Solar panel prices have seen a sustained drop – more than 70 percent since 2009 – but it costs approximately $15,000 or more to have a solar array installed, or $7 to $9 per watt produced. This expense puts one of the most popular alternative energy sources out of reach for low income Americans, who would most benefit from the long-term savings.
Single family homeowners are using their roof space to install relatively inexpensive solar panels, but many low-income Americans live in either apartment or rental properties and don’t have permission to install the panels.
Consumers Benefit from Alternative Energy Sources
A small-scale, on-site power source, or distributed generation system, has seen a dramatic increase in interest and implementation, especially in the solar energy field, increasing globally by 50 percent in 2016. Consumers using distributed generation systems connect to the electrical grid for power when their solar panels aren’t producing enough energy to meet their needs, and to sell energy back to the utility when their systems produce excess energy. Energy net metering, or the process of selling excess energy back to a utility, could result in even further utility cost reductions for low-income Americans.
The cost per watt has come down from $76.67 in 1977 to 60 cents, but the upfront costs are still not affordable for low-income Americans. Eighty percent are estimated to want solar power, but can’t install panels on their homes.
Other groups are working to make alternative energy sources, such as solar energy, accessible to low-income Americans through group discount programs, leasing and community solar gardens.
Some organizations are using greenhouse gas emissions cap-and-trade – taking the funds factories and power plants use to buy carbon credits – and reinvesting them in clean energy, such as GRID Alternatives. Solarize, founded in 2009 in Portland, Ore., collectively bargains on behalf of groups of home or business owners to lower the cost of installations, reducing the upfront costs for solar energy.
Solutions that Fit
Solar gardens are a community-owned solar array using energy net metering, and are an alternative to installing panels for those who are low-income or who live in a heavily shaded area. Solar gardens pool the costs and the benefits, making it an attractive option for those who can afford to buy-in or “subscribe.” The upfront costs can be raised through crowd funding or through a third-party financier power purchase agreement.
Solar gardens require a lot of groundwork, however, and cooperation between communities, legislators and utilities. A garden manager should be designated to oversee the sale of shares and the operation and maintenance of the solar garden, in addition to the upfront costs. A utility can also handle this responsibility if a community partners with a utility.
PoisGen is a solar panel leasing company – unique for focusing on low- to middle-income homeowners – operating in Louisiana and New England. Generally, a solar panel lease works like any other. A homeowner agrees to lease the panels for a period, usually between 10 and 20 years, and to purchase energy from the leasing company. There may be a down payment, and the leasing company is responsible for the care and maintenance of the system.
However, those who lease their solar panels usually miss out on federal tax credits and state incentives for those installing their own panels, including the ability to sell Renewable Energy Certificates to electric utilities. If a homeowner sells their home, they must either transfer the lease to the new owners or pay to terminate the contract. Leases also are primarily available in sunny states with generous incentives.
Innovators are finding new and creative ways of harnessing solar power as solar energy becomes more popular. Xcel Energy has partnered with the Colorado Energy Office to develop community solar gardens for low-income households as part of a settlement. The Obama administration proposed installing enough solar panels on federally subsidized housing to generate 300 megawatts of electricity by 2020, and third-party owners are leasing skyscraper rooftops in urban areas to build solar farms.
Another important factor in ensuring low-cost, safe energy in low-income households is up-to-code electrical wiring in good repair. While there are programs such as Habitat for Humanity’s A Brush of Kindness and USDA Single Family Housing Repair Loans and Grants, such programs have income, age or area eligibility requirements. Many citizens lack the savings for an emergency repair, according to HomeServe USA’s Biannual State of the Home Survey Summer 2017 edition. Nearly 30 percent of those surveyed didn’t have any money set aside for an emergency – and not all of those will qualify for repair assistance programs.
HomeServe offers low-cost warranty programs for interior and exterior electric lines as well as other systems in the home. HomeServe utility partners may qualify for royalties that can be applied to low-income assistance or renewable energy programs.