One myth still plagues the solar industry, despite increasingly being proved wrong by, you know, facts: People who install solar systems on their roofs are eminently wealthier than non-solar consumers.
The reason this myth is dangerous for two reasons. First, it allows solar’s critics to paint the increasingly popular energy producer as the province of an out-of-touch elite instead of a power source for everyone. Second, it may discourage otherwise excellent solar customers from looking into installing it on their roofs because of the mistaken belief it is too expensive.
The study examined the household income differential between solar and non-solar homeowners in California, Massachusetts, New Jersey and New York. These states currently account for 65% of all residential installations in the country. In examining the data, GTM and PowerScout discovered that 70% of solar households have a medium income between $45,000 and $150,000, which the studies authors say is middle income.
It is true that within that middle-income group, overall incomes skew higher than those of the general population of those states, and the authors say the average household income for solar adopters is $75,000 per year. They also acknowledge their research doesn’t necessarily apply to the entire United States and should be replicated at a later date with a broader geographic diversity.
One market the report’s authors say is significantly underserved is low-income households, although significant progress has been made in these four states. With 532 MW currently installed, these four states are currently generating more than half of the 1 GW-by-2020 goal for low-income neighborhoods set by the Obama Administration’s Clean Energy Savings for All Americans Initiative in July.
The authors credit organizations like GRID Alternatives, which focuses on low-income solar installation, with fostering this level of adoption to date and suggests other industry players should get involved as well to push the number even higher.
What surprised the authors is that is the income distribution of solar households is more wealthy in California and New York than it is in Massachusetts and New Jersey. They offer the following potential explanations:
- Subsidies: In New York, the state provides an additional tax credit (up to $5,000) that can only be used by the customer. PPA/lease providers cannot take advantage of this incentive and pass along savings to the customer.
- Rate Structure: In California, tiered electric-rate structures may have provided additional incentive for households with high electric consumption (which tend to be wealthier) to adopt solar
- Timing of Adoption: In more mature markets (e.g., California), many solar installations occurred when solar system prices were higher and were likely driven by early adopters (who tend to be wealthier)
- Network/Neighborhood Effects: Various factors above may have been magnified by network/neighborhood effects – people whose neighbors have gone solar are more likely to adopt solar themselves