Affordable solar injects funds into low-income neighborhoods

Stalled government incentives could prevent further access to once-expensive clean energy.

When Yesenia Rivera and her husband became first-time homeowners, they made a big jump. They went from living in a single bedroom to now having four, in a suburb outside Washington, D.C. They wanted to spread out, but they also had to cool all four bedrooms. In the middle of the summer, with utility bills costing 6 percent over the national average in Prince George County, Rivera did not want to get stuck with an electric bill of $400-$500 each month.

So, they became some of the first homeowners in their neighborhood to invest in solar panels. Now, Rivera doesn’t have to choose between suffering from an asthma attack in the stifling summer weather or paying an exorbitant utility bill. Just last month, in the midst of soaring prices from inflation, she paid just $20 to cool her home.

“It’s security,” Rivera said. “That is something a lot of folks take for granted because they haven’t suffered from energy burden. But that struggle is real.”

Historically, low and moderate-income communities have been left out of the move to solar — and the savings that accompany it — even though those are the households that could benefit the most. Two-thirds of low-income households experience a high energy burden, paying around 8.6 percent of their annual income on utilities. This is three times more than what non-low-income households pay for their heat and electricity.

Yet, across America, people who own solar are generally more wealthy. A 2022 Lawrence Berekley report found that solar owners have an average income that is 58 percent higher than their county’s median. After all, it costs up to $30,000 to complete a solar system installation on one home. Plus, many low-income Americans are renters or their homes do not have the sufficient infrastructure to support solar panels.  

“Being able to install a solar system that cuts that bill in half and saves them a lot of money,” she said. “They don’t have to choose between paying bills, buying medicine and putting food on the table.”

However, the sky falling cost of solar across the country has allowed thousands of low-income families and neighborhoods to benefit from clean energy. Solar’s cost has declined by more than 89 percent in the last decade, and it’s only expected to get cheaper. 

It is now more affordable for entire neighborhoods to buy into a community solar project and decorate their own roofs with panels. Investing in solar now comes with cost savings each month and a quick return on your investment — it now takes four or five years to gain your money back, compared to 15 or 20.

“It helps folks take control of their utility bills,” Rivera said. She now works as the director of energy equity and inclusion at Solar United Neighbors, helping provide clean energy systems to communities. Rivera said she now sees solar panels dot her neighborhood.

“Being able to install a solar system that cuts that bill in half and saves them a lot of money,” she said. “They don’t have to choose between paying bills, buying medicine and putting food on the table.”

GRID Alternatives, a nonprofit helping environmental justice communities (or places typically excluded from public investments), works with municipalities to manage community solar projects and offer no-cost solar installations for historically disadvantaged neighborhoods.

Danny Hom, external affairs manager for GRID’s Greater Los Angeles division, said he has seen firsthand entire communities like Inglewood and Watts transform into solar panel-lined streets. These neighborhoods have typically been the last places to transition to new technology, Hom said, but government-funded pilot programs and tax incentives have made it possible. 

In 2020, Congress extended its Renewable Energy Tax Credits and now offers a 26 percent credit for the cost of a solar photovoltaic (PV) system installed before 2023. Some states, like New York and Colorado, provide their own incentives and tax exemptions for solar systems. This funding allows organizations like Solar United Neighbors and GRID Alternatives to install PV systems at little or no cost for the individual.

“The communities that were most at risk of being left behind in a transition to clean energy are now able to move to the front of the line,” Hom said.

Stalled incentives could slow solar projects

But the federal tax credit expires in 2024 unless Congress renews it. President Joseph Biden’s Build Back Better Act would bump the credits to 30 percent and include a standalone tax credit for solar batteries for 10 years. But the bill has been stalled in Congress for months. That’s why Rivera said she’s been campaigning for BBB to pass. 

“If we don’t have that incentive to create low to moderate income solar projects, you’re not going to see those projects develop,” Rivera said. “We can come up with 20,000 different projects and different ways of trying to pay for these systems. But without the right policies in place, it makes it harder.” 

Energy Resource Center (ERC), a nonprofit in Colorado, has worked for nearly two decades to make income-qualified homes in 27 counties more energy efficient. They started by providing services like air conditioning, insulation, and hot water heaters but have recently added solar systems to their repertoire. Since ERC is state-funded, Paul Maestas, solar program director, said they have to ensure every program is cost-effective.

“With the falling cost of solar, it’s made it more affordable for us and something we can now offer to our clients,” Maestas said.

But installing solar doesn’t just pad wallets. Maestas says their services also help the environment, create green jobs, put money back into communities, ensure people can afford their homes and give preventative health and safety audits. Many old houses they service have outdated gas lines, crumbling roofs or are at risk for carbon monoxide poisoning, all of which ERC checks as soon as they start a job.

“There’s not a job in my mind that can even hold the torch to what I do,” Maestas said. “There are very few occupations out there that have the ability to make such an impact on people’s personal lives. We’re in people’s homes every single day making a difference.”

However, even as solar prices continue to plummet, the prices of the batteries and storage needed for a functional solar system are still relatively high and not decreasing as quickly as solar itself. 

Hom said while these technologies are expensive, the clean energy landscape is rapidly changing. From prices to policies, the entire solar energy industry could be different in a matter of years. 

“It’s safe to assume that at some point, we’ll see solar in a widespread way,” Hom said. “And it’ll be a thing of the past to only associate solar with wealthy neighborhoods.”

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