Guiding principles: Accessibility and Affordability, Community Engagement, Compatibility and Integration
Barriers addressed: Cost, Market Forces
Grants can be used to both directly fund projects developed for the benefit of low-income customers, and provide technical assistance to community-based organizations looking to support solar development, particularly in communities of color, environmental justice communities, and low-income communities.
One source of direct grant funding for projects that already exists nationally is the Community Development Block Grant (CDBG) program, one of the longest-running programs of the U.S. Department of Housing and Urban Development (HUD). CDBG “is a flexible program that provides communities with resources to address a wide range of unique community development needs.” HUD has authorized the use of CDBG funding for energy projects, and many cities are already using it for solar.
Investing in community organizations can also facilitate solar projects. Community organizations are often well-situated to support the development of solar in their communities given their relationships, community expertise, and history of doing economic and social development work. However, they tend to be resource-constrained and tasked with tackling a range of issues to meet community needs. Grants and technical assistance can help community-based organizations engage with solar installers, policymakers, and planners; do outreach to support solar adoption; help with project development such as siting, program management software, permitting and other ‘soft cost’ reduction, and resources to support communication efforts with low‐income customers.
Examples of grant programs that can build capacity for community-based organizations to support low-income solar projects include:
- U.S. Department of Energy (DOE) Sunshot Initiative Solar Market Pathways Cooperative Grants. In 2015, DOE awarded Cook County, Illinois with a $1.2 million cooperative grant to support community-based organizations, environmental organizations, solar developers, Cook County, and other stakeholders in their development of a community shared solar program, among other solar market pathways. The grant provides funding for participants to do feasibility studies, identify economic models, create a marketplace, and pilot five to seven projects.
- New York City Worker Owned Cooperative Development Initiative. As low-income communities seek to find viable and wealth-building solutions in the energy economy, many communities are exploring the role of cooperative developments as a way to boost ownership and participation. Worker-owned cooperatives like the Energy Solidarity Cooperative in the San Francisco Bay Area and the Pacific Electric Worker-Owned Coop in Los Angeles are two examples of worker-owned cooperative efforts that are investing in low-income and community of color solar projects. These types of efforts can be a key opportunity for low-income solar engagement and can blossom with the right types of grant support. One example of such funding is the New York City (NYC) Worker Owned Cooperative Development Initiative. In FY 2015, NYC allocated $1.2 million to invest in the development of worker-owned cooperatives. The funding was dedicated to technical assistance efforts to new and current worker-owned cooperatives through legal support, business planning, and start-up seed capital for newly developing cooperatives. While general, it could provide seed money for solar cooperatives in the city.
- Colorado Energy Office (CEO) Low-income Community Shared Solar Demonstration Project. In 2015, the CEO launched a low-income community solar demonstration project designed to demonstrate the viability of community solar models that serve low-income households. GRID Alternatives received a $1.2 million grant in August 2015 to develop and implement a portfolio of projects. For more on this see the community shared solar models section.
- Florida Solar and Energy Loan Fund (SELF). A nonprofit lending institution created by St. Lucie County in 2010, SELF provides low-cost loans to small businesses and residents with credit scores as low as 500 for energy-saving improvements such as efficiency and solar. To give low-income residents an affordable way to achieve energy and financial savings, SELF created the Clean Energy Loan Program, providing assistance throughout the home energy upgrade process. The fund was initially created with seed money from state and federal grants, and has offered about 300 loans to date with interest rates as low as six percent and terms as long as 15 years. Participants see average energy savings of 22 percent.