Catalyst Fall 2016

Solar Power to All the People

As Solar Energy Surges, UCS Focuses on Spreading Its Benefits

By Pamela Worth

Earlier this year, solar power in the United States passed a significant milestone: more than a million installations across the country are now online, busily converting the sun’s power to electricity. And the number is growing quickly. Of these solar installations, the overwhelming majority—94 percent—are photovoltaic panels installed on home rooftops.

While solar was a luxury for many years, its average cost in the United States has dropped dramatically. The cost for solar panels themselves has fallen from more than $75 per watt 40 years ago to less than a dollar per watt today. From 2009 to 2016, the installed price of a typical household system fell by more than 50 percent—to somewhere between $15,000 and $30,000 in most states, and that price can drop significantly with tax credits. As the technology improves and the costs continue to fall, more Americans are choosing to go solar.

The widespread adoption of solar power and other renewable energy sources is a crucial step to forestalling the worst effects of climate change. But beyond that, the average American family has much to gain from going solar: saving on utility bills, potentially having reliable access to power during grid failures, and helping to generate clean energy that reduces toxic air pollutants from fossil fuel–burning power plants.

However, even less-expensive solar installations are still out of reach for many Americans with low and moderate incomes. Working-class families might not have the money to cover the up-front costs, good enough credit to take out a loan, or the ability to commit to a long-term lease. Renters and people living in multi-family housing face an equally daunting roadblock: it’s hard to install panels on a roof you don’t own.

“We say ‘solar for all,’ but we must include people who don’t own property,” says Paula Garcia, energy analyst at the Union of Concerned Scientists (UCS). She’s part of a team at UCS working on a long-term project to analyze which policies are most effective at promoting solar equity and providing access for all.

“There are a variety of barriers to solar because of income,” she says. “We need solar policies that specifically address the challenges low- and moderate-income people face.”

According to the Pew Research Center, a majority of American households—80 percent—earn low to moderate incomes. These households represent a massive untapped opportunity for solar if the existing ways to serve them can be scaled up locally and nationally. There are many options for improving access to cheaper, cleaner energy, but these options need to be more widely available and understood.

Innovative Financing Options

Home owners and others seeking to avoid the up-front costs (and long-term maintenance) of solar installations have several choices in some states. Solar leases allow home owners to lease solar photovoltaic panels from a provider for a flat monthly fee, without paying for their installation; home owners have the option to buy or dismantle the systems when the lease ends. Power purchase agreements are similar arrangements in which a developer will lease not only the solar installation but also the power it generates, at a fixed rate. In states where these third-party arrangements are available, they’re popular options for consumers. About 70 percent of new household systems nationally are based on these types of third-party approaches.

In some states, home owners can also take advantage of on-bill financing, wherein low-interest financing covers the up-front costs. The consumer immediately begins saving money on electric bills, and a portion of those savings are dedicated to repaying the loan. For those with poor or insubstantial credit history, on-time bill payment serves as a proxy for credit.

These options could easily be expanded across the United States if not for frequent regulatory battles in state legislatures. Regulations on third-party solar companies are necessary to protect people from unscrupulous lenders, but some of these fights appear to fit a nationwide pattern of political stalling on renewable energy, when fairer and more flexible financing options could help speed the spread of solar to all.

Community Solar

For those who live in multi-family units, in homes whose rooftops don’t get enough sun, or who rent instead of own their homes, community solar arrangements can provide access to solar energy. Community solar allows consumers to pool their resources and buy or lease a portion of a shared solar array, or buy a piece of its output. Their share of the electricity generated by the project is then credited to their electricity bill.

States, municipalities, project developers, and utilities can expand access to community solar for low- and moderate-income families by situating the systems in underserved communities, providing training for jobs in renewable energy, and “carving out” a budget for these installations from money allocated to existing renewable energy policies. They can also require portions of shared solar projects to serve lower-income households, as Colorado has done, for example.

Expanding Existing Programs

Some federal, state, and local programs already subsidize the cost of solar installations, and provide incentives for consumers to use renewable energy. A federal policy currently offers a 30 percent tax credit on the total cost of a solar installation, for example. And most states and utilities allow solar users who generate more electricity than they consume to get credit for the excess, a practice known as net metering.

Federal, state, and local programs that already help cover the costs of energy efficiency upgrades for low- and moderate-income Americans could be expanded to also subsidize solar. One thriving statewide program along these lines is California’s Single-family Affordable Solar Homes (SASH) program, which subsidizes solar installations via customer contributions, private financing, state cap-and-trade funding, and federal renewable energy tax incentives. (For an in-depth look at how some California families are benefiting from solar power, see below.)

This past summer, the Obama administration announced a new cross-agency initiative intended to increase access to solar energy: Clean Energy Savings for All intends to bring one gigawatt of solar—equivalent to some 200,000 typical household systems—to low- and moderate-income communities by 2020 through a combination of better financing, financial incentives for cities and towns to install solar arrays, and a job training network for those interested in working in the emerging solar sector. While the plan will take time to implement, Garcia says that the administration’s commitment to spreading solar serves as “a top-down message that can help communities move forward.”

Barriers to Solar Access

Many of the right ingredients are in place to expand access to solar energy: improved technology, reduced costs, the desire to reduce energy bills and minimize environmental impact, and evidence that solar power can be comfortably scaled up to cover the millions of Americans who would benefit.

Some of the biggest barriers appear to be political. Some politicians who receive money from fossil fuel interests and utilities aren’t willing to back policies promoting renewable energy. Some even claim it’s unfair to subsidize renewable energy, despite the fact that federal and state governments have subsidized fossil fuel production for decades—at the expense of our health and environment. 

The fossil fuel industry also funds lobbying groups that seek to de-prioritize expanded access to solar energy, often by misleading voters. One particularly effective strategy for some groups has been to play on constituents’ fears of a wealthy elite that decides to “go off the grid,” forcing those who can’t afford their own solar panels to pay more for their power. These worries are understandable: movements supporting renewable energy—and the environmental movement as a whole—have a history of not including underserved communities. It’s time to do better, Garcia says.

“Ensuring that people living in low- and moderate-income communities are active participants in a national transition to clean energy is the only way to achieve the progress we need on climate change,” she says.

With that in mind, UCS will seize every viable opportunity to promote broader access to solar and other renewables, for everyone in the United States. For her part, Garcia is passionate about spreading the benefits of solar to all.

“This is why I work in renewable energy,” she says.

Saving Money—and Changing Lives

by Derrick Z. Jackson

A team from GRID Alternatives helps install solar panels for Myra Wilson, a retiree on a fixed income.

In the Webster neighborhood of San Diego, a team from GRID Alternatives helps install solar panels for Myra Wilson, a retiree on a fixed income.
Photo: Derrick Z. Jackson

Since 2009, California nonprofit GRID Alternatives has been helping to bring rooftop solar to low- and moderate-income communities at little or no cost, with financing drawn from state funds, foundations, and donations from the solar industry. As of this writing, GRID has overseen 6,000 installations, including nearly half of the 192 homes in the predominantly African American neighborhood of Broadway Heights in San Diego, and 35 of 42 homes in the Hmong and Latino neighborhood of Little Long Cheng in Fresno. Former Boston Globe reporter, Pulitzer Prize finalist, and UCS Fellow Derrick Z. Jackson spoke with residents about the impact solar has had.

For most residents of Broadway Heights, it was out of the question to lay out $20,000 or $30,000 in cash up front for solar panels, or try a long-term lease with a typical for-profit solar company. When GRID Alternatives came along with flyers promising solar at no out-of-pocket cost, Willie Williams, a retired construction worker, first thought, “This is one of the greatest cons that ever came to Southern California.”

Today, with negligible electric bills, Williams said, “I think it’s the best thing that’s happened to me since free Pepsi in college.”

Further north in Little Long Cheng, Ivan and Lana Lopez were equally skeptical about GRID’s proposal. “I saw their flyer and I thought for sure it was a scammer, since nothing’s for free, and all kinds of groups come into communities of color like ours and survey us to death and promise things to us that never happen,” said Ivan, 50, a fifth-grade teacher and a local leader of efforts to bridge cultural understanding between Latino and Hmong families.

“Right away I called the Better Business Bureau. When we were convinced, we went around the neighborhood telling everyone, ‘You gotta jump on this.’”

Jump they did. Frugal with electric use from the start, the Lopez family initially had bills of $80 to $100 a month. Today the bills run $15 to $20.

“Just because people here don’t have all the resources of a wealthy suburb doesn’t mean our desire is any less to be green,” Ivan Lopez said. Lana jumped in to add, “I’d say solar is part of getting us back to the old ways of living the way we were meant to live, ways where nothing was wasted. Solar is part of that journey back.”

Ezekiel Morales, 56, needed the savings of solar at the time of this interview because he was between jobs in the Central Valley’s agricultural fields. Through a translator, he said the electric bill for his family of six had gone from $2,100 a year to $200. Henry Alvarado, a 50-year-old handyman, and wife Rosemary, a 49-year-old school bus driver, said cutting their bill from $150 a month to $20 helped them buy a car. “That little extra means a lot to us,” Rosemary said.

Back in Broadway Heights, Robert Robinson and Willie Williams said the first reason they bought into solar was not to go green, but to save greenbacks. Now that that’s happened, they’re talking about having the neighborhood declared an “eco district.”

“We’re ready to get into the weeds of the whole environment,” Robinson said.