States Support Clean Energy for Low-Income Residents

Clean energy innovations tend to follow a familiar arc. The newest best thing, whether that is rooftop solar, a Tesla PowerWall, or a Prius in the garage, is bought at a premium by first adopters. As the technology proves itself, costs come down, and a range of financing becomes available, these new technologies become accessible to a broader slice of upper and upper-middle income consumers. Yet, those who need the energy cost savings the most are typically the last to be able to afford them. Low to moderate-income drivers can’t afford to buy a new Prius, and don’t qualify for the necessary financing, so they keep dumping money into the old gas-guzzler. They will pay more in the long run, but don’t have the means to make the leap to a cleaner, more efficient and less polluting technology.

In recent years, a number of states have sought ways to bend the arc of clean energy technologies to benefit the lower-income segments of society. Now both California and Massachusetts have announced well-funded programs that should help those who lack disposable income and may not own property.

California’s Multifamily Affordable Housing Solar Roofs Program (AB693) dedicates $1 billion over 10 years to help provide solar PV – and, we believe, energy storage – to low-income families, who typically rent and thus would not otherwise benefit from solar even if their landlord were to install it. The California program specifies that tenants must see energy cost savings from what amounts to a community or virtual net metering system. The program’s goal is to install a minimum of 300 MW of solar PV on multifamily affordable housing facilities; funding from the program comes from the state’s greenhouse gas cap-and-trade revenues. The actual program design under the law has to be sorted out by the California Public Utility Commission over the next year or so.

Massachusetts, meanwhile, has announced the $15 million Affordable Access to Clean and Efficient Energy Initiative, which will be funded by a $10 million commitment from the Department of Energy Resources (DOER) and $5 million from the Massachusetts Clean Energy Center (MassCEC). The program will address challenges related to high-cost, high-emissions heating fuels, complex financing, and expensive up-front costs of clean energy projects. This initiative, like AB693, also includes a focus on providing solar PV for the benefit of residents of affordable housing developments.

It is worth noting that at least 12 states, including the District of Columbia, have adopted community net metering programs to help lower-income residents access the benefits of solar PV. These programs can help overcome the split incentive problem faced by renters and landlords, to deliver the benefits of solar PV to all – not just to homeowners.