Solar for low-income of all shapes and sizes

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One of the most popular sentiments in growing the reach of the solar industry is getting limited and low-income customers involved, usually through community or shared-living solar programs. However, not all low-income customers are the same and no two community solar subscription models are the same. And, just like pistons in the engine driving the solar industry, inconsistency and wiggle room can lead to trouble.

This was the issue studied by The Low Income Energy Issues Forum in their newly-published report, Low Income Consumer Solar Working Group. The report focuses on how varied and flexible community solar programs have the potential to improve utility services for these financially-limited customers. The study used six areas of service (energy assistance, treatment of arrearages (standing debt), payment arrangements, bill payment, pricing and/or discounts, and energy efficiency programs) to develop five different models through which community solar can be made to work for customers who are of limited income but for different reasons and at different levels.

The five models are the “standard” baseline subscription model, a non-profit partnership model, a distributed energy resources as resiliency insurance model, a community solar for community action model, and an investor-owned utility incentives and arrearage management model. It should be noted that, as stated earlier, the baseline model is not one cover-all national standard of “this is what a community solar model is,” but rather an aggregate of the most common and widely used features found in the spectrum of community solar programs nationwide.

Before we look at each one in depth, it’s worth noting that they do share similarities. They all share a combination of single-family/multi-family, local solar garden and remote solar farms as utilized resources and they put the bill credits in the hands of the beneficiaries and residents subscribed to this program.

 

Baseline model

In it’s most basic form, community solar is developed in response to a request for proposal (RFP) by a Community Solar Provider (CSP) – usually a non-profit, utility or retail supplier, a power purchase agreement (PPA) is made with a utility or the project is developed under a local tariff, subscribers are recruited, the project is developed and completed and subscribers receive credits on their electricity bill, so long as they continue to pay their subscription fee and electricity bill in full. If they don’t, they can get booted and replaced.

This is where the issue with the traditional model lies. By pursing low-income subscribers CSPs are accepting the risk that bills may go unpaid or not paid in full at times, yet if this model is administered as is, this could lead to extensive turnover and an inconsistent subscriber base.

 

Nonprofit partnership model

In this model, a utility engages a low income community solar developer to serve not just as a developer, but as an instructional body to provide job training to the community. Next, financing and a viable site are secured – including grants/incentives to reduce PPA costs, the 1-5 MW project is developed, the customer is fitted within their energy burden, beneficiaries of support receive bill credits within program guidelines and extra finances are used to establish a fund to assist in any missed payments.

 

Low income DER as resiliency insurance

Financing is provided upfront by a municipality, utility, customer accounts, and/or 3rd parties as is land, provided by the city or utility. Next, project developers, be they city or 3rd party, and owners of microgrids, storage, charging and generation assets develop some sort of visible project, be it distributed on single/multi-family homes, local solar gardens or nearby, larger farms or a mix of multiple and couple them with battery storage. A plan is then created to use these resources in event of disaster or extended outages. The utility then monetizes DER revenue streams. In “symbolic ownership” programs, participants can make non-burdening contributions to cost recovery or donate ‘in-kind’ volunteer services and proceeds are credited to participants directly or indirectly through expanded funds for existing low income programs. Finally, beneficiaries receive bill credits. This is one of two models to utilize energy storage.

 

Community solar for community action (CS4CA)

Here, Community based organizations, private donors, and social impact investors mix to provide funding while the land, in the case of a brownfield, or building space is provided by the host. A developer constructs the project which provides jobs to the community, and a utility or 3rd party entity participates as off-taker. From there it is the role of an energy assistance program to administer and use proceeds to extend funding of programs, add new participants or support a specific community. From there, beneficiaries receive credits or grants within agency program guidelines.

 

IOU incentives & arrearage management

In the final model, funding is again provided upfront, this time by a utility and is offset by statewide solar incentives, rebates and/or investment tax credits. Property is also provided and owned by the utility. A mix of rooftop, storage and larger, outside projects are developed and the utility monetizes DER revenue streams and deposits low income share of funds into designated account. Proceeds then go to reducing the collective arrearage balances, eliminating long-standing debt. Customers for this program are automatically enrolled based on qualification criteria and are transitioned off program after achieving financial stability by moving on to supportive programs.

 

Community connection is just as important as interconnection

While these models are excellent for conquering the variables that can arise within the distinction of low-income community solar, what is most important to successful community solar is community. As has been brought up in a different context previously, regardless of what your project is, if you can’t get the community on board, there’s a good chance that it goes nowhere.

What this working group found was that in many of these low and limited-income neighborhoods and communities the projects were welcome additions for the area. Interestingly enough in some isolated instances there was initial hesitation in support of the projects as the development was seen as a potential for gentrification. While this was not prevalent enough to be considered a consistent project barrier by any means, it is absolutely worth note to understand the level of community relation needed to ensure the project has a positive impact.

However, overall, community solar was found to be positively received by participating communities. This was found to be especially true in instances where the project was located directly in or near to the community it served. For many residents the project was seen as a net gain over what would occupy the space otherwise. Additionally, subscribers felt a sense of pride in having an ever-present and tangible reflection of the system that is saving their hard-earned money and environment.