Local partnerships are helping poorer households in the U.S. overcome cost barriers to installing solar panels, making them critical to the Biden administration’s plan to power five million U.S. homes with community solar by 2025.
“Upfront costs can be prohibitively expensive, even if they save households money over time,” explains GreenBiz. “That’s why partnerships between utilities, non-profits, financial institutions, developers, and other parties can be game-changers, creating opportunities for LMI [low- and moderate-income] participation in community solar programs that would not otherwise exist.”
Community solar programs act as a “virtual accounting instrument” to distribute the financial benefits of using solar-generated clean energy to participating households. Unlike private or personal solar installations—like residential rooftop solar, for instance—energy generation for a community solar project is often outsourced to an independent solar project located in a nearby town or utility. Participants often secure membership in the program by paying a regular subscription, says the World Resources Institute.
Community solar programs hold many advantages for LMI customers compared to private installations. Unlike rooftop systems, community solar has lower upfront costs and does not impose maintenance or repair costs on participants. LMI households are also more likely to rent than to own their homes, and may be able to subscribe to a community solar program when they could not otherwise justify a long-term infrastructure investment on rented property.
However, the lower cost of participating may not be low enough for some households. So in some communities, utilities are working with local organizations to make the programs more accessible, GreenBiz says.
In Kentucky, a community solar program established by local utilities LG&E and KU compensated customers with bill credits, but the credits were not enough to offset monthly participation costs. So the utilities worked with a non-profit and a philanthropic partner to find a solution. The partnership used grant funding to subscribe to 180 of LG&E and KU’s shares, which were then distributed to 10 LMI households to reduce their electric bills. The shares cut energy costs for the 10 households by at least 30% and reduced their greenhouse gas emissions by 88.7%.
A partnership in Boulder, Colorado improved LMI access to community solar when non-profit GRID Alternatives—which focuses “on boosting access to renewable energy and providing renewable energy education and training across demographic divides”—installed a community solar array with leveraged funding from various sources. Then local housing authority Boulder Housing Partners leased the land and entered a solar subscription agreement with GRID. That enabled the housing agency to drive down its management and administration costs by acting as “subscriber manager” for LMI households.
Corporations and solar developers have also stepped in to support community solar projects. In Washington DC, Federal Express installed an array on a warehouse rooftop and made a deal with So Others Might Eat (SOME)—a local non-profit for people living with poverty and homelessness—to donate bill credits to the non-profit. The bill credits reduced SOME’s operating expenses, allowing it to invest more towards its core mission.
“By looking closely at potential partnerships between non-profits, developers, utilities, financial institutions, housing authorities, and others, communities can take the first step to advance a local, equitable, clean energy economy,” says GreenBiz.