Community-scale solar has attracted particular interest in the rapidly growing renewables market across the United States. Whether driven by interest from distribution utilities and community groups, or via policies like virtual net metering enacted in individual states, the sector holds untapped potential for offering competitive distributed electricity generation to a broader array of customers than are currently being served. Still, many lenders and tax equity investors have difficulty understanding both the opportunities and the challenges this market presents, and some developers active in this sector have been slow to adequately address some of the concerns of potential financial partners. This dynamic has proven to be a barrier to financing community-scale solar projects, which, in turn, has inhibited broader consumer access to renewable energy. In this report, Rocky Mountain Institute’s (RMI’s) Shine community-scale solar program and Sustainable Finance practice area describe how established solar-financing models can be easily adapted to the community-scale solar market, and discuss key risks and mitigants, as a framework for financiers and project developers to use in order to rapidly grow this market.

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