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.

  • Federal and State Tax Credits

    Tax credits are a common form of incentive program, although one that is limited in its utility to low-income households. Making tax-based incentives work for low-income consumers requires availability of a refund option or third-party financing entity that can monetize the credit. ... [read more]

  • Federal Energy Assistance Programs

    Guiding principles: Accessibility, Community Engagement, Compatibility and Integration Barriers addressed: Cost, Compatibility and Integration, Market Forces Nationwide, in the past five years federal energy assistance funding under the U.S. Department of Health and Human Services’ Low Income Home Energy Assistance Program (LIHEAP) and the U.S. Department of Energy’s Weatherization... [read more]

  • Federal Partnerships/Best Practices Sharing

    Dedicated funding from federal sources for low-income solar programs has been largely absent, but a few partnerships have formed to ensure best practices sharing between jurisdictions looking to or in the process of implementing low-income solar programs.... [read more]

  • Grants and Technical Assistance

    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.... [read more]

  • Green Banks

    Green banks are fully or partially funded state financial institutions that support affordable financing for clean energy or environmentally beneficial projects. They hold significant potential to expand access to affordable financing for low-income communities.... [read more]

  • Hawaii

    Hawaii is undergoing an aggressive energy transformation, aimed at helping the state achieve its 100 percent renewable portfolio standard by 20451. With one of the highest customer electrical rates in the country, it was critical that Hawaii take strategic steps to achieve energy democratization, to remove barriers to financing,... [read more]

  • Net Metering/Virtual Net Metering

    Net metering ensures that solar customers receive full credit on their utility bills for this valuable contribution to the utility grid. The simplicity of net metering has made it one of the most successful state policies for empowering consumers to use rooftop solar to meet their own electricity needs.... [read more]