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Community Solar

Enable Clean Energy Access to Low-Income Populations

Using Procurement Methods That Would Lower the Overall Cost of the Project and, in Turn, the Cost for Low-Income Populations

As shown below, lowering project costs is an important strategy in providing equitable access to community solar projects. Lowering costs could be achieved by capturing tax credits, reducing both hard and soft costs, and reducing financing costs. As a facilitator, the main aspects of procurement that you can influence are reducing costs through project aggregation and reducing permitting fees and subscription soft costs, as discussed above and in the reducing project costs section.

Exploring Financing Options to Help LMI Customers Subscribe to a Community Solar Project

Helping LMI customers pay for their subscriptions through innovative financing models can be key to providing equitable energy. The Clean Energy States Alliance’s (CESA) webinar on Community Solar for Low- and Moderate-Income Consumers explains LMI subscription considerations and provides examples of each option.

In addition, the following list, drawn from NREL’s Unlocking Solar for Low- and Moderate-Income Residents, represents potential ways you can help LMI customers pay for their subscriptions:

  • On-Bill Financing

    A funding structure allows residents to pay for an energy investment through their utility bill. In this case, they can qualify with their utility payment history in lieu of their credit score.

  • Low Interest Loans

    Low-interest loans, often through a clean energy loan program, can be used to help target groups gain access to capital.

  • Direct Cash Incentives

    Includes grants and rebates that decrease the total cost of a solar system.

  • Tax Incentives

    Allow for a tax deduction or direct credit from an investment in solar energy.

  • Low Income Home Energy Assistance Program (LIHEAP)/ Weatherization Assistance Program (WAP)

    DOE program funds that can be used to install cost-effective solar and weatherization projects.

  • Developers Obtain Local Grants

    Your city could work with developers to help them pursue state or local grants to provide community solar to LMI customers.

  • Flex Tenant Subscriptions

    A large anchor off-taker, such as a municipal government, could have a flexible subscription that temporarily increases to absorb the loss of subscriptions from LMI customers who move or drop out of the program. Non-anchor off-takers could also play this role.

  • Crowdfunding

    Running a crowdfunding campaign can provide capital that can reduce the total project cost to participants.

Securing Consumer Protection for LMI Populations

To provide equitable energy to target customers, it is important to ensure they are protected over the lifetime of the project. Risks associated with solar projects are (1) developers could take advantage of these communities, such as not including the ability to transfer the subscription in the event that a subscriber moves, and (2) the project could contain unfair future pricing assumptions that harm LMI customers. The city can help increase transparency by thoroughly evaluating developers and projects and making this information easily accessible to LMI communities (e.g., via a public website).

Important things to examine include the project’s escalation rate, the up-front cost, the anticipated savings, and whether customers are able to transfer their subscriptions when they move. Publicly release this data via a portal or other communication platforms. Read the Low-Income Solar Policy Guide‘s article on consumer protection.

Conducting Outreach and Education to Promote LMI Subscriptions to Your Community Solar Project

You may consider engaging in education and outreach to LMI communities to encourage subscriptions. To do this, you must identify a point person on your team to drive forward outreach and communicate through accessible channels. It is therefore important to leverage events and programs organized by your city and existing communication channels for publicity (e.g., local housing authorities and local supplemental nutrition assistance programs).

In addition, once the project has been initiated, clearly describe the billing system of the community solar project to ensure the community members understand the financial benefits and any potential risks, as compared with their current utility bills. Read case studies of successful community solar outreach efforts. The Community Solar Value Project includes a checklist, webinar, and resources on outreach.

Leveraging Existing Programs Focused on LMI Populations

You can leverage other programs targeting economic development in LMI communities. For example, working with local housing authorities can be helpful because they have access to LMI customers and are trusted. These housing authorities allow affordable housing units to pass the benefits on to their LMI tenants and lower the risk of customer turnover and default.

To understand how other cities have leveraged existing programs, take a look at the CESA’s webinar on Community Solar for Low- and Moderate-Income Consumers.

Learn More

The National Renewable Energy Laboratory’s (NREL) Design and Implementation of Community Solar Programs for Low- and Moderate-Income Customers provides additional insight into program designs and structures that can include and retain low- and moderate-income customers, clarify program billing, crediting, and eligibility, reduce customer turnover and default risk, and enroll customers with lower credit scores.