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Published on August 29th, 2014 | by Rocky Mountain Institute

16

Making Solar Available To Those Who Need It Most

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August 29th, 2014 by  

Rocky Mountain Institute.
By Laurie Guevara-​Stone.

Here at RMI we love seeing electricity generated by the sun. And while it’s great to see large homes owned by the likes of Woody Harrelson and Will Ferrell being solar-powered, rooftop solar should be accessible to people across the socio-economic spectrum of the U.S., not just the one percent. But putting solar on all of these different roofs is currently a serious challenge.

Even with lowered PV costs and the prevalence of third-party financing programs, solar is largely out of reach for many low-income families. Many are renters who do not own their homes, putting them at the mercy of their landlord. For those that do own their homes, few have enough tax liability to take full advantage of federal and state tax incentives for rooftop solar. That’s largely a moot point anyway, since even with incentives the steep upfront cost of rooftop solar in the U.S. still puts a PV system financially out of reach for low-income families. That’s where third-party leasing can come in, but many low-income families have low credit scores and most solar leasing companies require a credit score of at least 700. It’s one potential financial barrier after another.

Fortunately, there are groups around the country working to overcome these barriers to market participation and ultimately bring solar to low-income households. Giving low-income families access to solar PV systems can help lower their utility bills, provide employment opportunities, and bring about an element of environmental justice.

SAVING MONEY

Low-income families spend over twice the proportion of their total income on energy bills than the average person in the United States. When low-income families have high energy bills one of the first thing they often skimp on is food. Researchers from the Boston Medical Center have found that children in energy-insecure households don’t get enough food, have poorer health, and are more prone to developmental problems. One way to lower energy bills and keep food on the table is to power homes with solar photovoltaics.

“Low-income families pay into the rebate pool like everyone else. Yet often, even with rebates, they can’t afford a solar home system,” Shirley Moore, program manager at Grid Alternatives, told RMI. Grid Alternatives, or simply Grid, as it is fondly called, is a nonprofit organization providing low- to no-cost PV systems to low-income families throughout California, Colorado, New York, New Jersey, and Connecticut. Homeowners who earn 80 percent or less of the median income and have a solar-appropriate roof qualify for a Grid Alternatives PV system. “We see people save an average of 50 to 75 percent off their electric bill. Money that can go towards paying their mortgage, putting food on the table, or saving for college,” said Moore.

Grid works with local partners to find qualifying families. The families do not have to put any money down, but do have to contribute 16 hours of sweat equity. They can work in the Grid office, help on the installation, or even cook lunch for the installation volunteers. They then pay $0.02 per kilowatt-hour for what their system produces. It’s a small price to pay for leasing the system, often adding up to only about $100 per year, but according to Chuck Watkins, executive director of Grid Alternatives–Colorado, “we want the homeowners highly engaged with their system and aware of their energy usage.”

A similar organization, Citizens Energy, provides free solar PV systems that reduce homeowners’ electricity costs by 40 to 50 percent in the Imperial Valley of California, an area with the highest unemployment rate in the country. With temperatures in the area climbing to 120 degrees Fahrenheit, homeowners can have a difficult time paying for the electricity to run their air conditioners. Citizens Energy uses 50 percent of its profits from its share of the Sunrise Powerlink high-voltage transmission line that brings renewable energy to the San Diego region to purchase, install, and maintain the systems. The homeowner signs a 20-year lease only after they receive a free energy audit and weatherization services. One of the 200 homeowners to receive the free PV system saw her monthly summer electricity bill go from $350 to $85.

A statewide program in California is also helping low-income families. SASH (Single-family Affordable Solar Homes) provides fully subsidized 1 kW systems to very-low-income households (50 percent or below the area median income), and highly subsidized systems to other low-income households. The incentives for the subsidized systems range from $4.75 to $7.00 per watt, depending on the customer’s utility rate schedule and tax liability. Incentives are higher for customers who cannot take advantage of the ITC. Over 3,600 systems have been installed, and participating families’ electricity bills have been reduced by approximately 80 percent.

GREEN JOBS

Another benefit to bringing solar access to low-income families is increasing employment opportunities. Low-income communities often have high rates of unemployment. Yet more than 140,000 people are employed in the solar industry, more than half of them in installation jobs that can’t ever be outsourced. That’s a drop in the bucket of the 46.5 million Americans currently living in poverty, but with solar installations growing at a rate of 40 percent, those jobs are going to keep growing as well. Grid Alternatives, for its part, installs its systems with local volunteers and partners with job training organizations to provide hands-on field experience students need to get certified as solar installers and to get jobs. Partners include community colleges and vocational schools, the Center for Employment Training, YouthBuild, Veterans Green Jobs, and Green City Force.

At a recent installation in Carbondale, Colorado, twelve local volunteers along with the homeowner helped install a 3.6 kW system for Dan and Pam Rosenthal. “Once a volunteer comes out to at least four to six of our installs, they can become a team leader,” Moore told RMI. “They then get valuable hands-on experience as well as experience in leading crews, and a lot of our team leaders end up getting employed in the industry.”

ENVIRONMENTAL JUSTICE

“Clean energy access for low-income Americans,” writes clean energy development and policy professional Bryan Lewis for ThinkProgress, “is not just an issue of economics, but an issue of justice, as well.” Lower-income people in the United States are more susceptible to the negative impacts of climate change, may be more affected by urban pollution, and face health issues from living closer to coal plants. “Often times low-income families are the ones most affected by pollution,” Chuck Watkins told RMI. “So it’s nice for them to be able to be part of the climate change solution.”

The Rosenthals had been trying to figure out a way to get a solar PV system for years. Even with the rebates it was still out of reach. So they were ecstatic when they learned about Grid Alternatives. “It’s great that we will be saving money,” said Pam Rosenthal, “but even more important to us than that is we want to reduce our ecological footprint and do our part for the environment.” The Rosenthal’s system is estimated to save them 75 percent off their $90 electric bill each month. But more exciting for Pam is the amount of CO2 that they will be offsetting in the lifetime of their system, helping Carbondale reach its carbon goals.

The town of Carbondale has a goal of generating 35 percent of its electricity by renewable energy by 2020. “It’s a big goal,” said Carbondale Town Trustee Pam Zentmeyer, “and we need participation from everyone if we’re going to do it. It’s great these organizations have erased the financial barriers.”

Image courtesy of the author.

Source: Rocky Mountain Institute. Reproduced with permission.

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About the Author

Since 1982, Rocky Mountain Institute has advanced market-based solutions that transform global energy use to create a clean, prosperous and secure future. An independent, nonprofit think-and-do tank, RMI engages with businesses, communities and institutions to accelerate and scale replicable solutions that drive the cost-effective shift from fossil fuels to efficiency and renewables. Please visit http://www.rmi.org for more information.



  • inductancereluctance

    “the steep upfront cost of rooftop solar in the U.S. still puts a PV system financially out of reach for low-income families. That’s where third-party leasing can come in,”

    Solar leases and PPAs hardly save you anything when compared to a purchase. In fact the solar leasing companies only advertise a savings of 10% to 15% on their websites. Solar leases and PPAs are two of the most expensive ways to have a solar system on your roof.

    You’re far better off with a $0 down FHA solar loan that offers tax deductible interest. Or in many states, one of the new PACE financing programs that lets you make your payments through your property tax bill.

  • Mint

    If you want to get solar to the masses, establish a system where people can buy a share of a solar farm (or pay for a share of a farm’s PPA each month), and the production from that share of the solar farm reduces your electric bill.

    It’s not like net-metered houses can live without the grid either, so what’s the difference?

    • GCO

      Hmm, no, it’s not quite the same: grid-tied residential PV produces power pretty much where it is used and at the right (low) voltage, lightening the load on transmission equipment (powerlines, transformers etc).
      Power from some remote solar farm would incur the same distribution costs as other forms of generation, making it much less interesting financially.

      FWIW, I signed up for the optional “wind+solar electricity only” plan offered by my city-owned utility: it was an additional 1.5c/kW⋅h. Not much, but obviously not something someone already short on cash would consider.

      • Mint

        That’s a myth.

        The only thing residential PV saves is energy loss, which is ~7% from plant to consumption, so maybe residential solar can save half that if you’re lucky.

        But transmission cost is based on capacity, not generation. Residential solar:
        A) does nothing to reduce the peak transmission needs of companies on cloudy days
        B) does nothing to reduce the peak transmission needs of homes during air-conditioned evenings
        C) has very peaky generation (encouraged by net zero-net consumption goals), so a block of homes all with solar will produce far more output at noon than they would ever consume at one time

        D) has losses when going back upstream through old transformers that weren’t designed with such functionality in mind

        There are no transmission cost savings. The only reason it’s less interesting financially is net metering price schemes imposed on utilities, where they are forced to credit you at retail price instead of buying at wholesale price from a generator.

        If you’re going to impose something on utilities, then do it with solar quotas.

        • Ronald Brakels

          I don’t know where you are, Mint, but I’m guessing it must be a strange place, because rooftop solar definitely reduces peak load on transmission here. In Australia peak electricity use occurs on hot summer afternoons. And last time I checked this was also true in every US state except Alaska.

          By reducing the peak demand for grid electricity rooftop solar reduces the amount of transmission infrastructure that is required.

          For the vast bulk of the human population peak electricity use does not occur when it is cloudy on account of how clouds reduce the demand for air conditioning. In addition solar PV continues to produce electricity when it is cloudy. It just produces less.

          Rooftop solar reduces air conditioner demand in the evening in Australia as the marginal cost of electricity from new solar is now about zero to six cents a kilowatt-hour to households so people are now cooling their houses with solar electricity before they come home instead of causing a big drain when they get home in the early evening and use the air conditioning to cool a hot house. (Again note that we use less electricity after the sun the goes down as it is less hot when the sun isn’t shining and also the commercial and industrial sectors are using less electricity.)

          Currently electricity exports from rooftop solar are used locally. As far as I am aware we don’t have any consistantly solar exporting suburbs in Australia yet. (Although that is coming.) If there was a situation where old equipment was causing losses that represents a loss of electricity distributors could be selling to someone and they would reduce those losses as soon as there was a profit in doing so.

          And a further note, heat constrains transmission capacity in Australia. By preventing a build up of heat in transformers during the day by reducing grid demand, point of use solar allows a greater amount of electricity to be transmitted though the grid in the evening. This is not currently an issue in Australia as we have plenty of transmission capacity to meet evening demand, but it is useful for developing countries that are still expanding their grids.

          • Mint

            Residential load peaks in the evening when solar output is minimal.

            In the evening, it’s not just A/C load that gives residential demand a high peak.
            http://www.wateronline.com/doc/part-6-peak-leveling-in-urban-water-reticulat-0001
            http://enpub.fulton.asu.edu/powerzone/loadforecast/System%20parameters.htm
            This one is particularly detailed:
            http://www.solarchoice.net.au/blog/how-do-i-use-electricity-throughout-the-day-the-load-curve/
            So in Australia, peak residential load is on winter evenings.

            At noon, rooftop solar output from, say, 20 houses will be 150-200kW (about 5-7 times average demand for net-zero houses). Those houses would never use that much power simultaneously. So transmission costs most definitely do not go down.

            Most importantly, the bulk of electricity use is not residential. It’s commercial and industrial, especially in developing countries. Rooftop solar gets transmitted to them. FYI, the argument for using residential solar there isn’t to reduce heat buildup in transformers, but to avoid building a grid altogether. Solar is an excellent way to get power to people without grid access, but doesn’t address the vast majority of electricity usage there.

          • Ronald Brakels

            Mint, peak electricity use in Australia occurs on hot summer afternoons. You can look it up. Peak grid demand is still on hot summer afternoons. Just don’t confuse current peak grid demand with peak electricity use. They’re no longer the same thing.

            In Australia we have the strange habit of running residential, commercial and industrial power off the same grid and don’t have separate grid for each. (We’re just lazy I guess.) Residential and commercial are particularly intermixed.

            In Australia we install rooftop solar on residential, commerical, and industrial buildings. Currently commercial and industrial building have less, the main reason why being we’re not very bright.

            At noon solar electricity generated by 20 houses averages around 13 kilowatts at noon on a cloudless day. And that’s in South Australia, the state with the most rooftop solar. 150-200 kilowatts of clean solar electricity at noon would be great, but unfortunately we have nowhere near that much.

            Helping to keep transformers cooler during the say is a minor advantage of point of use solar, but still one that is useful to the many countries because oddly enough they are still expanding their grids both in reach and capacity.

          • Ronald Brakels

            I’ll mention that today’s an interesting day in South Australia. The temperature is perfect and it’s Sunday so as a result of efficiency improvements and to a lesser extent rooftop solar, grid electricity demand is dropping to the lowest point it has been in perhaps decades. But even if there were no clouds around we’d still only be getting maybe 37% of our total electricity use from point of use solar. We’ve still got a long way to go before solar can meet all demand around noon even on the most favorable of days. But we will get there on account of the economics of it.

    • Bob_Wallace

      I agree, community owned solar farms are a good way for many people to have the benefits of solar without going through the process of putting panels on their roofs. Roofs which might be inappropriate or which they might not own. If they already have grid power.

      Very interesting article by Carl Pope about renewables and fossil fuels up on GMT. Here’s a bit…

      “New fossil-fuel (substitute solar – Bob) electricity can reach the poor cheaply, quickly and reliably, if:

      The households or businesses have already been wired to the grid: If not, the cost of connection is the killer, not the price of electrons. For every kilometer in distance that an Indian household is from a substation, the wiring alone adds 2 cents per kilowatt-hour to the cost of power. In Kenya the cost of connecting a single family to the grid runs from $900 to $4,000.”

      http://www.greentechmedia.com/articles/read/Powering-the-Worlds-Poorer-Economies-A-Response-to-Bill-Gates-and-Jigar-S

      Buying a share of a solar farm might make sense for those who have grid access, but the majority of people who lack electricity are beyond the grid. This is where micro-solar comes into play.

      • Mint

        Yes, but that’s VERY different from net-metering incentivized solar.

        Microsolar will do wonders for those people currently without any grid access in the developing world, but they’re currently consuming only a tiny percentage of electricity, and will continue to do so even after microsolar installation.

        The people with income to pay for many kWhs per day (remember the obscene income gaps in these countries) are near the industry and commerce they work for, who in turn are the primary drivers of electricity consumption growth.

        • Bob_Wallace

          In developed countries efficiency is cutting demand.

          That’s likely to continue for some time.

          • Mint

            Sure, but your point about microsolar applies only to areas that lack grids, and outside of a few exceptions, that overwhelmingly refers to the developing world.

          • Bob_Wallace

            Did you miss – “. If they already have grid power.”?

          • Mint

            No. What makes you think I missed it?

            I was quite obviously talking about the 3/4 of your post that came after “. If they already have grid power.” You know, where your quote talked about areas outside the grid and you mentioned microsolar.

  • JamesWimberley

    Heartening,. Are there any data on the psychological payoffs: becoming an energy producer, contributing to a civic effort to tackle climate change? Even hardline conservatives should support the former.
    HRC could have fun proposing low-income solar grants in her platform, and watch the Tea Party squirm.

    • http://batman-news.com waynemasters

      A local government climate change reserve fund; collected from gas tax and other sources.
      What’s best to spend it on?
      1 LED lighting in public places or paid admission public places?
      2 Solar panel installation on government owned buildings or equal distribution subsidies to all income groups?
      3 Contracting out supplementary sidewalk snow removal of public sidewalks or installing LED solar panel crosswalks?

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