How supportive policies can make an impact on community solar and energy equity
(Credit: DOE)
Contributed by Bruce Stewart, CEO & President of Perch Energy
In the United States, the 44% of households that count as low-income face three times the average energy burden of other households. In certain parts of the country, as much as 30% of a family’s budget has to be spent on energy. Faced with such challenges, the electricity bill discounts that community solar energy provides can materially benefit disadvantaged households by freeing up money to be spent on other needs.
Community solar offers a great option to connect these frontline communities with clean energy and savings. Here’s how it can help – and what state and federal measures can do to further boost its positive impact.
Rooftop solar embeds energy inequities
Disadvantaged households stand to benefit significantly from solar energy’s electricity savings. However, physical and financial impediments block most lower-income households from traditional solar. Physically, the prerequisite that households must own their rooftops (and that those rooftops possess sufficient space) limits renters and apartment dwellers from participating. Financially, the upfront costs mean many would-be participants cannot afford installation, even if the investment would pay off over time. While loans are available, many disadvantaged households might either not qualify or want to commit to a decades-long agreement, especially if the financial benefit is delayed for several years.
Community solar opens access to clean energy savings
Thankfully, another option exists. Community solar enables anyone to access electricity savings, regardless of household income or housing type. Whether people rent or own, live in a five-bedroom house or a 200-square-foot studio, households can save 5-20% through electricity bill discounts. Certain governmental policies and programs are helping to make those benefits even more accessible.
How does community solar work? Subscribers throughout the utility area sign up for a “share” of an off-site solar farm project proportional to their electricity usage and receive a discount on their electric bill. After community solar savings appear—which usually takes at least one billing cycle—most subscribers see discounts of around 5-20% annually, depending on the state.
Three barriers to adoption
Even though disadvantaged communities stand to benefit from community solar, we often see three barriers to adoption: awareness, accessibility, and trust. Here’s how community solar providers and their government partners can promote these three pillars needed to succeed.
Awareness
Given community solar is a relatively new technology and option for customers, providers should partner with established channels to help potential customers understand that it exists, that signup is easy, and that it offers clear benefits. The Low Income Clean Energy Connector (LICEC), a new digital tool developed by governmental entities including DOE, the Department of Health and Human Services, the National Renewable Energy Laboratory, and the National Community Solar Partnership, aims to help disadvantaged communities access community solar through their existing interactions with relevant government programs.
For example, once LICEC goes fully live, households can 1) learn about community solar from local administrators of the Low Income Home Energy Assistance Program (LIHEAP), 2) sign up through the Connector for more information on available or upcoming community solar projects, then 3) subscribe with a servicer.
Accessibility
As more community solar projects come online, customers seek an easy, streamlined subscription process that involves minimal time. In contrast, low-income customers face greater demands. They must navigate an obstacle course to access community solar discounts, including hunting down official documentation of their low- or middle-income (LMI) status to qualify for provisions such as higher discount percentages. Plus, in many states, community solar credits arrive on a separate bill rather than showing discounts on the utility bill directly.
Fortunately, recent state legislation (including in New Jersey, Maryland, and the original trailblazer, New York) marks a trend towards two policies that would significantly ease the subscription process. Utility consolidated billing (UCB), where community solar subscribers see their credits applied automatically to their regular utility bill, and self-attestation, where subscribers can certify their low- or middle-income status without needing to provide official paperwork.
Both policies go a long way toward improving accessibility and making the process easier for all customers. Consequently, many community solar providers are encouraging UCB and self-attestation provisions in more states through work with advocacy organizations, such as the Coalition for Community Solar Access.
Trust
Electricity discounts are always appealing to consumers, but consumers are likewise prudent to verify the savings. To convince consumers that savings from community solar subscriptions are not too good to be true, community solar must emphasize consumer protections and help customers by clarifying potential misunderstandings upfront.
Federal and state initiatives are increasing consumer protections to enshrine best practices into law. For example, the Low Income Clean Energy Connector prohibits signup fees, cancellation penalties, or any other hidden costs that might detract from electricity savings. Plus, the 2022 Inflation Reduction Act incentivizes community solar providers to service disadvantaged communities through its Low-Income Bonus Credit Program, which offers 20% savings to LMI customers for projects that reach a certain LMI capacity threshold.
Meanwhile, at the state level, New Jersey guarantees a 15% minimum discount for all subscribers. It mandates that at least 51% of every community solar project go to LMI customers, ensuring disadvantaged communities receive the benefits of community solar. Maryland ensures 10% minimum savings for LMI subscribers and prohibits signup fees or credit checks. And New York serves disadvantaged communities through its Solar For All program and its Inclusive Community Solar Adder, where developers can access tax incentives through building LMI-serving projects.
Community solar providers can build on these consumer protections by providing clear, steady communication. Community solar overviews, project information, summaries of anticipated short- and long-term savings, and reminders of easy signups + no-fee cancellations are just some ways that trained customer care agents ready to honestly answer any questions can help boost subscriber confidence. Comprehensive customer education and responsive customer service can help subscribers start their community solar experience on a positive footing.
What’s next?
Nationally, the Low Income Clean Energy Connector will soon join the Inflation Reduction Act’s community solar provisions as an integral federal support of community solar buildout. Beta testing for the tool starts soon in a few selected states, with more states following later this year and next after the tool’s creators implement feedback. Across state governments, more and more legislatures are turning community solar pilot programs into permanent programs or expanding and revising program structures to accommodate the fast-growing demand for community solar savings and benefits.
Clean energy can and should benefit all Americans. To achieve this goal, clean energy programs serving disadvantaged communities must build awareness, accessibility, and trust. By prioritizing these pillars, community solar providers, initiatives like the Low-Income Clean Energy Connector, and ongoing state legislation can help community solar to democratize clean energy access.
About the author
Bruce Stewart is President and CEO of Perch Energy, a Boston-based company focused on accelerating access to community solar nationwide. Bruce has 30+ years of experience leading both energy and technology companies, serving as president of Direct Energy Home, co-president of Centrica US Holdings, and executive positions at GE Current and Constellation Energy.
