SolarForAll InlineDoc 061716 Final

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1 SOLAR FOR ALL WHAT UTILITIES CAN DO RIGHT NOW TO BRING SOLAR WITHIN REACH FOR EVERYDAY FOLKS When customers invest in solar, everyone benefits: locally generated solar power helps us all avoid paying for new, costly power plants and transmission line upgrades. Also, local solar means less power that utilities have to provide during hot, sunny days when electricity is most expensive to generate. And when utilities run their plants fewer hours, this produces less environmental harm and pollution. Solar power also puts boots on the roof in our communities, creating good-paying, local jobs that can’t be outsourced. Jobs in the solar industry—which employs an increasingly diverse workforce of minorities, women, and veterans—pay $20 to 1 $60 per hour on average. When homes and businesses invest in solar, they are able to stabilize their energy bills and protect against future increases in utility rates, saving money over the life of the solar system, which can be 25 years or more. Low-to-moderate income (LMI) households in the South spend a higher percentage of household income on 2 energy expenses than higher income families and thus have the most to gain from affordable clean energy. However, even as solar energy technologies decline in price, many LMI families are still unable to benefit from solar technology due to existing barriers, including the high upfront costs of installation, lack of access to financing options, low credit scores, inability to harness federal and/or state tax incentives, lack of home ownership, and residence in multifamily housing with no control of roof space. As a result, rooftop solar in - stallations can be found in affluent neighborhoods but often remain beyond economic reach for many LMI households. This income disparity in solar adoption has recently captured the attention of the Obama Administration. 3 In July 2015, the White House launched an initiative to increase solar access for all Americans. Additionally, the Environmental Protection Agency released the Clean Power Plan (CPP) in August 2015, requiring states to develop and submit individual compliance plans for reducing carbon emissions. Because solar energy emits zero carbon emissions while generating reliable electricity, increasing solar energy deployment can help states 4 Furthermore, the best practices outlined in this policy reduce their emissions in compliance with the CPP. brief can help ensure that solar programs adopted to comply with the CPP are benefiting the customers—and communities—that have historically been the most impacted by fossil pollution.

2 to still benefit from the savings of rooftop solar by - In light of this national attention to solar, we en courage utilities to implement these best practices to entering into a financing arrangement with their utility (via on-bill financing) or with a solar installer (through ensure solar access for all customers. By leveraging a solar lease or power purchase agreement). Financing the precipitous declines in solar costs and innovative solar panels allows homeowners to avoid large upfront program design, utilities can ensure that all customers, regardless of income and ability to install solar genera - installation costs for a solar system and spreads out the tion, can now benefit from solar power. We encourage costs through monthly payments. utilities to adopt the following best practices to ensure - A solar lease or PPA is a contract in which a home that solar is available to any household that wants it: owner pays for solar panels owned by a provider diverse financing options, community solar programs, through a monthly contract, thereby reducing or elimi - and programs leveraging existing low-income and nating upfront costs to the homeowner. These arrange - rural energy assistance funding. ments can be third-party sponsored, utility-sponsored, In designing programs that expand access to all - or some combination of both, and typically last any where between 15 to 25 years. Since the monthly cost customers, utilities should keep the following guide - of the arrangement is set at the outset, the homeowner lines in mind. First, to be effective, programs should guarantee immediate economic savings for LMI par is better insulated from future increases in energy rates. - At the end of the contract, homeowners may have the ticipants, allowing families to save more than they pay choice to renew the contract, purchase the system, in year one. Additionally, programs should focus on 5 community development not only through access to If the homeowner or have the equipment removed. moves, he can transfer the contract to the new home solar but also with energy conservation and education, - owner. In states where these solar financing options are workforce development, local hiring, and siting of - projects in disadvantaged and underserved communi available, rooftop solar installations are currently on ties where appropriate. the rise among middle class households with incomes 6 ranging from $40,000 to $90,000. 1. Support diverse financing options Some utilities are relying on outdated monopoly laws to argue against customers’ right to enter into that make solar affordable solar financing contracts with independent solar In the same way that LMI customers are able to companies. Instead, we encourage utilities to work finance the purchase or lease of a car or home, these with solar advocates to clarify that the South is open customers should have a range of options for financing for solar financing options that give customers more cost-effective clean energy investments. These com - energy choices. For example, Georgia Power recently mon sense financing tools have been shown to expand supported a new law, the Solar Power Free-Market access to solar. Financing options allow LMI custom - Financing Act, which clarifies the legality of a range of ers who can’t afford to purchase a solar system outright 7 solar financing options for Georgians. Unfortunately, some solar leasing compa - nies require high credit scores, so customers with low credit scores may not be able to take advantage of certain third party leasing op - tions. Another way for utilities to make solar accessible to LMI customers is through on-bill 8 (OBF) refers to financing. On-bill financing programs that give customers the ability to finance energy efficiency and clean energy improvements made to their homes at no upfront cost. OBF allows customers to pay for the efficiency measures over extended terms on their monthly utility bills, and the savings from efficiency improvements typically exceed the monthly cost, which allows customers to save both energy and money from day one. OBF eligibility can be determined using utility bill payment history instead of or to comple - ment a full credit report, allowing customers with lower credit scores to access financing. 2

3 13 OBF programs increase access to clean energy and for credits on their energy bills. The participants will energy-saving technologies for those with lower credit not have to pay any of the costs associated with the scores and those who cannot afford the upfront costs, panels, including upfront costs or maintenance costs, namely LMI customers, renters, and residents of since CPS will own the panels. Working under a power 9 multifamily properties. Utilities that offer OBF should purchase agreement with CPS Energy, Powerfin will collaborate with stakeholders to standardize a program install and operate ten megawatts of rooftop solar on to reduce costs and improve quality. homes and businesses throughout the CPS Energy ser - vice territory in San Antonio and retire the panels after For example, South Carolina recently launched a 20 years. During that period, customers will receive - pilot program, the “Help My House” Rural Energy Sav between 20% and 30% of the energy that their solar ings Program, spearheaded by Central Electric Power 14 panels produce. Cooperative (Central) and The Electric Cooperatives of South Carolina (ECSC). This pilot was designed to finance home efficien - cy upgrades through 10-year, 2.5% interest loans, which can be passed on to the next owner or tenant if the home is sold. The program provides on-bill financing for energy efficiency measures in 125 homes, and analyzes the financial impacts on the electric system shared by South Carolina’s 20 co-ops. ECSC reported in 2013 that the average participant in its energy-effi - ciency pilot program saved $288 a year and $8,500 over the 15-year life of the improvements—after considering the 10 Central typical retrofit cost of $7,684. and ECSC helped form a non-profit, KW Savings, to administer loan funds obtained from the U.S. Department of Agriculture’s Rural Economic Devel - 11 - opment Loan and Grant Program (REDLG). This Likewise, Pacific Gas and Electric (PG&E) in con junction with Habitat for Humanity, developed Solar - successful model could be broadened to benefit a larg er group of customers, and also expanded to include Habitat, a program that installs solar panels for free on the rooftops of every newly built Habitat home in other cost effective technologies such as solar energy. Northern and Central California. PG&E covers the full - Similarly, Seattle City Lights’ Community Pow costs of the installations. PG&E’s capital to fund the er Works Program partners their utility with a local program, which it writes off as a charitable gift, comes non-profit community lender to provide a Craft3 from profits that would otherwise go to the utility’s On-Bill Home Energy Efficiency Loan to eligible cus - 15 shareholders. Over the last ten years, Solar Habitat tomers. The program offers loans for terms of up to 20 has been a success for PG&E, which “delivers some years with a 4.49% interest rate (3.49% for households 16 Since 2005, the of the cleanest energy in the nation.” earning up to 80% of the Area Median Income). Cus - program has helped build and install solar panels on tomers with credit scores as low as 590 may qualify for 17 nearly 600 homes. the loans. Loan payments are included on Seattle City 12 Lights customers’ monthly utility bills. 2. Invest in Community Solar Other utilities are even developing creative ways to For those who can’t install solar at their homes, provide solar at zero cost to customers. For example, Community Solar programs offered by utilities can CPS Energy in San Antonio has collaborated with give us all the opportunity to “go solar” by investing in Powerfin Partners, a third-party solar developer, to a piece of a solar project in our community and getting create a pilot program that will allow the utility to rent credit for that investment on our monthly utility bills. customers’ rooftops for solar installations. The Solar - In addition to decreasing the cost of installing a solar Host program will allow participating utility custom - system, Community Solar projects also expand access ers to host PV systems on their rooftops— to renters, those in multifamily housing, and home - i.e. “rent” their rooftops to CPS Energy—in exchange 3

4 owners whose rooftops are not suitable for solar pan offsetting the cost of participation on customers’ utility - bills. On-bill programs should base qualification and els. Community Solar projects, which can be utility- sponsored or third party-sponsored, offer customers participation on an individual’s utility bill payment the option to buy into a larger solar power system that history, not their credit score or history. is located in their community. To ensure broad access Reserve siting for underserved communities to Community Solar, utilities should consider the Utilities should reserve between 25% and 50% of their following recommendations: Community Solar projects for siting in underserved Create a carve-out communities, with community input. For example, - For programs that only allow a certain number of cus in California, one sixth of community solar projects are reserved for siting in disadvantaged communities. tomers to enroll, utilities should consider a carve-out Utilities should also consider siting at landfills and for low-to-moderate income customers, with addi - other brownfields sites. tional incentives as needed to drive participation. This could be funded by a small contribution from non- Incorporate job training LMI subscribers or via another independent funding Solar power can bring good-paying installation jobs to source. Utilities should reserve a certain percentage of under-employed communities. Utilities offering solar subscriptions from each Community Solar project for programs should partner with organizations that spe - LMI individuals and families in that community. cialize in expanding job opportunities for low income - communities. For example, Grid Al ternatives, a non-profit that installs solar for LMI customers, partners with nearly 70 local job training organizations to provide a classroom in the field, giving participants the 18 experience they need to get jobs. Take advantage of additional savings opportunities Utilities may be able to pass on additional savings to customers by incorporating other program ele - ments that offer customers products or services that benefit the utility. For instance, the Steele-Waseca Electric Cooperative in Minnesota offers customers who participate in - a demand-response program a dis count on community solar. Custom - ers who want to own a community solar panel and add a new electric water heater to their Avoid upfront costs homes can have both for just $170. The individual Customers should be given the option to pay enroll - panels are priced at $1,225 after the initial $170 offer. ment and subscription fees over time rather than 19 The $170 offer is limited to one panel per customer. in a one time, upfront payment. These subscription See SELC’s Community Solar: Best Practices for Utilities fees can be quite expensive for an LMI individual 20 in the South for further discussion. and family and are one of the largest hurdles to their participation. Utilities should consider partnering with Community-Based Organizations (CBOs) to actively 3. Leverage existing funding to expand pursue third-party funding sources to help reduce or access to solar fully pay down these subscription costs. To further ensure that solar power is available to any household that wants it, utilities can leverage existing Allow on bill financing federal, state, and local energy assistance funding. Utilities should let customers pay as they save on their These funds present an opportunity for utilities to pro - - utility bills. Additionally, utilities should allow sub vide their LMI customers with clean, renewable energy scribers to couple Community Solar enrollment with to assist families with energy costs and improve energy on-site energy efficiency retrofits, with overall savings 4

5 efficiency of their homes. Leveraging these programs In addition to federal funding programs, other state to expand access to solar is a win-win because it and local energy assistance funding programs can be will provide financial benefits to participating LMI used to advance solar equity for LMI customers. One customers, allow utilities to ensure low electric bills - easy way to tap into state and local programs is to cou for those who most need bill relief, and expand clean ple solar offerings with existing energy efficiency pro - grams. For example, PosiGen, a provider of residential energy investments in local communities. renewable energy and energy efficiency solutions, has Federal programs targeting rural customers - piloted a successful affordable leasing program in Lou include USDA’s Rural Utilities Service Loan (RUS) isiana that serves LMI families. According to PosiGen, Energy Efficiency and Conservation Loan Program offering solar and energy efficiency together saves its (EECLP), Single Family Housing Guaranteed Loan customers 40 to 80 percent more than a typical so - Program, and the Rural Development Multi-Family lar power purchase agreement, which typically saves Housing Energy Efficiency Initiative. Other feder - customers $10-20/month. PosiGen offers solar leases al programs include the Department of Energy’s that do not require credit checks, and that guarantee a - Low-income Home Energy Assistance Program (LI certain percentage of energy savings for participating HEAP) and Low-income Weatherization Assistance 27 PosiGen’s average customer nets about households. Program (LIWAP). For instance, LIWAP recently $65/month in electric bill savings. began allocating two percent of funds for low-income 21 Another way to leverage state and local resources In addition, President Obama solar installations. is to make green bank or loan programs available to recently announced an initiative to help low- and - customers investing in solar. For instance, the Flori middle-income Americans gain access to solar ener - da Solar and Energy Loan Fund (SELF), a non-profit gy. The initiative will triple the capacity of solar and - other renewable energy systems installed in federally lending institution created by St. Lucie County, pro - vides low cost loans to small businesses and residents subsidized housing by 2020, make it easier for home with credit scores as low as 500 for energy-saving owners to borrow money for solar improvements and 28 improvements such as efficiency and solar. start a nationwide program to help renters gain access The fund 22 to solar energy. was initially created with seed money from state and federal grants, and has offered about 300 loans to date For example, North Arkansas Electric Cooperative with interest rates as low as 6% and terms as long as was awarded a federal EECLP loan of $4.6 million to 15 years. Participants see average energy savings of 22 fund geothermal and air source installations, efficient 29 percent. lighting, and weatherization, including Energy Star windows and doors, insulation, water heaters, and roofing. This co-op has already loaned nearly $12 CONCLUSION million for energy upgrades for members, and plans Solar power presents an opportunity to provide LMI to further expand its energy efficiency program with customers with clean, affordable, renewable energy, 23 Using the funds, the co-op provides the RUS funds. helping families to control energy costs while expand - 8-year 3% interest rate loans to eligible members who ing investments in local communities. We encourage own their homes. utilities to adopt equitable policies such as diverse Similarly, the Rural Utility Service awarded Ro - financing options, community solar, and low-income anoke Electric Cooperative $6 million in EECLP and rural energy assistance funding, in order to ex - financing in 2014 to support 200 residential energy pand access to solar to all. - efficiency upgrades each year. This seed capital has al lowed The Roanoke Center, a non-profit subsidiary of Roanoke Electric Cooperative, to serve as their Pro - gram Operator for the “Upgrade to $ave,” an on-bill financing program. This program finances cost-ef - fective energy efficiency improvements for Roanoke Electric Cooperative ratepayers, allowing members to save on their bills without making an upfront pay - 24 ment or incurring new consumer debt obligations, 25 and creates jobs for local qualified contractors. - While neither co-op included a solar energy compo nent in these programs, solar is one of the permitted 26 technologies for the federal EECLP loan program. 5

6 ENDNOTES 24 1 See id and http://roanokeelectric.coopwebbuilder2.com/UpgradeToSave. See “National Solar Jobs Census 2014,” The Solar Foundation, available at 25 http://www.thesolarfoundation.org/factsheet-national-solar-jobs-census-2014/. PR Newswire, “New USDA Program for Financing Energy Efficiency See - Non-profit solar installer GRID Alternatives, for example, has several pro Awards $6 Million to Roanoke Electric Cooperative,” Oct. 23, 2014, available grams and initiatives to provide training and connect employers to job seekers. at http://www.prnewswire.com/news-releases/new-usda-program-for-fi - See http://www.gridalternatives.org/programs/workforce-development. - nancing-energy-efficiency-awards-6-million-to-roanoke-electric-coopera 2 tive-373691390.html. See “State Policies to Increase Low Income Communities’ Access to Solar 26 https://cdn. , Sept. 23, 2014, Center for American Progress Power,” available at - http://www.rd.usda.gov/programs-services/energy-efficiency-and-con See americanprogress.org/wp-content/uploads/2014/09/LowIncomeSolar-brief. servation-loan-program. pdf. 27 Kat Friedrich, “Three Strategies for Low-Income Solar Programs,” Clean See 3 See “FACT SHEET: Administration Announces New Initiative to Increase - http://cleanenergyfinancefo available at Energy Finance Forum, Feb. 5, 2014, Solar Access for All Americans,” The White House (July 7, 2015), available at rum.com/2014/02/05/three-strategies-for-low-income-solar-programs/. - https://www.whitehouse.gov/the-press-office/2015/07/07/fact-sheet-adminis 28 http://cleanenergyloanprogram.org/how-it-works/homeowners. See tration-announces-new-initiative-increase-solar-access. 29 http://cleanenergyloanprogram.org/solar_energy_loan/SELF_Overview_ See 4 , See “Clean Power Plan,” Solar Energy Industries Association available at Qt%202%20FY%202015%20%20FINAL.PDF. http://www.seia.org/policy/environment/clean-power-plan. 5 http://www.residentialsolar101.org/solar-lease. See 6 Edgar Meza, “Study: American middle class embracing solar technology,” See http://www.pv-magazine.com/news/ available at , Oct. 24, 2013, PV Magazine - details/beitrag/study--american-middle-class-embracing-solar-technolo gy-_100013208/#axzz3eTW10T5J (“60% of solar installations are being built in areas with median incomes ranging from $40,000 to $90,000”). 7 See “Georgia Legislature Unanimously Approves Third-Party-Owned Rooftop http://www.greentechme available at , Mar. 27, 2015, Greentech Media S o l a r ,” - - dia.com/articles/read/georgia-legislature-unanimously-approves-third-par ty-ownership-of-rooftop-s. 8 ACEEE, avail See - “On-Bill Financing for Energy Efficiency Improvements,” able at http://aceee.org/sector/state-policy/toolkit/on-bill-financing. 9 See “On-bill repayment programs,” Environmental Defense Fund, available at http://www.edf.org/energy/obr; see also “On-Bill Financing: Cost-free Energy Efficiency Improvements,” National Conference of State Legislatures , April 4, 2015, available at http://www.ncsl.org/research/energy/on-bill-financ - ing-cost-free-energy-efficiency-improvements.aspx. 10 See “Help My House Loan Pilot Program, Program Design and Results,” - En , vironmental and Energy Study Institute http://www.eesi.org/files/ available at HelpMyHouseBrochure_June2013.pdf. 11 See id. 12 See http://www.communitypowerworks.org/electric/financing/. 13 See http://www.pv-magazine.com/news/details/beitrag/powerfin--cps-ener - gy-launch-rooftop-solar-program-in-san-antonio_100021126/#ixzz3m6Th7u - WC. 14 See id. 15 http://www.sfgate.com/business/article/PG-E-helps-Habitat-for-Human - See ity-go-solar-2521541.php. 16 http://www.gridleyherald.com/article/20150506/NEWS/150509852. See 17 See http://www.pge.com/en/about/community/signatureprograms/lo - calenvironment/solarhabitat/index.page and http://www.fierceenergy.com/ story/solar-habitat-all-pacific-gas-and-electric-bringing-sun-new-homeown - ers/2015-07-27. 18 See Grid Alternatives, available at http://www.gridalternatives.org/partner/ job-training-partnerships. 19 Frank Jossi, “Minnesota co-op combines community solar, efficiency,” Midwest Energy News (Jan. 28, 2015), available at http://midwestenergynews. com/2015/01/28/minnesota-co-op-combines-community-solar-efficiency/. 20 See https://www.southernenvironment.org/uploads/publications/CommSo - lar_Utility_Best_Practices.PDF. 21 See “Can public energy assistance funding be used for low-income solar?” GW Solar Institute , available at http://solar.gwu.edu/q-a/can-public-energy-as - sistance-funding-be-used-low-income-solar. 22 See White House Office of the Press Secretary News Release, FACT SHEET: Administration Announces New Initiative to Increase Solar Access for All https://www.whitehouse.gov/the-press- available at , July 7, 2015, Americans office/2015/07/07/fact-sheet-administration-announces-new-initiative-in - crease-solar-access. 23 See Anne Mayberry, USDA Office of Communications News Release, USDA Launches New Initiative: Finances First Energy Efficiency Program Loans in Arkansas and North Carolina , Oct. 23, 2014, available at http://www.usda. gov/wps/portal/usda/usdamediafb?contentid=2014/10/0237.xml&print - able=true&contentidonly=true. 6

7 This project is supported by: And: Center for Sustainable Communities Gasp Allendale County ALIVE, Inc. Northside Development Corporation Rembert Area Community Coalition For more information, contact: Berneta Haynes Lowell Atkinson Dwayne T. Patterson Program Director Associate Attorney Director [email protected] 127 Peachtree St., Suite 605 Regional Organizing and Atlanta, GA 30303-1840 Civic Engagement [email protected] [email protected] SouthernEnvironment.org

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