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Aug 27, 2014

Solar for All: Making Solar PV Accessible to Low-Income Families in the U.S.

 

Here at RMI we love seeing electricity generated by the sun. And while it’s great to see large homes owned by the likes of Woody Harrelson and Will Ferrell being solar-powered, rooftop solar should be accessible to people across the socio-economic spectrum of the U.S., not just the one percent. But putting solar on all of these different roofs is currently a serious challenge.

Even with lowered PV costs and the prevalence of third-party financing programs, solar is largely out of reach for many low-income families. Many are renters who do not own their homes, putting them at the mercy of their landlord. For those that do own their homes, few have enough tax liability to take full advantage of federal and state tax incentives for rooftop solar. That’s largely a moot point anyway, since even with incentives the steep upfront cost of rooftop solar in the U.S. still puts a PV system financially out of reach for low-income families. That’s where third-party leasing can come in, but many low-income families have low credit scores and most solar leasing companies require a credit score of at least 700. It’s one potential financial barrier after another.

Fortunately, there are groups around the country working to overcome these barriers to market participation and ultimately bring solar to low-income households. Giving low-income families access to solar PV systems can help lower their utility bills, provide employment opportunities, and bring about an element of environmental justice.

Saving Money

Low-income families spend over twice the proportion of their total income on energy bills than the average person in the United States. When low-income families have high energy bills one of the first thing they often skimp on is food. Researchers from the Boston Medical Center have found that children in energy-insecure households don’t get enough food, have poorer health, and are more prone to developmental problems. One way to lower energy bills and keep food on the table is to power homes with solar photovoltaics.

“Low-income families pay into the rebate pool like everyone else. Yet often, even with rebates, they can’t afford a solar home system,” Shirley Moore, program manager at Grid Alternatives, told RMI. Grid Alternatives, or simply Grid, as it is fondly called, is a nonprofit organization providing low- to no-cost PV systems to low-income families throughout California, Colorado, New York, New Jersey, and Connecticut. Homeowners who earn 80 percent or less of the median income and have a solar-appropriate roof qualify for a Grid Alternatives PV system. “We see people save an average of 50 to 75 percent off their electric bill. Money that can go towards paying their mortgage, putting food on the table, or saving for college,” said Moore.

Grid works with local partners to find qualifying families. The families do not have to put any money down, but do have to contribute 16 hours of sweat equity. They can work in the Grid office, help on the installation, or even cook lunch for the installation volunteers. They then pay $0.02 per kilowatt-hour for what their system produces. It’s a small price to pay for leasing the system, often adding up to only about $100 per year, but according to Chuck Watkins, executive director of Grid Alternatives–Colorado, “we want the homeowners highly engaged with their system and aware of their energy usage.”

A similar organization, Citizens Energy, provides free solar PV systems that reduce homeowners’ electricity costs by 40 to 50 percent in the Imperial Valley of California, an area with the highest unemployment rate in the country. With temperatures in the area climbing to 120 degrees Fahrenheit, homeowners can have a difficult time paying for the electricity to run their air conditioners. Citizens Energy uses 50 percent of its profits from its share of the Sunrise Powerlink high-voltage transmission line that brings renewable energy to the San Diego region to purchase, install, and maintain the systems. The homeowner signs a 20-year lease only after they receive a free energy audit and weatherization services. One of the 200 homeowners to receive the free PV system saw her monthly summer electricity bill go from $350 to $85.

A statewide program in California is also helping low-income families. SASH (Single-family Affordable Solar Homes) provides fully subsidized 1 kW systems to very-low-income households (50 percent or below the area median income), and highly subsidized systems to other low-income households. The incentives for the subsidized systems range from $4.75 to $7.00 per watt, depending on the customer’s utility rate schedule and tax liability. Incentives are higher for customers who cannot take advantage of the ITC. Over 3,600 systems have been installed, and participating families’ electricity bills have been reduced by approximately 80 percent.

Green Jobs

Another benefit to bringing solar access to low-income families is increasing employment opportunities. Low-income communities often have high rates of unemployment. Yet more than 140,000 people are employed in the solar industry, more than half of them in installation jobs that can’t ever be outsourced. That’s a drop in the bucket of the 46.5 million Americans currently living in poverty, but with solar installations growing at a rate of 40 percent, those jobs are going to keep growing as well. Grid Alternatives, for its part, installs its systems with local volunteers and partners with job training organizations to provide hands-on field experience students need to get certified as solar installers and to get jobs. Partners include community colleges and vocational schools, the Center for Employment Training, YouthBuild, Veterans Green Jobs, and Green City Force.

At a recent installation in Carbondale, Colorado, twelve local volunteers along with the homeowner helped install a 3.6 kW system for Dan and Pam Rosenthal. “Once a volunteer comes out to at least four to six of our installs, they can become a team leader,” Moore told RMI. “They then get valuable hands-on experience as well as experience in leading crews, and a lot of our team leaders end up getting employed in the industry.”

Environmental Justice

“Clean energy access for low-income Americans,” writes clean energy development and policy professional Bryan Lewis for ThinkProgress, “is not just an issue of economics, but an issue of justice, as well.” Lower-income people in the United States are more susceptible to the negative impacts of climate change, may be more affected by urban pollution, and face health issues from living closer to coal plants. “Often times low-income families are the ones most affected by pollution,” Chuck Watkins told RMI. “So it’s nice for them to be able to be part of the climate change solution.”

The Rosenthals had been trying to figure out a way to get a solar PV system for years. Even with the rebates it was still out of reach. So they were ecstatic when they learned about Grid Alternatives. “It’s great that we will be saving money,” said Pam Rosenthal, “but even more important to us than that is we want to reduce our ecological footprint and do our part for the environment.” The Rosenthal’s system is estimated to save them 75 percent off their $90 electric bill each month. But more exciting for Pam is the amount of CO2 that they will be offsetting in the lifetime of their system, helping Carbondale reach its carbon goals.

The town of Carbondale has a goal of generating 35 percent of its electricity by renewable energy by 2020. “It’s a big goal,” said Carbondale Town Trustee Pam Zentmeyer, “and we need participation from everyone if we’re going to do it. It’s great these organizations have erased the financial barriers.”

Image courtesy of the author.

Join the Discussion


Showing 1-3 of 3 comments

August 28, 2014

A decade ago, the solar industry was almost nonexistent in the U.S. There was a large solar thermal power plant in the Mojave Desert that was completed in 1984; but between then and around 2008, there was almost no solar activity in the US. Latest technologies and federal policies are playing an important role behind booming US solar energy sector. Here's an good article on the factors that booming U.S. solar energy sector - http://bit.ly/1ygoG5M


August 28, 2014

Just make sure no one lives off-grid. There are zero rebates or any incentive to actually live off-grid. there are no special loan incentives or support from government...period. There is now talk of a special tax for those of us who do live off-grid because we are not paying our fair share of the utilities.


September 1, 2014

I thought the special tax was for people who are grid tied. For use of the grid distribution system. Either way it is a stupid thing to do.

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