This story was originally published by Yale e360 and is reproduced here as part of theClimate Desk collaboration.
Isbel “Izzy” Palans lives in a small cabin nestled among mountain peaks and towering trees in the Colorado Rockies. Her home is often shaded and, during the long winters, buried under heaps of snow. Her monthly utility bills show credits for solar electricity production, but no solar panels are affixed to her roof. Instead, the power comes from a solar array some 60 miles away in a nearby valley.
Last year, the panels nearly slashed her energy bill in half. “I’ve been thrilled,” said Palans, a 76-year-old retired waitress who relies partly on Social Security benefits to make ends meet.
Palans is a subscriber to a 145-kilowatt solar array project run by Holy Cross Energy, a rural utility cooperative. Built with state funding, the program provides solar credits to more than 40 low-income households in western Colorado that otherwise wouldn’t have the financial or technical means to access renewable energy. The venture is just one of a growing number of so-called “community solar” projects across the United States focused on delivering renewable energy — and the cost-savings it can provide — to low-income households, from California to Minnesota to Massachusetts.
Community or shared solar is broadly defined as a project where multiple participants own or lease shares in a mid-sized solar facility, usually between 500 kilowatts and 5 megawatts, and receive credits that lower their monthly utility bills based on how much power the facility delivers to the grid. The sector has emerged as a “bright spot” in an otherwise sluggish U.S. solar market, outpacing growth in new residential and utility installations that has been stymied by fading federal and state incentives and the Trump administration’s import tariffs on solar equipment. U.S. community solar capacity has more than quadrupled since 2016, increasing from more than 300 megawatts to nearly 1,400 megawatts today. That is enough electricity to power roughly 266,000 households. Analysts say they expect another 600 to 700 megawatts to go online this year.
The vast majority of community solar subscribers to date, however, have been businesses, universities, government agencies, and higher-earning households — all of which can generally pay the steep project enrollment fees or meet financial requirements. Meanwhile, those who could benefit the most from access to renewable energy and lower utility bills — low-income residents — have largely been left out of the rise in community solar, analysts say.
Less than half of U.S. community solar projects have any participation from low-income households. Of projects that do include lower-earning families, only about 5 percent involve a sizable share, or more than 10 percent, according to a November 2018 survey.
Recently, states and industry experts have been working to change these dynamics. A dozen states and the District of Columbia have developed, or are developing, a variety of mandates, financial incentives, and pilot programs to make it easier for low-income participants to access shared solar. About 50 million households, or 44 percent of the U.S. total, fall into this income category. Nonprofit developers are also trying new approaches, such as eliminating income and credit score checks for low-income customers, and offering short-term contracts for renters.
“Community solar really should serve the community, and have a diverse subscriber pool with each project,” said Marta Tomic of Vote Solar, a nonprofit in Oakland, California. “If we have this goal of empowering customers, of being able to provide them savings on their electricity bill, we need to close that gap [in participation].”
New Jersey is moving ahead with a pilot program to build around 75 megawatts of community solar projects a year — 40 percent of which will be dedicated to serving low- or moderate-income customers. Illinois’ new $30 million Solar for All program waives low-income participants’ upfront costs to join community solar projects and limits monthly fees. Colorado’s 2010 shared solar law, one of the first in the country, requires developers to reserve at least 5 percent of a projects’ subscriber pool for low-income participants. The state also awarded $1.2 million in grants to build eight low-income community solar projects, including the one Palans is enrolled in.
Washington, D.C.’s new Solar for All program, which aims to help 100,000 low-income households slash their energy bills in half by 2032, recently awarded $13 million in grants for community solar and similar projects. And in New York state, a new initiative will cover the enrollment fees and other costs for 7,000 low-income households to join community solar projects. The New York State Energy Research and Development Authority recently awarded contracts for nine community solar projects with a combined capacity of 26.4 megawatts, one-third of which will be reserved for cost-free subscriptions.
“For equity reasons … there’s a basic desire to use community solar as a way to reach groups that wouldn’t otherwise participate in solar,” said Kenneth Gillingham, associate professor of environmental and energy economics at Yale University’s School of Forestry & Environmental Studies. “There is still a market that’s untapped in the low- to moderate-income communities.”
While community solar initiatives vary widely, they tend to share two overarching policy goals. First, states and cities want to reduce living expenses for low-income households, which on average spend 8.2 percent of their income on energy bills — about three times more than moderate- to high-income households. For decades, government agencies have helped residents reduce energy costs by insulating their homes, replacing leaky windows, or installing energy efficient appliances. Analysts say that in this way, community solar serves as an extension of existing energy conservation and cost-savings programs.
In Colorado, for example, the nearly 400 households enrolled in the state’s eight low-income solar projects save between 15 and 50 percent on their electricity bills, amounting to average annual savings of $382 per household, the Colorado Energy Office found. In Washington, D.C., nearly 100 households are each saving $250 a year on their electric bills thanks to a 182-kilowatt project by New Partners Community Solar, a nonprofit developer that offers free subscriptions to low-income residents.
Teaser photo credit: By MrRenewablesWestmill Solar Co-operativeBen Cavanna – Own work, CC BY-SA 3.0