Sidebar Menu

Solar Energy for Low Income Group

Historically, solar has largely been seen as a technology mostly used by hard core environmentalists and rich individuals. High solar installation cost, coupled with unclear policies had put the solar out of reach of the majority of people. But in recent years falling prices, tremendous development in solar technology, government incentives in the form of tax credits and creative financial approaches have made solar accessible to the large portion of the population. So there is a critical need now to promote solar energy in the low income group as we cannot create a truly sustainable future by alienating some people from access to clean living technique and renewable energy. Melissa Giorgi, Environmental Ethics Fellow at the Markkula Center for Applied Ethics sums it up, when she says. "If solar is to be a real contributor to a sustainable future, then innovation and investment must focus on improving equality rather than increasing divisions."

According to the American department of Health and Human Services, low income group pay 9.2% more on their average electricity bill as compared to the average house hold. These communities are also more susceptible to the hardships resulting from extreme weather disaster and climate change due to their limited resources and lack of economic stability. Solar energy can tremendously help these disadvantaged communities by reducing their electricity bills, thereby improving their quality of life.

Strategies for Low-Income Solar Programs

Certain enterprising organizations have adopted different types of approaches to promote solar in low-to-moderate-income communities. These are group discount programs, affordable leases and community solar installations. Currently, home ownership and the credit score are the barriers that prevents low income communities to take full advantages of the solar programs. So community solar installations program has been designed to include tenants and property owners whose houses are not suitable for solar panels.

Group Discount Programs

In this program, community members form a group and make a bulk purchase to save on the total cost of going solar. This process can be structured in two ways-In the first approach, group of house owners purchase the solar systems together and select a single contractor to install the solar system in each of their building, thereby saving on the cost. Each participants has his own contract with the installer and own their own system. In second approach, solar panels are bought directly from the manufacturer in bulk, and then participants complete the installations themselves by helping each other or give the contract to the installer to install the panels.

These approaches provides economics of scale by enabling installer to install the panel for less, drive down the prices by increasing the competition, more bids due to larger size of the project and more negotiating power due to a larger project. This process also saves time as you do not have to navigate multiple bids and scenarios independently and can share work with group members.

Affordable Leases

Solar panels needs a large upfront investment for outright purchase and installation. Many middle class families can afford this, given the long term energy saving, but is difficult for low income communities to make a large upfront investment.

To overcome this problem, a solar leasing company called PosiGen, has developed its model in Louisiana, which is now expanding to New York and New England. PosiGen focuses on low-to-middle-income home owners, and takes a whole- home approach by including both renewable energy and energy efficiency. The company offers a solar lease product with no credit checking and guarantee certain percentage of energy saving. They negotiate with the bank on client's behalf to provide favourable leasing terms. PosiGen's solar leasing receives special consideration from banks as banks are given points by their regulators for participating in community redevelopment projects. PosiGen's approach has had a very high success rate in Louisiana, where over 400 systems have been installed per month. PosiGen also leverages tax credits when they are available as the third party ownership model for low-income homeowners is creating tremendous opportunity.

Community Solar Installations

Home ownership is the primary requirement for installing solar panels. So, community solar offers affordable alternative and is ideal for low-income individuals who rent single-family and multi-family homes or tenants who wants to reduce their electricity bills .Community solar doesn't require an personal solar installation and offers the residents the option of buying solar power that is produced by the large array of solar panels somewhere else. For this purpose, communities are building large solar array in former brownfields. In Lowell, Mass, US solar array has even been planted on a former landfill

Solar panels

Ref - http://www.solarfeeds.com/

Low-Income solar programs and initiatives

There are number of organisations which are offering solar pilot programs and creating initiatives to make solar accessible for low-income consumers. These organizations are facing many obstacles such as high initial costs, poor or non-existent credit history of end users, uncertain policy frame work, issue of splitting incentives between the tenants who benefits from the solar power and the building owners who finance the solar installation and building owners who do not realise the full energy saving that will offset the finance cost. Some of popular organizations are -

1) Grid Alternatives

Grid Alternatives is a non-profit solar installer in California, which installs solar electric systems exclusively for low-income homeowners, providing them with much needed energy savings, prepares workers for jobs in the fast-growing solar industry, and reduce carbon emissions.

grid

2) Renewable Energy and Electric Vehicle Association (REEVA)

REEVA is located in Fincastle, VA and is a Do-It-Yourself club, which helps members to do solar/wind installations and build electric vehicles at home. This initiative removes the labour cost thus reducing the cost of a project. They create jobs in rural communities by providing solar installation training and also install solar systems on community buildings.

smallsun

3) Solar Richmond

Solarize Richmond is a non-profit organization founded in 2006 in Richmond, California .It offers staffing services leading to temporary and permanent employment, free solar training and green business ownership opportunities for low income and under-employed residents. They promote solar and inclusive green economic development in Richmond and the Bay Area and also serve as a solar and green-jobs advocate.

solararm

4) Citizen Energy

Citizens Energy is a non-profit in Imperial, CA, which installs solar systems on the homes of low-income group of the electric utility Imperial Irrigation District (IID). Citizen Energy has co-develop the Sunrise Powerlink transmission line to provide additional power to the Imperial Valley in CA by partnering with San Diego Gas and Electric. Revenue received from the transmission line project is used to fund the low-income solar installations.

citenergy

5) RREAL

Founded in 2000, RREAL has been pioneering the use of solar energy to address low-income fuel poverty throughout the Midwest.

real

Recommendations

To promote solar energy in low income group, we should consider following -

1) Distributed solar generation should be encouraged by implementing policies that supports the deployment of solar with energy storage at critical facilities that provide services to low-income communities.

2) Existing bond financing tools should be utilized to finance solar on public buildings and non-profit-owned facilities.

3) Public funding of solar PV in low-income communities should be integrated with workforce development funds and job training programs.

4) Bulk purchasing programs which combines a consumer purchasing co-op model with energy consumer education should be encouraged.

5) Enact state legislation that advances distributed solar generation benefiting low-income communities. It can also create an innovative public benefits fund to leverage private investment in renewable energy projects benefiting low-income communities.

References

http://www.cesa.org/assets/2014-Files/Clean-Energy-for-Resilient-Communities-Report-Feb2014.pdf
http://www.communitypowernetwork.com/bulkpurchase
http://easycleanenergy.com/cecblog/index.php/community-solar-can-empower-low-income-neighborhoods
www.renewableenergyworld.com