Approximately 75 percent of individuals across the country do not have access to solar energy solutions, whether because they don’t have suitable roof space, don’t own their home, or face certain financial barriers to going solar. These barriers are even more acute for low-income customers. Community solar programs, sometimes known as ‘shared solar’ or ‘solar gardens,’ can help address both the physical and financial barriers of going solar. Community solar allows individual subscribers to directly benefit from a solar installation sited elsewhere in the community, eliminating the need for roof space. Subscribers receive a credit on their utility bill for the clean energy produced by the system using the Virtual Net Energy Metering mechanism, and can save money each month on their electricity bills.
Community solar programs are being increasingly adopted by states and forward-looking utilities that want to connect more consumers with clean energy. Today at least 20 states and the District of Columbia have some form of statewide community shared solar policy in place, although their policy structures and resulting market impact varies widely.
State community solar policies should achieve the following principles, which are critical for serving the general and low-income markets alike Community solar programs should expand access to a broader group of energy consumers than current solar policies and markets allow.
- Participants should receive a bill credit that clearly and properly compensates them for the long-term value of the clean energy produced.
- Community solar policies should be flexible enough to allow for a variety of ownership and contract models to meet different consumers’ preferences and financial standing, such as an upfront payment model, a leasing agreement, and cooperative or community ownership.
- Community solar policies should be additive to existing renewable energy programs, not undermine them.
Successful Low-Income Strategies
While community solar is a promising tool for expanding solar access, it does not automatically create or ensure low-income participation. Almost all of the same barriers to entry–particularly financing, education and outreach, and market forces–exist for community solar as for rooftop solar.
Experience has shown that a targeted policy and programmatic focus on serving low-income consumers is necessary to successfully expand community solar’s reach to low-income communities at scale. At least 14 states have included low-income provisions in their community solar programs. States have taken various approaches to date, including:
- Carveouts: A carveout designates a certain amount of program or project capacity to LMI customers. Project carveouts have been included under community solar programs in initial years of Colorado and New York Phase 1, which mandate that a certain percentage of all community solar projects be dedicated to low-income, and for utility-led facilities in Hawaii. Program carveouts have been included in Maryland and Oregon, which mandate a certain percentage of overall program dedicated to low-income customers
- Incentives: Incentives and adders have been used to incentivize low-income participation in states like Illinois and Massachusetts
- Programs: Programs have been designed specifically for low-income community solar, towards the goal of low-income participation and benefit. Colorado Energy Office deployed a dedicated low-income community solar program aimed at reducing low-income energy burden, California’s Community Services Department and New York (NYSERDA) has developed a program under which the state entity serves as an intermediary purchaser of community solar and allocates capacity to low-income customers through electric bill assistance offerings.
Lessons learned suggest that a combination of these approaches can ensure that LMI customers have robust options for participation in community solar regardless of income level or housing type. While some customers may require an “assistance” model that is structured similarly to existing energy assistance programs (requiring no up front payment, providing deep bill savings), others can participate through more market-based offerings which leverage appropriately structured incentives or financing.
Click here for a summary of state approaches to low-income community solar by program, carveout, and incentive (PDF.)
Policy guidelines & resources:
Click here to download in-depth low-income community solar policy guidelines and sample bill language.
For a brief overview of opportunities, challenges, and statewide best practices for low-income community solar programs, click here.
Click here for the 2018 Community Solar Vision Study, which includes specific policy and market based solutions to improve the community solar offering for low-to-moderate income households.
Click here for National Renewable Energy Laboratory (NREL)’s 2018 report, Design and Implementation of Community Solar Programs for Low- and Moderate-Income Customers. NREL’s Community Solar 101 overview also has information on LMI community solar, available here.
Additional resources include the Coalition for Community Solar Access (CCSA)’s Community Solar Policy Decision Matrix, IREC’s Shared Renewable Energy for LMI Customers report, Southern Environmental Law Center’s brief, and NREL’s Focusing the Sun: State Considerations for Designing Community Solar Policy):