IREC Releases New Policy Guidelines and Model Provisions

LMI Cover_FINAL_030316As more Americans gain access to affordable renewable energy, and as more “shared” and “community” solar programs crop up across the country, states are asking the question: How can we bring shared renewable energy opportunities to our low and moderate income (LMI) households? A new publication by IREC offers the first comprehensive guidance on how it can be done with the most meaningful results.

“Opening more neighborhood doors to solar and other renewable energy is our goal with these guidelines,” says IREC President/CEO Jane Weissman, “specifically doors of low or moderate income homes and those in disadvantaged communities.”

IREC’s Shared Renewable Energy for Low- to Moderate-Income Consumers: Policy Guidelines and Model Provisions provides information and tools for policymakers, regulators, utilities, shared renewable energy developers, program administrators and others to support the adoption and implementation of shared renewables programs specifically designed to provide tangible benefits to LMI individuals and households.

These first-of-their-kind policy guidelines offer deep insight into the specific challenges LMI consumers face to enjoying the benefits of shared renewables programs. Included are specific case studies to examine lessons learned and highlight innovative tools and approaches. The accompanying model rules provide stakeholders with a strong starting point for discussion, and potential implementation.

“Shared renewable energy programs have tremendous potential to expand access and provide meaningful benefits to low- and moderate-income customers,” explains Sara Baldwin Auck, IREC’s regulatory program director. “Incorporating many perspectives – including from LMI customer advocates, environmental and environmental justice advocates – these guidelines take into account LMI customer realities and offer workable solutions.”

Low- to moderate-income households (i.e., those earning up to 120 percent of Area Median Income) represent approximately 60 percent of U.S. households. These households typically spend a higher percentage of income on energy costs than their higher-income peers, and thus stand to benefit significantly from reducing their energy bills through a combination of conservation, energy efficiency and renewable energy measures, including through shared renewables programs. Yet the people in these households often face considerable financial barriers, such as lack of access to capital or insufficient credit, as well as other barriers, that often prevent them from participating in these programs.

A higher proportion of LMI individuals and families live in rental or multifamily housing. While shared renewables programs present a promising avenue for them, since the generation systems may be off-site, renters and other multitenant dwellers still face various obstacles. In addition, language barriers, lack of Internet access, and constraints on resources and time may prevent LMI customers from being aware of available shared renewable energy programs and associated financing options.

“Designing scalable shared renewable energy programs and facilitating LMI customer participation in these programs are mutual goals for many states and other stakeholders,” says Erica Schroeder McConnell, an attorney for IREC and major contributor to the document. “Taken in concert with IREC’s existing Model Rules for Shared Renewable Energy Programs, these LMI guidelines and model provisions are intended to help inform the development of programs that achieve both goals going forward.”

IREC’s guidelines consider that moderate-income customers may have different circumstances (such as higher credit scores or higher rates of ownership) than low-income customers; so while LMI customers are often grouped together, different program design approaches may be necessary to more effectively reach the range of customers within the LMI category.

IREC also notes that some barriers to LMI customer participation may remain since they are dependent on policies outside the scope of shared renewables program design. IREC suggests that policymakers and others be aware of these restrictions and take them into account when designing programs.

“IREC encourages policymakers and others to think carefully about the overarching goals of an LMI shared renewable energy program prior to designing it, including any financing components,” says Auck. “In turn, these goals will dictate how the program is designed, evaluated, and ultimately whether or not the program is considered successful.”

 Download the report.