Financing

In the past decade, adoption of solar by residential customers has grown tremendously, fueled in part by innovations in financial offerings.  The advent of financing mechanisms like leasing or power purchase agreement (PPA) relationships allow homeowners to install solar with little or no upfront costs and accounted for a large share of residential solar growth in that timeframe. Consumer loans are another increasingly popular way to finance residential solar. However, the ability to participate in these models generally requires a credit score or debt-to-income ratio minimum that can be a barrier to low-income households who generally have lower credit scores. Low-income families are also often unable to take advantage of the largest public incentive to making solar affordable, the federal investment tax credit (ITC).

The policy tools listed here provide options to expand access to financial solutions for low-income families to access solar.  For additional reading, visit Vote Solar’s Inclusive Solar Finance Framework, a report that evaluates barriers to financial products that can support solar adoption and identifies potential solutions.

  • Best Practices for Utility Ownership

    Solar power is a cost-competitive, mainstream renewable energy resource that should be available to everyone, regardless of their income level or housing type. Yet America’s nearly 50 million low-income households, who spend more on their energy needs as a percentage of income than their wealthier peers, are often unable... [read more]

  • Community Development Institutions

    Community Development Financial Institutions and Community Development Entities are mission-driven financial institutions, corporations, or partnerships that serve and empower economically distressed communities. Whether providing direct investment dollars or credit enhancements, they can play a critical role in solar development. ... [read more]

  • Community Purchase Programs

    Guiding principles: Accessibility and Affordability, Community Engagement Barriers addressed: Cost, Market Forces, Education and Outreach Also called “Solarize” programs, Community Purchase Programs help multiple homeowners go solar together, making the process easier and more affordable. Typically a third-party administrator (often a nonprofit organization or public agency) helps homeowners pool... [read more]

  • Community Shared Solar

    Shared solar programs – sometimes known as ‘community solar’ or ‘solar gardens’ – help address the physical barriers of going solar for those who do not own their home or a suitable roof. These programs allow any energy customer to subscribe or otherwise participate in a solar energy project... [read more]

  • Consumer Protection

    Consumer protections should be at the forefront of low-income solar programs, especially if they include customer finance. Key protections include... [read more]

  • Enabling Long-term Funding

    Guiding principles: Accessibility and Affordability, Sustainability and Flexibility, Consumer Protection Barriers addressed: Cost, Market Forces Low-income access to solar is scalable when long-term funding is allocated through statute and/or regulations, often as part of a broader program, allowing the market to develop sustainably over time. Typically, successful and scalable... [read more]

  • Enabling Statute Examples

    Guiding principles: Accessibility and Affordability, Compatibility and Integration, Sustainability and Flexibility, Consumer Protection Barriers addressed: Cost, Physical Barriers and Home Ownership Status, Market Forces Successful low-income solar policies and programs across the country (e.g. CA, CO, CT, DC) to date have a few things in common: They are long-term... [read more]