Solar Expanding in Middle and Low Income Communities

March 22, 2016 By Carl Weinschenk

Solar panelsThe use of solar energy is growing in low and middle income communities. Creative financing has a lot to deal with causing — and extending — this trend. In low income communities, solar is given an extra push because it creates local jobs.

GreenBiz cites research from Kevala Analytics on the broadening of solar. The firm found that last year just 6 percent of solar installations were in neighborhoods with median incomes of more than $100,000. The largest segment – 65 percent – was deployed in areas with median incomes of $70,000 or less. The story says that the change is being encouraged by regulators:

In California, Massachusetts, New York, Colorado, the District of Columbia, Maryland and some other places, policies that extend the reach of solar to renters and residents without rooftops are widening the market for individual and community installations alike. Financing mechanisms prevalent in some markets but not in others have also made it possible for people to opt for solar without requiring they have money for big upfront costs.

This all is good news to the solar sector — and something to which vendors, energy managers and others in the energy sector should pay attention. Solar, which once was largely limited to high income neighborhoods, is finding its footing in other areas for several reasons beyond the popularity of its environmental benefits. The government is building on that through net metering and other inducements. Separately, the cost of solar equipment is coming down.

In low income areas, there is a big added bonus: Solar energy creates good local jobs. “The dynamic nationally is that the issue of low income solar is prominent in nearly every single solar construction happening in the country,” said Stan Greschner, the Vice President for Government Regulation and Market Development for Grid Alternatives. “Solar has matured well beyond the early adopted phase from a decade ago. States, utilities and lawmakers are looking at how to reach the segments that are under-represented currently.”

The organization – along with Vote Solar and the Center for Social Inclusion – released the Low-Income Solar Policy Guide last week. The guide is aimed at policymakers and community leaders – but certainly can be useful for builders and the financial community. Greschner said that the guide is meant to provide comprehensive information on all low income solar projects being implemented across the country.

Greschner said that financing structures work in different circumstances and regions. “Financing is one of the big issues in any of these conversations,” he said. “I think there are a lot of different types of financing that have been identified through this research, including solar incentives and higher value solar renewable energy credits for low income families. There are creative on-bill financing loans that for example, New York has piloted. In the affordable housing space there are some innovations around power purchase agreements and lease options for housing owners as well.”

Real estate, financing and – in the case of multifamily homes – building managers should recognize that solar power is a more than a way to provide heat and light. Since it is part of the users’ home, being involved in its creating is empowering. This means, for Grid Alternatives, that job training and other initiatives aimed at bringing local residents into the business are a priority.

Financing options seem to be growing. Yesterday at Clean Technica, Tina Casey wrote about Re-volv, which she calls a “unique financing approach” aimed at co-ops and non-profits.

The idea, she writes, is “so simple it hurts”: Local college students are recruited to raise money. The money goes into a Solar Seed Fund, which is used to provide the upfront costs of the project. The tax breaks that installation gets goes to the people donating the money. The installation gets 20-year lease that provides lower electricity bills. The savings, the story says, can be more than 15 percent.

Solar Industry reported last week that Re-Volv has launched a Web-based crowdfunding platform. Its first use will be in the Serenity House in Philadelphia, Riverwest Co-op Grocery & Café in Milwaukee and Isla Vista Food Cooperative in Santa Barbara, CA.

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