Breaking Barriers: Helping Low-to-Moderate Income Families Go Solar


Advocacy Intern

By Danielle Blustein on Tuesday, July 26th, 2016

Solar power is a growing industry that provides clean energy and can result in big savings on monthly energy bills. But not everyone can easily reap the benefits of solar power. Low-to-moderate income families struggle with many barriers that prevent them from going solar.

Some of these barriers include:

  • Large upfront costs
  • Lack of access to financing options
  • Low credit scores
  • Inability to harness tax incentives
  • Lack of home ownership
  • Residence in multi-family housing
  • Lack of roof access

These barriers are especially troubling because low-to-moderate income households have the most to benefit from installing solar. Low-income families spend three to four times more on energy expenses than higher income families.  A recent report identified the best ways utility companies and communities can help low-income households break through the barriers and go solar.


Whole communities stand to gain from better solar access.

When low-to-moderate income participation in the solar market is absent, it negatively affects everyone. As more people go solar, not only do those individual households save money on their monthly energy bill, but the community at large often saves money on traditional energy expenses. Residents generating their own solar power means that the community doesn’t have to pay for new and expensive power plants or transmission line upgrades. This saves all residents of the community money while also benefiting the environment. These benefits highlight the importance of recognizing the barriers low-to-moderate income households face and having the tools necessary to break these barriers.

Broken Barriers: Upfront Costs and Bad Credit

Although costs for solar have decreased significantly over the past few years, large upfront costs remain a barrier for low-to-moderate income families. One way to mitigate this barrier is for solar utility companies to offer leases or power purchase agreements (PPA) to consumers. Leases or PPAs allow consumers to “rent” their rooftops to the solar company in exchange for credits on their energy bill, with no upfront costs. However, many low-to-moderate income families would still be ineligible for leases or PPAs due to another common barrier: bad credit. But on-bill financing could be the solution to solve both of these barriers.

On-bill financing is a loan that gives customers the ability to pay for their energy efficiency efforts, such as solar, over an extended period of time at no upfront cost. This allows customers to save money and energy from day one! On top of that, eligibility for on-bill financing is determined by using utility bill payment history instead of credit score. However, it is important to note that on-bill financing is a very new financial tool and as such there is a great deal of uncertainty as to how each utility company may set up their system. States should ensure that their on-bill financing program allow low-to-moderate families to realize the benefits of solar by saving money and energy while protecting other financial and consumer interests.

Broken Barriers: Lack of Homeownership and Roof Access

Lack of homeownership or roof access is another major barrier low-to-moderate income families must overcome in order to go solar.  Many low-to-moderate income families rent, live in an apartment or have other living situations without the roof access necessary for solar installation. To combat this barrier, communities can invest in community solar projects, where the costs and savings are divided by the community. To truly encompass all socioeconomic groups in community solar projects, communities should focus on the following guidelines:

  • Communities should make sure to use on-bill financing or other financing options that keep subscription fees low for all participants. This will allow more low-to-moderate income families to participate regardless of their living situation. Low fees will also incentivizing more community members to partake in community solar projects.  
  • Communities should reserve a portion of available community solar subscriptions for low-to-moderate income families. This will ensure that low to moderate income families will be able to partake and benefit from community solar projects.
  • Utilities should reserve between 25% to 50% of community solar projects for siting in underserved communities.

California has recognized the benefit of ensuring low-to-moderate income solar participation and recently passed a law that stipulates that ⅙ of community solar projects are reserved for siting in disadvantaged communities. In enacting this bill, California enables more low-to-moderate income families to go solar, creates 5 million jobs with a total payroll of $45 billion, saves homeowners $200 a year on energy bills, benefits the entire community and the environment and more!

The government has advocated for similar solutions through the Clean Power Plan with the Clean Energy Incentive Program, CEIP. This program rewards renewable energy investment, such as solar, in low-income communities. However implementation of this plan is on hold as the Supreme Court reviews its constitutionality. So, until then it is important for all of us to tell our community leaders that we all want lower energy bills, and a great way to do it is by helping low-to-moderate income families break down barriers and go solar! For more information on what solar policies and incentives your state offers click here.

2 responses to “Breaking Barriers: Helping Low-to-Moderate Income Families Go Solar”

  1. Mary Smith says:

    I live in a 55+ community. My neighbors and I attended a LEASED solar panels presentation (not to be confused with a purchased solar panel installation).

    My lovely neighbors are all in their 80’s. They, and I, were told they’d save money every month and the system would be free to them if leased from them. But it was not free. The contract stated that we’d need to pay $192 a month to the solar panel company’s holding company. That amount was scheduled to go up in cost every year. The contract was for 25 years and it stated that the costs must be passed on to the heirs or to the new owners of the home. In other words, the heirs would need to find a new owner willing to assume an ever inflating solar panel contract. If not, the heirs would be indebted to the solar company for the life of the contract which again is 25 years.

    They solar power company made suppositions of a 4% yearly increase by our local Energy Company here in NJ. That is an inflated figure for sure and has never come close to that figure. Also, with deregulation, tarrifed Electric Companies may become a thing of the past. The cost of electricity has, and will continue to, come down with competition in the marketplace.

    During the presentation we were assured that if the solar panels needed to be removed from the roof the homeowner would get that service for free. However, the solar panel leasing company stated, in their contract, the exact opposite—that if solar panels needed to be removed for roof work the home owner would need to pay for that.

    The solar power leasing company used font that was probably a size 2 on a very important sentence on the contract. Underneath the graph showing savings for the home owner, in very tiny font, is written “All savings shown here are for illustrative purposes only” In other words you can’t believe anything written in the contract.

    I think selling 25 year leases to octogenarians is disgusting and unconscionable. We would not have seen a savings with our electric bills at all, our heirs would be indebted to a holding company for 25 years, and we would need to pay for removal and reinstallation of the panels if our roofs are damaged by the solar panels. For these reasons, I submit, that leasing solar panels is a very bad idea..

    If you’re young, if you’re financially able to BUY a system, then buying solar panels will probably make sense. If you’re older, lacking the funds to PURCHASE a solar panel system, then leasing makes little sense in my opinion.

  2. We agree that shared renewable energy programs have tremendous potential to expand access and provide meaningful benefits to low- and moderate-income customers. Our guidelines, Shared Renewable Energy for Low-to Moderate-Income Consumers: Policy Guidelines and Model Provisions, consider that moderate-income customers may have different circumstances (such as higher credit scores or higher rates of ownership) than low-income customers; so while LMI customers are often grouped together, different program design approaches may be necessary to more effectively reach the range of customers within the LMI category. Additionaly, some barriers to LMI customer participation may remain since they are dependent on policies outside the scope of shared renewables program design. IREC suggests that policymakers and others be aware of these restrictions and take them into account when designing programs.

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