Many low-income neighborhoods have not joined the solar power revolution because of the perceived high initial cost of solar. These are the very areas that could most benefit from lowered utility bills. That could be changing, however, as companies and states are offering programs designed to assist these neighborhoods in getting affordable solar power.
Developers Partner With Residents for Affordable Solar Power
In the Baltimore Sharp-Leadenhall neighborhood, developers of a new $250 million mixed-use building are working with residents to bring affordable solar power to housing units in the area. A local church is advocating for the solar projects, and is looking to possibly add its own solar or geothermal system to help offset its power costs. Savings would be used for literacy, voter registration, and other programs.
“It is going to take leadership, creativity and capital, and a policy environment that is conducive to seeing the low-income segment grow solar,” said David Arfin, founder and CEO of First Energy Finance and an adviser for Everyday Energy. “There are real business prospects. It would be damaging if solar were viewed as only for the middle and higher income households.”
Arfin developed the leasing program for SolarCity, the San Mateo, CA-based photovoltaic solar panel leasing and installation company that jump-started the residential solar industry by making the technology affordable for millions of customers by eliminating the upfront capital costs. He says, “I think [low-income] requires focus and specialization because the need for those customers in purchasing decisions and process and who they trust working with is different than other market segments,” he said.
Skyline Innovations has been deploying solar water heating systems since 2009 and recently also jumped into solar electricity, by mainly focusing on affordable, medium-sized multifamily buildings. Based in Washington, DC, the company has expanded into California, Florida, Delaware, Hawaii, Maryland and Puerto Rico with eyes on Arizona as well.
The company fully finances, designs and installs the solar technology on buildings and sells back the energy to the owner at a price that is a fixed percentage lower than their conventional utility rate, which guarantees savings. “It is a building improvement you can do without having to dig really deep into your pockets,” says David Hoedeman, head of business development at Skyline. “You can do solar with Skyline and still have capital to put a new roof on or whatever else you are dealing with.”
Virtual Net Metering
Everyday Energy has become a leader in solar installation for multifamily housing units and was the first to make “virtual net metering” work with utilities. Virtual net metering allows solar panels to feed electricity to the grid without being connected into every apartment’s meter that gets the credit. Instead there are only a few meters that the utility tracks for which the solar leasing company has provided a list of what customers earn credits to count toward their electricity bills.
Virtual net metering has become the cornerstone for “community solar,” which has opened opportunities in renewable energy for those stuck in the shade or with a roof that can’t support solar panels. It is important to pair renewable energy with energy efficiency, and every installation also comes with energy efficiency improvements like caulking and insulation to ensure maximum benefits.
Skyline Innovations, Everyday Energy, Grid Alternatives and other advocates would like to see other states set aside funding for low-income renewable energy programs, although they say providing renewable energy for affordable housing is still workable without the incentives, as demonstrated in their projects in Colorado and Washington, DC.
FirstEnergy Finance’s Arfin said the market would also be well-served if bank regulators required a certain amount of clean energy loans or if leasing were based on more than just credit scores, including how long a person has been in the house or if they pay bills on time, he said.
It is surprising, Arfin said, “how little structuring creativity there has been to work through the issues of solar and low income areas.” It is still early in the adoption cycle, and “I think there is a lot of kinds of business innovation that can happen,” he added.