Translating Law and Policy Into Practice: Lessons From Community Solar

Community solar stands apart as a clean energy product. It opens renewable energy access to renters, schools, churches, and households that can’t install their own systems. What sets it apart, though, isn’t only who it serves, but the legal structuring that enables its development. Every community solar program is born from state-specific legislation, regulation and procedural rules and no two are identical.

That variability is more than a detail, it’s the defining risk and opportunity in this space. As Jason Kaplan, PowerMarket’s President and Chief Legal Officer, recently told Troutman Pepper Locke’s Energy Transactional Associates:

“Community solar is a state-enabled program and no rules are identical. While the structures are similar across markets, the nuances vary—and appreciating those differences is critical to mitigating the risks in the financing and development of a community solar project.”

Success in community solar depends less on understanding the broad strokes of the model, and more on recognizing the program-by-program nuances in application that shape compliance, financing, and operational viability. Attorneys and junior associates traditionally work in silos. They may only handle one element of a project’s lifecycle, whether that's permitting, tax equity financing, or compliance. However, attorneys that can connect the dots between law, finance, customer operations, and policy will serve their client well and enable stronger, more resilient projects.

How Small Differences Create Big Impacts
The distinctions of program implementation often play out at the utility level. Subtle shifts in enforcement, interpretation, or timing can dramatically affect project economics. For example, cash flow assumptions may look solid on paper, but factors like seasonal production swings, utility credit delays, or subscriber churn can quickly erode revenues if not anticipated in contracts.

Policies also evolve rapidly and aren’t always translated cleanly into contracts. Small oversights can cascade into financing gaps, compliance failures, or weakened project durability.

Jason illustrated this dynamic with New York’s move to utility consolidated billing:

“A few years ago New York implemented utility consolidated billing whereby the subscriber no longer pays for the community solar credit, rather they get the net savings directly applied to their bill and the utility wires the subscription fee to the developer—fundamentally eliminating subscriber credit risk.

However, legal and financial teams continued to require the acquisition of creditworthy subscribers despite the fact that the credit monetization risk was now with the utility, not the subscriber. In fact, some of these legacy requirements still exist today due to a failure to truly appreciate the underlying mechanisms of community solar.”

The result: unnecessary barriers, rigid agreements, and outdated risk allocation that collapse under real-world conditions—simply because the underlying program shift wasn’t fully absorbed.

A Broader Lens on Legal Work
Jason has seen this pattern repeat throughout his career. Trained in environmental law and policy and later building expertise in renewable energy law, financing, and business development, Jason noticed how legal work sometimes stalls when the bigger picture gets lost.

When attorneys approach community solar contracts strictly through a regulatory lens, opportunities for flexibility and collaboration are overlooked. Risk-aversion can outweigh innovation. And, in the process, the real purpose of community solar—broadening access to clean energy—can get sidelined.

That perspective shaped Jason’s recent presentation to Troutman Pepper Locke’s Energy Transactional Associates, where he walked through overlooked risks and untapped opportunities in community solar. His focus was practical: helping attorneys see how their decisions on paper ripple into operational realities.

Frameworks That Support Long-Term Viability
So where can legal teams add the most value? One way is by mapping contract clauses to real-world events in the project lifecycle. This shifts agreements from static templates into adaptive tools. Some examples:

Contract Structuring

• Consider how revenue is actually realized through community solar credit monetization based on subscriber bill spend, and not on generation.
• Ensure capital contribution triggers align with reasonable expectations for subscription milestones.
• Future proof subscriber agreements to allow for greatest long-term flexibility as the market adapts.

Risk Allocation

• Appreciate that the risk of loss varies by market related to the value of unallocated or excess credits.
• Include mechanisms to adjust if project development timelines shift.

Compliance

• Stay current with evolving state-level rules, such as low-income participation thresholds, subscriber mix ratios, or ITC low-income bonus requirements.
• Clarify who monitors, reports, and manages compliance obligations.

By taking this approach, contracts become living documents that anticipate variation and reduce friction as projects move from planning to operation.

Looking Ahead
The complexity of community solar is only growing. More states are launching programs, each with its own design. Many existing programs are expanding in scope, attracting larger and more diverse market participants.

For legal teams, one recommendation is to develop internal points of expertise—assigning certain associates to specific states or program types. Another is to strengthen partnerships with subject-matter experts, like Jason and the PowerMarket team, so that the transactions team has a resource to collaborate with and can bounce ideas off to ensure all angles are considered.

Success depends on staying engaged with the community itself. The most effective practitioners are those who remain close to how programs are actually implemented, not just how they’re written.

A Shared Learning Journey
“The Energy Transactions team at Troutman Pepper Locke left Jason’s session with a sharper sense of how to approach community solar contracts: by asking targeted questions, spotting risks early, and seeing agreements as tools to support—not constrain—project success.” - MK Houston, Counsel at Troutman Pepper Locke

Sessions like this highlight the need for ongoing dialogue across law, finance, and operations. Community solar is evolving quickly, and staying close to implementation details will be the difference between resilient projects and fragile ones.

We believe the best outcomes come from cross-disciplinary conversations. At PowerMarket, we aim to foster those connections—through advisory work, presentations, and workshops—so firms can stay ahead of evolving risks and opportunities in this space.