August 14, 2013

Opening the Roof for Affordable Solar

The high upfront cost of solar has always been a barrier for many who would otherwise welcome the chance to green their energy supply. Many organizations, including IREC, are working to change this with solutions like CleanCARE to break through these economic barriers.

The high upfront cost of solar has always been a barrier to participation for many who would otherwise welcome the chance to green their energy supply.  So has a lack of roof ownership for renters.  These factors, along with other barriers have given solar somewhat of a reputation – that it’s really only a feasible option for the wealthier homeowner.  Many organizations, including IREC, are working to change this by offering solutions to break through these economic barriers. After all, renewable energy could theoretically be viewed as a great equalizer.

Like many energy efficiency programs, solar can be an excellent way to reduce long-term energy costs.  But it also goes a step further by providing a hedge against rising energy prices, which often represent a disproportionately large line item on low-income budgets.

States have tried a number of different approaches to facilitating solar development among low-income residents. Massachusetts, for example, provides a “Moderate Home Value” and “Moderate Income Adder,” each equaling an additional $0.40/watt onto the existing state rebate.  Vermont also provides an incentive adder under  its rebate program for low-income households, schools and non-profits, which can equal up to $1.50/watt higher than would be available for other customers.  And in Denver, Colorado, the Clean Energy Collective (CEC) has recently pledged to devote five percent of the power produced by three community solar facilities to low-income residents under a new partnership with the Housing Authority of the City and County of Denver. This Community Solar Low-Income Residential Program will offset the electric bills for approximately 35 families living in the housing authority’s facilities.

California also has interesting models.  The California Solar Initiative is required to allocate at least 10 percent of its $2.2 billion budget toward funding for installations of solar systems on low-income residential housing, and consequently has individual solar programs for both single-family and multifamily low-income buildings.

IREC has also been working with stakeholders in California to propose an innovative new program in conjunction with the existing California Alternate Rates for Energy (CARE) program. Under this program, low-income utility customers may receive a 30-35 percent discount on their electric and natural gas bills. IREC sees solar and alternative energy options as a natural extension of this initiative and has put forth a proposal called CleanCARE.

Under IREC’s CleanCARE proposal, a portion of the funds allocated to support CARE participants would be invested in shared solar energy facilities and participants would receive the resulting net energy metering bill credits. So, rather than receiving a rate discount as under the traditional CARE program, participants who elect the CleanCARE option would be allocated shared solar program shares, in effect providing a bill discount.

These credits could be coupled with appropriate energy efficiency measures to have an even greater energy-reducing effect. The end goal of the CleanCARE option would be to produce bill savings for low-income families at a level equal to or greater than what they currently receive under the CARE program.

The logistics of such a program would be similar to shared solar programs found around the country.  While these programs could be run by a number of different entities, utility management would likely be the most logical, as they already manage the CARE program.  The shared renewables facilities could also be located to take advantage of the best solar, wind, or other local resources and structured to take advantage of any financing or long-term funding mechanisms available.

There are a number of benefits to such an approach.  It would essentially achieve the same effect as the CARE program, while additionally creating renewable assets that have long-term value to the ratepayers who fund the program.  It would also align with California’s ambitious 33 percent renewable energy goal and the governor’s 12,000 megawatt distributed generation goal.  And perhaps most importantly, it would provide a feasible route for low-income residents to participate in renewable energy programs in ways they currently cannot.

Solar is versatile, easily deployed, makes financial sense and offsets more polluting forms of generation.  It seems logical, then, to set up pathways for more people to tap into this technology, especially when it is such a favorable solution for everyone involved.

Editor’s note: This article previously stated in error that the CARE program offers low-income customers a 20 percent discount on utility bills. The article has been revised to reflect that customers receive a discount of 30-35 percent.