New Working Paper Identifies Emerging Policy Tools to Bridge the Solar Income Gap

Low income white page
January 27, 2015

GW Solar Institute builds on the first national conference to address solar barriers unique
to lower income communities, releases recommendations for policymakers

WASHINGTON, DC – Today, the GW Solar Institute is releasing a new working paper, entitled Bridging the Solar Income Gap, which details a wide range of policy tools to increase access to affordable solar energy, particularly for lower income families. These urgently needed tools could help unlock solar energy for all Americans and drive billions of dollars of solar wealth into lower income communities.

The working paper released today summarizes and elaborates on the findings from the 2014 Solar Symposium – the first national conference to focus on lower-income solar issues – and provides several specific policy recommendations based on the input from key stakeholders and experts that attended the September 2014 event. A summary of the main findings and policy recommendations from the working paper appears below.

Solar energy’s rapid growth has been slow to extend to lower income neighborhoods, despite their real needs as well as the potential savings on public energy assistance programs. Households earning less than $40,000 of income per year only account for less than five percent of residential solar installations, according to recent reports by the Center for American Progress. These lower income households make up 40 percent of all US households, or roughly 49.1 million households.

“Solar energy in the US is booming, but it’s bypassing lower-income Americans that could benefit from it the most,” said Amit Ronen, Director of the GW Solar Institute. “Solar could be a long-term wealth generator in low-income communities, but reaching this market segment will require smart, targeted policies to overcome challenging barriers.”

“I think solar is the people’s power,” said Symposium participant Rhone Resch, President of the Solar Energy Industries Association. “It is the people’s power of choice. And what we now need to do as an industry is make sure that solar is available to all people who want to install solar.”

Lower income families face many barriers to going solar. They are less likely to own their roofs as either a renter or occupant of multifamily housing, to have access to the necessary capital, or to be able to realize a solar system’s savings on their utility bills due to how they pay their utility bills.

“We have to ask those questions and think about all of our policies in terms of is this going to benefit low-income families,” said Erica Mackie, CEO of GRID Alternatives, at the 2014 Symposium. “You can’t take an underserved market and hope that that market is going to serve itself.”

Continuing the solar industry’s momentum will require policymakers to extend successful solar policies and develop additional targeted policies that unlock the private capital needed to support low-income solar investments. In order for the solar industry to grow beyond early adopters, solar will need to reach households across the income spectrum while also becoming independent of government subsidies over time.

“They see solar in their community as a ray of hope,” said Anya Schoolman, Founder and Executive Director of the Community Power Network and a Symposium moderator. “They want to own it. They want the empowerment of making their own energy. They want to bring the jobs to their communities.”

Individuals interested in contributing their feedback to the Bridging the Solar Gap working paper should submit their suggestions to [email protected] within 60 days.

Key Findings and Policy Recommendations

  1. Emerging community and shared solar policies are a particularly promising pathway to further low-income solar and should be adopted by more states. 
  2. More tools are needed to enhance credit, lower credit risk, and leverage private capital including:
    • Establishing a federal low-income green bank

    • Expanding state credit enhancement programs

    • Expanding on-bill repayment and commercial property assessed clean energy (PACE) financing options. 

  3. Solar should be fully integrated into existing energy efficiency and energy assistance programs, including the Weatherization Assistance Program (WAP) and the Low-Income Home Energy Assistance Program (LIHEAP).
  4. Solar deployments in lower income communities will require utility partners, whether directed through state legislation, utility commissions, or induced through creative value propositions.
  5. Substantial outreach and education will be necessary to reach lower income communities. Recommendations include:
    • Encouraging employers and national organizations to sponsor solarize and leasing programs for their employees and/or members.

    • Create a government-sponsored check-off program to impose mandatory assessments on producers to fund broad industry-wide research and education campaigns.

  6. Proven policies that make solar more accessible and affordable should be continued and expanded:
    • Continue state level net energy metering (NEM) policies.
    • Extend the 30 percent Investment Tax Credit (ITC) beyond 2016 and make it transferrable, and preserve existing tax depreciation schedules.
    • Extend the New Markets Tax Credit (NMTC) and make the Low-Income Housing Tax Credit (LIHTC) more accessible to low-income solar projects.
    • Fully fund the U.S. Department of Housing and Urban Development (HUD) and U.S. Department of Agriculture (USDA) financing programs during annual appropriations process.
    • Maintain funding for the U.S. Department of Energy’s Solar Energy Technologies Program