Guest column: Community solar can help affordable housing residents fight inflation

Travel across the country, or even your home state, and you’ll see shining fields of silicon that weren’t there decades ago. There’s no mistake that we’re in the trenches of a momentous energy transition. As the transition evolves and the impact to our existing power generation grid and environment grows, the calls for this transformation to do more than just provide clean power will increase.

In addition to a cleaner grid, we can deliver more equitable energy distribution solution for all. Thankfully, that’s what many states and the federal government are trying to accomplish with community solar.

Community solar is a shared solar farm that renters, homeowners, businesses, hospitals, schools — practically anyone who pays an electric bill — can subscribe to and receive renewable energy credits that result in a discount of 5 to 20% on electricity costs in most states.

Tens of thousands of households and businesses are already subscribed to community solar projects, and they’re saving money on their electricity bills and contributing to a less fossil fuel-dependent energy system. Bolstered by prevailing wage requirements in their construction and guaranteed savings for participants, our industry is democratizing solar by making it accessible to more economic classes, including for those who lack the space or resources to invest in panels themselves while also creating well-paying jobs.

Critically, community solar programs are increasingly focused on ensuring these energy bill savings are shared with low-income households, with many states reserving capacity for them. The median household spends about 3% of their annual income on energy costs, whereas lower-income households sometimes pay as much as 14%. For these LMI households, community solar is an effective policy lever that provides breathing room in the household budget where it’s needed most.

But it’s not all sunshine and roses just yet. Inflation has remained persistent, squeezing low-income households on every front. While low-income households are beginning to participate more than in the early years of the community solar, there remains a glaring access gap: millions of extremely low-income (ELI) families living in master-metered affordable housing are structurally barred from using community solar in many jurisdictions. These are households with annual incomes at or below 30% of the area median income.

There is a clear bias towards individual sign-ups in most community solar programs. But there is a real opportunity for both states and the federal government to expand access to households whose utilities are included in their rents, particularly for the more vulnerable populations in our country.

It’s worth taking a moment to understand this point. Most heads of households in affordable housing are female; most are young; most are historically underserved groups, skewing towards people of color; many have children living there.

Most of all, these households are hit by price from inflation increases harder than any other segment of the population. Community solar is an opportunity to bring a shared benefit to these households when the cost of everything else is going up.

The federal government has stated it is serious about helping out working families in the fight against inflation, but these LMI households and these community solar programs need to be at the top of the list of priorities.

For community solar to fully live up to its potential, policymakers and regulators must ensure everyone — particularly low-income households — has access to the important cost savings it provides. To do this, the Dept. of the Treasury must update the Low-Income Communities Bonus Credit Program rules to allow master-metered affordable housing participation. At present, the program prevents this type of housing from accessing community solar that has been awarded this bonus credit, and the associated minimum 20% savings guarantee it brings.

The blended average electric bill across the United States is about $135. Twenty percent savings on a bill that size is $27 a month. Yearly savings of hundreds of dollars will make a meaningful impact to most LMI households.

But the onus isn’t entirely on the feds — states must take the initiative as well.

At present, only a few states address master-metered housing in an inclusive way: New York, New Jersey and Minnesota to name a few. These states haven’t implemented it perfectly, and it does require additional effort to accommodate multi-metered housing: the buildings are usually billed on a commercial versus residential rate class for example, complicating the credit valuation. But this has not been an impediment to action, as these states have shown in their updated programs.

States considering starting a community solar program should learn from these states and include multi-metered affordable housing in their program design.

But Illinois has gone in the wrong direction by outright barring master-metered households from participating.  The Illinois Power Agency should reverse this policy in favor of expanding the ability for residents in master-metered affordable housing properties to gain much needed access to additional savings.

States have been laboratories for community solar, incubating some innovative programs in the last decade and a half. The  states must take the lead on making community solar truly accessible to all by including master-metered housing when building a program or updating their current one. The federal government can support this by including this housing type in updated guidance. By doing so, states can leverage federal dollars in their own programs for the benefit of those who need the most help.