State Policies to Increase Low-Income Communities’ Access to Solar Power

Author:  Bovarnick, Ben | Banks, Darryl
Organization:  Center for American Progress
Report Date: 
2014
Summary: 

This report summarizes the reasons why low-income residents would benefit from solar and the various initiatives in California, Louisiana, and Coloradoto increase solar deployment within low-income communities. The authors then discuss various programs and policy recommendations that would increase solar deployment and benefit vulnerable communities. 

Key Take-Aways: 
  • Low-income households in the US spend a higher percentage of household income on energy. Solar power could reduce the energy burden of low-income households by providing electricity that is less than what utilities charge.
  • Low-income households face several barriers to going solar, including: difficulty meeting credit requirements for financing or leasing, status as a renter, and inability to benefit from tax credits or other incentive programs.
  • California has several successful programs and initiatives designed to support solar deployment to low-income families. The California Solar Initiative (CS) sets aside $216 million to support the Single-Family Affordable Solar Housing (SASH) and Multifamily Affordable Housing (MASH) that subsidize solar systems for low-income households. California also used LIHEAP funds to help support solar installations for LIHEAP eligible families.
  • Louisiana lacks public support and finance for low-income solar programs, but leasing company PosiGen has developed a model that leverages state tax credits and secures financing on community redevelopment terms.
  • Colorado’s 2010 Community Solar Gardens (CSG) Act allow homeowners who without a suitable roof or space to purchase shares of a solar installation. The Act requires that at least 5 percent of the electricity from the CSG be reserved for low-income families in order to qualify for solar renewable energy credits (SRECs).
  • California, Louisiana, and Colorado’s low-income solar policies and programs can serve as models that can be replicated in other states.
  • Policy recommendations Include:
    • Expanding community solar programs like CSGs because of the flexibility and inclusivity of their arrangements and ability to secure low prices due to bulk purchases.
    • Using brownfield properties (property that is not environmentally suitable for habitation) for solar sites.
    • Establishing green banks, property assessed clean energy (PACE) programs, loan loss reserve programs, and securitization programs to help finance solar installations for households who may not normally have access to these funding opportunities. 
Key Facts: 
  • Low-income households spend a higher percentage of household income on energy costs than higher income households. Low-income households spend 8.3 percent of their income on energy bills compared to non-low-income households that spend 2.9% on energy bills.