Community Solar Expansion 2025: State Programs and Market Growth
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Community solar — which allows multiple residential and non-residential customers to subscribe to power produced by a local solar project and receive credits on their utility bills — reached a major milestone in 2025 by surpassing 10 GWdc of cumulative installed capacity. Despite a year-over-year contraction, the segment remains a critical pathway for expanding solar access to households and businesses that cannot install rooftop systems. Here is a detailed look at the market in 2025.
According to the SEIA and Wood Mackenzie Solar Market Insight 2025 Year in Review, the community solar segment installed 1,435 MWdc in 2025 — a 25% decrease from the record levels of 2024. Q4 2025 alone accounted for 546 MWdc of installations. The segment officially broke the 10 GWdc cumulative milestone in Q4 2025, reaching 10.1 GWdc total.
| Metric | 2025 Figure |
|---|---|
| Annual installed capacity | 1,435 MWdc |
| Q4 2025 installed | 546 MWdc |
| Cumulative capacity | 10.1 GWdc |
| Development pipeline | 9+ GWdc |
| Year-over-year change | -25% |
The decline was driven primarily by contractions in Maine and New York, two of the largest legacy markets. Maine experienced a staggering 87% contraction, while New York saw a 20% year-over-year decline despite remaining the leading market. However, the development pipeline remains robust at over 9 GWdc, and the 2026 forecast projects a 12% increase in national installed capacity. Longer-term, cumulative capacity is on track to break 15 GWdc by 2029.
New York: Still the Leader
New York added 624 MWdc of new community solar capacity in 2025, representing the largest share of national volumes. Together with Illinois, the two states accounted for 68% of all U.S. community solar installations. In Q1 2025, New York held 52% of the total community solar market. However, slowing growth in the state contributed to the national decline.
Illinois: Steady Growth
Illinois added 349 MWdc of new capacity in 2025. New York and Illinois together have nearly 5 GWdc of community solar pipeline as of Q1 2025, indicating continued build-out potential despite near-term headwinds.
Emerging Markets
| State | 2025 Installations | Year-over-Year Change | Notes |
|---|---|---|---|
| New Jersey | 46 MWdc | +31% | Community Solar Energy Program (CSEP) ramping up |
| Maryland | 76 MWdc | +13% | Record annual installations |
| Maine | Significant decline | -87% | Drove national contraction |
| Virginia | Emerging | — | Continued pipeline build-out |
| Delaware | Emerging | — | Continued pipeline build-out |
| New Mexico | Emerging | — | 200 MWac program awarded |
New Jersey and Maryland represent the next generation of community solar growth, with both states seeing year-over-year increases even as the national market contracted. Maryland's record year of 76 MWdc represented a 13% increase, while New Jersey's CSEP program grew 31% to 46 MWdc.
Low-to-moderate income (LMI) access is a defining feature of modern community solar policy. According to NREL's review of community solar policy landscapes, 24 states and localities including D.C. have enacted community solar legislation, and nearly all include considerations for LMI households — with the exceptions of Alaska, North Carolina, South Carolina, and Vermont.
State LMI Carve-Outs
| State | LMI Requirement |
|---|---|
| New Mexico | At least 50% of capacity dedicated to LMI customers (200 MWac program) |
| Colorado | Senate Bill 24 requires 51% of each project reserved for income-qualified subscribers |
| Maryland | Carve-outs for LMI subscribers in pilot program |
| Minnesota | Updated community solar garden legislation with LMI provisions |
The DOE's National Community Solar Partnership (NCSP) has set a target that community solar projects and programs should reserve at least 40% of capacity for and be accessible to LMI households. This target has influenced state program design nationwide.
The Clean Energy Connector
DOE launched the Clean Energy Connector platform to streamline LMI subscriber acquisition. The initial pilot phase launched in Washington, D.C., Illinois, and New Mexico in March 2024, then expanded in December 2024 to include Massachusetts, Maryland, and Rhode Island. The platform connects income-qualified households — verified through LIHEAP enrollment — with cost-saving community solar subscriptions. DOE intends to expand the Connector to additional states with active community solar programs that include LMI access measures, minimum savings requirements, and consumer protections.
Community solar operates on the principle of virtual (or community) net metering, where subscribers receive credits on their utility bills for their share of a solar project's output. The subscriber acquisition landscape has evolved significantly:
- Direct subscription: Project developers or operators sign up subscribers directly, typically offering a discount (10–20%) on the bill credit value.
- Third-party subscriber managers: Specialized companies handle customer acquisition, enrollment, and ongoing account management for a fee.
- LIHEAP integration: Through the Clean Energy Connector, LIHEAP agencies identify eligible households and facilitate enrollment, reducing customer acquisition costs for LMI-focused projects.
- Anchor tenants: Many projects secure commercial or institutional anchor subscribers to cover a portion of capacity, with residential subscribers filling the remainder.
Virtual net metering policies vary by state, with differences in credit rates, subscriber location requirements, capacity allocation rules, and allowable subscriber-to-project capacity ratios. These policy details fundamentally shape project economics and subscriber savings.
A defining feature of 2025 community solar development was the rush to safe-harbor equipment before the December 31, 2025 deadline. Top community solar developers worked to secure the Investment Tax Credit (ITC) before needing to comply with complex Foreign Entity of Concern (FEOC) requirements. Safe-harbored projects may come online through the end of 2029, supporting near-term growth even as new project origination becomes more challenging.
However, the report noted that growth prospects for community solar beyond the ITC's expiration remain uncertain. New project origination opportunities continue to decline, and the five-year outlook projects the national market to contract by an average of 5% annually through 2030 — though this figure includes only state markets with active, legislation-enabled programs and excludes potential upside from new legislation.
Financing Trends
- Tax equity remains critical: Community solar projects rely heavily on ITC monetization through tax equity partnerships. Proposed restrictions on tax credit transferability after 2028 add uncertainty.
- State program stability: Projects in states with permanent (rather than pilot) programs benefit from lower financing costs and more predictable subscriber acquisition.
- LMI-focused capital: Impact investors and community development financial institutions (CDFIs) are increasingly funding projects with high LMI allocations, attracted by the dual return of financial yield and social impact.
Despite the 2025 contraction, several factors support community solar growth in the coming years:
- 2026 rebound: National installed capacity is expected to increase 12% in 2026 compared to 2025.
- Safe-harbored pipeline: Projects with secured ITC benefits can come online through 2029.
- New state programs: Proposed community solar legislation markets have pre-development pipelines exceeding 1.5 GWdc.
- Milestone trajectory: Cumulative capacity is on track to break 15 GWdc by 2029.
- Federal LMI support: The Clean Energy Connector platform is expanding to additional states.
The report noted there is potential upside to the forecast if new community solar legislation passes. With 20 states without enabling community solar policies having already installed at least one project, the addressable market for new program creation is substantial.
- Focus on New York and Illinois: These states remain the volume leaders, with a combined 5 GWdc pipeline.
- Watch emerging markets: New Jersey, Maryland, Virginia, Delaware, and New Mexico offer growth opportunities as their programs mature.
- Design for LMI compliance: As more states adopt LMI carve-outs, project designs should accommodate subscriber management for income-qualified households.
- Leverage the Clean Energy Connector: In participating states, the platform can reduce customer acquisition costs for LMI subscriptions.
- Plan for post-ITC economics: With safe-harboring deadlines passed, evaluate project viability without full ITC benefits.
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Which states have community solar programs?
As of 2026, 22 states plus Washington D.C. have active community solar programs. The largest markets are New York, Massachusetts, Minnesota, Colorado, and Maine. Each state has different rules for subscriber allocation, credit rates, and project size caps.
How much can I save with community solar?
Community solar subscribers typically save 5-15% on their electricity bills. In New York, the savings are about 10% off the supply portion of the bill; in Massachusetts, the savings can reach 15-25% through the SMART program adders.
Can I cancel my community solar subscription?
Yes. Most community solar programs allow cancellation with 60-90 days notice. Some programs charge an early termination fee if you cancel within the first 1-2 years. Check your subscription agreement for specific terms.
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- Engineering Deep Dive: Sizing Solar Arrays for Maximum ROI in Commercial Projects
- Complete Solar System Sizing Guide: From Residential to Commercial (2026 Edition)
- Heat Pump and Electrification Boom 2025: Impact on Electrical Supply Demand
- SEIA & Wood Mackenzie — Solar Market Insight 2025 Year in Review
- SEIA & Wood Mackenzie — Solar Market Insight Report Q2 2025
- NREL — Community Solar Policy Landscape and Pathways to Meaningful Benefits
- NREL — Equitable Access to Community Solar: Program Design and Policy
- DOE — Clean Energy Connector
- DOE — National Community Solar Partnership Annual Summit 2023
