Solar Finds Its Place in the Sun Among America’s Poor
WHY YOU SHOULD CARE
Clean energy, long seen as a luxury for the affluent, is now reaching more low-income homes.
In a white hard hat, cargo work pants and sunglasses, Krystal Ruiz climbs the scaffolding of a multifamily public housing unit on Manhattan’s Lower East Side. Ruiz is installing solar panels on the building as an installation supervisor with GRID Alternatives, a nonprofit providing solar energy to low-income communities in cities across the U.S. She’s excited. A public housing tenant herself, Ruiz is helping to realize the potential of solar power for communities that simply couldn’t access it a decade ago.
It’s a silent revolution sweeping across America’s landscape even as the federal government rolls back its climate commitments under President Donald Trump. When engineers Erica Mackie and Tim Sears founded GRID Alternatives in 2001, after working in renewable-energy installation in the private sector, they were loners. Now, lower costs, policy changes and a growing recognition of the market potential of less-well-off communities are combining to make what were earlier government- and nonprofit-led do-gooder initiatives attractive for the private solar-energy sector too.
As recently as 2008, there were no programs that were effectively providing solar power to low- and middle-income communities. That year, the California Public Utilities Commission selected GRID as the program manager for its Single-family Affordable Solar Homes (SASH) incentive program. GRID began installing the panels, providing community outreach and education about the program and offering complete financial coverage of the installation, using donations to fill in funding gaps.
For companies to succeed, they need to figure out solutions for this [rural] demographic too.
Dawn Lippert, CEO, Elemental Excelerator
Today, there are at least 35 programs nationwide aimed specifically at providing affordable clean energy to low-income homes, according to the Clean Energy States Alliance. SASH alone had completed 7,038 projects by the start of June 2018. Other states are following suit. Before 2015, Connecticut had no established programs aimed at providing clean energy to low-income communities. Today, it has five. The Minnesota Housing Finance Agency Fix Up program offers low-interest home improvement loans to low- and moderate-income residents for energy-saving improvement projects like solar panel installations, septic system upgrades and window treatments. In 2016, it invested $1.09 billion in these projects statewide.
Support from accelerators like Elemental Excelerator (EEx), a nonprofit partnered with Emerson Collective that invests in companies improving clean-energy systems, is spawning a wave of startups catering to neglected or rural communities. There’s Pono Home, a Hawaiian B Corporation offering homes and businesses energy-efficient device installations like LED lighting and high-efficiency water fixtures. PastureMap in San Mateo, California, combines cattle-grazing data with soil and rainfall analytics — managed grazing like this could offset 16 gigatons of carbon dioxide by 2050, according to EEx.
Established private-sector solar firms are expanding in the low-income market too. Louisiana-based PosiGen, which made Connecticut its second state in 2015, is now also taking its affordable rooftop solar program to Minnesota and New Jersey. In 2007, Solar United Neighbors got its start by encouraging D.C. residents to install rooftop solar panels. Today, the organization is focused on providing accessibility to solar for all, through community solar programs, low-income solar and grid reform. This emphasis on previously neglected rural and low-income communities comes at a time when the private solar industry’s traditional model, catering to those with high incomes or at least high credit scores, is increasingly under strain. Five of the country’s six biggest solar-rooftop firms have filed for bankruptcy, cut spending or put themselves up for sale over the past two years.
“What are the revenue opportunities in rural communities?” asks Dawn Lippert, CEO of EEx. “For companies to succeed, they need to figure out solutions for this demographic too.”
A dramatic fall in solar panel manufacturing costs — from $101 per watt in 1975 to just $0.48 in 2016 — has been central to these efforts to reach low-income families and offset cuts in government funding for the industry, suggests Julian Foley, vice president of communications at GRID Alternatives. GRID has managed to cut its customers’ energy bills by 70–90 percent. “A lot of low-income people don’t think about solar energy as an option,” says Foley. “If you want them to think about it, you have to put it in front of them.”
That’s exactly what GRID did for Yadira and Frank Cruz in Pico Rivera, California, east of Los Angeles, when it installed around 4275 watts of direct-current energy solar panels on their home last year. The Cruzes have been saving between $80 to $100 a month since then while still living comfortably, and GRID estimates they could save up to $40,500 over the lifetime of the system. Before becoming a GRID customer, Yadira says she never thought about paying for solar, but now she depends on the savings to support her large family.
GRID also trains professionals in solar installation, carving out a career path that many like Krystal Ruiz never imagined would be possible. To date, it has trained more than 37,800 people for the solar workforce.
Public sector initiatives matter. California, the state leading in low-income solar initiatives, has a target to install 50 megawatts of solar power in disadvantaged communities by 2021 through SASH and a multifamily version of that program called MASH. The state is now ramping up efforts still further, with a new initiative called Solar on Multifamily Affordable Housing (SOMAH) aimed at installing 30 megawatts of power each year, for the next 10 years.
But it’s the private sector that EEx believes will be vital if clean-energy solutions are to penetrate traditional barriers that have made them inaccessible for disadvantaged communities. That’s why it invests in companies improving clean-energy systems across agriculture, water, transportation and more. Each year it funds between 15 and 20 companies (up to $1 million each) and oversees deployment of the technology. To date, it’s given $22 million to more than 60 organizations.
For sure, this expansion of solar energy to low-income homes faces threats from some of Trump’s moves. In January, the president approved tariffs of up to 30 percent on solar energy equipment manufactured outside the U.S. The solar industry relies on parts made abroad for about 80 percent of its total supply. In February, the administration proposed drastic cuts to the 2019 budget for renewable energy research as well as programs designed to reduce the effects of climate change.
While the absence of government funding will hit organizations focused on increased clean-energy accessibility, they’re confident that other funding sources will keep them going. EEx partners with multiple corporations and philanthropic organizations, and GRID Alternatives has a “turn over every rock” model of fundraising, says Foley, working with state and municipal partners to access local, state and federal clean-energy dollars and a variety of other corporate, foundation and individual funders.
And with subsidies reducing, scaling up — by reaching previously untapped markets like low-income communities — may prove the only solution for private solar firms. To survive, they may have no option but to democratize.