A community solar project, farm or garden is a solar power installation that accepts capital from and provides output credit and tax benefits to multiple customers, including individuals, businesses, nonprofits, and other investors. Participants typically invest in or subscribe to a certain kW capacity or kWh generation of remote electrical production. The project's power output is credited to investors or subscribers in proportion to their investment, with adjustments to reflect ongoing changes in capacity, technology, costs and electricity rates. Community solar benefits renters, homeowners, and business owners who don't own their own homes, don't have a suitable roof orientation for solar, or who can't afford the upfront costs of solar. Community solar provides direct access to the renewable energy to customers who cannot install it themselves. Participation in community solar programs can lead to significant savings on electricity bills for low- to moderate-income (LMI) households. For instance, some programs have reported families' annual savings of around $400 on their electricity bills. Companies, cooperatives, governments or non-profits operate the systems.

Installing solar panels on a building or household can come with a variety of issues. For homeowners, these limitations include roof shape/size constraints, shading, grid capacity, and zoning regulations. Non-homeowners cannot make building modifications like solar installations. Additionally, low-income households in the U.S. face an energy burden (a term used by the U.S. Department of Energy to define how much of a household's gross income is spent on paying for energy) that is roughly triple the amount of other U.S. households. With around 50 million low-income U.S. households (about 44% of the U.S. household total), many U.S. residents are spending large amounts of their income on energy. Many of these residents, whether they are renters or their properties don't support installation, don't have access to solar.

Community solar programs are particularly beneficial for low-income households, renters, and residents of multifamily buildings who face barriers to installing rooftop solar panels. These programs allow such individuals to access renewable energy and reduce their electricity bills without the need for personal solar installations.

Community solar functions similarly to conventional grid-supply energy insofar as it provides energy remotely, requiring no installation or maintenance on the part of the consumer. Because of community solar projects' remote nature, the physical limitations of solar installation for consumers disappear. Also, due to its subscription/opt-in functionality, community solar can increase access to solar energy for low-income households. These projects benefit initial investors too. As consumer rates for solar energy become lower through distributed generation of community solar, initial investors in community solar projects experience higher returns in the long run.

Centralizing the location of solar systems can thereby create advantages over residential installations:

There are also a number of social/community benefits of community solar:

An estimated 80% of U.S. residents can neither own nor lease systems because their roofs are physically unsuitable for solar or because they live in rented or multi-family housing and do not have control over their roof. As of February 2025, 24 states and Washington D.C. have active policies that support community solar. Of these states, 20 include provisions supporting low-and-moderate-income (LMI) households.

According to a market analysis conducted by the National Renewable Energy Laboratory, as of December 2024 there were 44 U.S. states with at least one community solar project, including the District of Columbia. The combined capacity of community solar projects across the US was more than 7,800 megawatts. This capacity was concentrated in Florida, New York, Massachusetts, and Minnesota.