How can solar work for people of all incomes?

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Solar is booming, in Minnesota and across the world. But barriers like owning certain kinds of property and paying significant upfront costs have made solar an option that works for a relatively small group of customers. At Fresh Energy, we want to create policies that make solar an option for everyone. That’s where community solar comes in.

In the working draft of our recent white paper, Bringing Community Solar to a Broader Community, we tackled this problem head on. By examining the current best practices across the country and analyzing how they might work in our market, we’ve come up with policy recommendations that can take Minnesota from solar for some to solar for all.

Low-hanging fruit
Some basic tweaks to how community solar agreements are structured and financed could go a long way to opening up that option for low and moderate income Minnesotans.

  • Remove credit score minimums – States could require developers receiving tax credits or low interest government-backed loans to accept lower credit scores from applicants.
  • On-bill repayment – This mechanism would allow community solar customers without the funds to pay for the upfront costs of a project to spread those costs out over time.
  • Formalize “back-up subscriber” models – To keep gardens fully subscribed, developers could offer to include applicants on waiting lists to cover any decline in existing subscriptions, or larger institutional subscribers could backfill low-income subscribers to assure financial partners.
  • Work together – A working group dedicated to low-income participation, similar to New York’s Low Income Collaborative, could promote better coordination between the various stakeholders. Outreach programs could also include job training and education.

Heavier lifts
Other solutions may take more work to implement in either the legislative or regulatory space, but they could come with much greater benefits as well.

  • Incentives – State legislation could incentivize solar developers to dedicate a larger amount of their portfolio to low- and moderate-income community solar projects, especially if the federal ITC is not extended beyond 2016.
  • Utilize LIHEAP – California’s “Solar for All” pilot program was designed to use a portion of the state’s LIHEAP allocation to fund solar projects in low-income communities. State policymakers could request approval to allow similar programs to develop nationwide.
  • Central bank – A green bank could establish numerous loans, credit enhancement programs, and rebates for low-and moderate-income community solar projects while further promoting private funding streams as well, such as impact investments.
  • Carve-outs – Carve-outs could require participation thresholds or siting requirements, ensuring that low- and moderate-income households have access to community solar.

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