TODAY’S STUDY: Delivering Solar To Everybody
Community Solar Opportunities for Low to Moderate Income Households in the Southeast
Anne Tazewell and Achyut Shrestha, April 2018 (North Carolina Clean Energy Technology Center)
Community solar projects are typically ground-mounted photovoltaic (PV) systems that are often smaller in size than other utility-scale solar projects. These projects can offer an opportunity for those who rent their homes or have shaded roofs to take advantage of solar energy, as many of the siting requirements associated with rooftop solar installations are removed.
The Southeast has some of the highest rates of poverty in the U.S, while two states in the region also rank among the top states for installed utility scale projects.1,2 This example highlights both the challenges and opportunities for community solar across the region. Electric cooperatives and municipal utilities are uniquely positioned to lead the way in providing low-income residents with access to community solar. Within the nine states covered by the Community Solar for the Southeast project, there are 472 electric cooperatives and municipal utilities, with over 50 community solar projects in place or under consideration. However, we are not aware of any projects specifically serving low-income households (defining low-income as those with incomes below 80% of area median income).
For community solar projects serving underrepresented, low-income residents, subscription costs and associated benefits are of significant importance. In order to enable low-income participation, these projects should offer an immediate savings on monthly electricity bills. To reduce upfront costs in order to support low-income community solar access, the following can be considered:
1. Solar developers and utilities may voluntarily agree to lower power purchase agreement rates3 in order to reduce community solar participation costs for low-income residents.
2. The utility can elect to credit customers for the output of the community solar project at the retail rate or the value of solar, a rate that can include demand charges and other considerations, rather than an avoided cost rate, to generate more immediate savings for subscribers
3. A two-tiered subscription structure, whereby participants voluntarily agree to pay more for community solar shares, may be utilized to offset costs for lower income participants.
4. Voluntary contributions, where utility customers donate monthly through bill roundup programs or other utility lead charitable giving opportunities that help reduce electric bills for customers in need, can be expanded to include reductions for community solar subscriptions.
5. Utility shut off funds and federal assistance programs, such as housing and low-income home energy assistance programs, can be examined for opportunities to provide financial support for community solar for low-income households.
6. Electric cooperatives and municipal utilities can consider group bids, developing larger solar projects, and donating project land to reduce costs.
7. Access to inexpensive capital to pay for the construction and set up of a community solar project, as well as a willingness on the parts of both the developer and the utility to have a lower internal rate of return, can support lower cost solar access for low-income households.
8. Leveraging additional value streams from battery storage systems can be considered to make the project more cost effective.
A community solar program that is “purpose built” to include a percentage of low income residents may be more successful in attaining low income household participation than projects already underway. There are more options to explore to reduce the upfront costs to facilitate the involvement of community members with limited means. However, no matter at what part of the community solar program process, there are advantages in bringing together utilities and energy related government programs and initiatives with low income advocates and environmental nonprofits. Each entity has a unique perspective and expertise that, upon collaboration, can enhance the potential for community solar to serve a broader economic and environmental justice movement…
Community solar development in the Southeast is in a nascent stage due to many challenges outlined in this document. This is especially true when considering the inclusion of low-income individuals and households in community solar programs. However, as discussed, there are pathways for implementation that interested utilities, advocates, and solar developers can consider to provide opportunities for low-income families to access solar energy and its benefits.
The Community Solar for the Southeast project, through subsequent meetings, is working with attendees of the December 2017 Low-Income Community Solar Workshop to put into practice some of the opportunities discussed at the meeting and in this report. One result will be to reach out to and serve low-income member-owners of one electric cooperative with reduced monthly utility bills through a community solar subscription initiative to be launched in late April 2018.