applications it received applications for more than triple the amount of megawatts the request for proposals called for in terms of small and medium systems.

Unlike traditional residential solar systems, community solar gardens are located near a center of energy use, like a town. They’re also larger than a residential system from 10s of kilowatts to a few megawatts in size, depending on local regulations and rules. Local utility customers can essentially subscribe to or buy a part of the solar array. The electricity produced by the subscriber or buyer’s part of the system is then used to offset their monthly electric bill, or, in some cases wipe it out. 

The payment rates are for the renewable energy credits (RECs) generated by the system. The customers receive bill credits but not REC payments. The REC payments help offset the cost of the installation itself.

Under other specifics of the program, community solar gardens must have at least 10 customer subscribers—prior to applying—to qualify for the program. At least 5 percent of the allocation must be attributed to income-qualified subscribers. In addition, no one subscriber have more than 40 percent interest in a project. Customers can purchase no more than the equivalent of 120 percent of their annual electric usage. In counties with less than 20,000 people customers  can participate in gardens in adjacent counties with fewer than 20,000 people.