A series of Yale360 articles on energy justice and democracy
Energy Equity: Bringing Solar Power to Low-Income Communities, APRIL 4, 2019, by MARIA GALLUCCI
Bringing Energy Upgrades To the Nation’s Inner Cities, MAY 11, 2016, by DIANE TOOMEY
Why Low-Income Households Need to Be Part of the Clean Energy Revolution, by Katherine Bagley, May 16, 2019
Researcher Tony Reames focuses his work on the growing energy divide between rich and poor Americans. Reames, director of the Urban Energy Justice Lab at the University of Michigan in Ann Arbor, talks about the idea of energy as a basic right, the history of energy justice issues in the United States, and the need to improve low-income Americans’ access to the clean energy revolution. In an interview with Yale Environment 360, he talks about why it is important to provide low-income communities with better access to affordable clean energy technologies.
“Fuel Poverty” is a concept in the UK and other European countries. They’ve actually said that [energy poverty] is a distinct form of poverty that has all these other health implications, social implications. They view it as a national issue. It’s codified in law. There are agencies that are working on ways to address this. They have maps, they have research funding for this topic. What that does is allow them to identify a number of households and a target, so they look to reduce fuel poverty by X percent every year. That’s something I would really love here in the U.S.”
BY KATHERINE BAGLEY • MAY 16, 2019 in Yale 360
Nearly a third of U.S. households struggle to afford their energy bills, with one in five cutting back on or forgoing necessities such as food or medicine to pay for electricity and heat, according to the U.S. Energy Information Administration. Some 14 percent have received a disconnection notice, and 10 percent keep temperatures at unsafe levels to reduce costs. Of those struggling, about half are black and 40 percent are Latino.
This growing divide in energy affordability and accessibility highlights the need for what University of Michigan researcher Tony Reames refers to as “energy justice.” For decades, low-income households have tried to cope with rising energy costs. Yet, as Reames’ research shows, they often have the least access to energy-efficient or clean energy technologies. He and colleagues have found that
- the cost to upgrade to energy-efficient lightbulbs is twice as expensive in low-income neighborhoods as it is in more affluent areas. They have also found that
- for every dollar Michigan utilities spend on energy efficiency programs targeted at low-income consumers, they spend as much as $4.34 on programs for higher-income consumers.
In an interview with Yale Environment 360, Reames, director of the Urban Energy Justice Lab at the University of Michigan in Ann Arbor, talks about the idea of energy as a basic right, the history of energy justice issues in the United States, and the need to improve low-income Americans’ access to the clean energy revolution.
Yale Environment 360: Last year, you and your colleagues published a study that found the cost to upgrade to energy-saving light bulbs was twice as expensive in low-income neighborhoods as it was in more affluent areas. How did the idea for that study come about?
Tony Reames: I used to own a rental house in Kansas City. A lot of my energy justice ideas came from having that house over several years and understanding the energy issues of my tenants. This particular idea came up because one tenant called and asked if I could buy some light bulbs for the house, because she had gone to the local store and they only had, she said, “the squiggly bulbs” [compact fluorescent lightbulbs], and they were too expensive. That price shock for a low-income tenant pushed her to ask me if I could find them at a lower price.
I kept that idea with me for a couple of years. I had been reading the food justice studies looking at the cost of fresh fruit in poor and urban neighborhoods and neighborhoods of color. Then I heard a story about drugstores charging more for medications… in zip codes that were either poor or primarily communities of color. Bringing all those different ideas together, I wanted to try to look at this issue of access and affordability of energy-efficient technology. When we talk about simple ways to improve energy efficiency in people’s houses, if something as simple as a light bulb is going to cost you two times more, then we have some other challenges we need to address.
“About half the stores that we surveyed in poor neighborhoods didn’t even have LED bulbs on the shelf.”
e360: The study also found that even just finding one of these light bulbs in a low-income neighborhood or a neighborhood of color was surprisingly difficult.
Reames: About half the stores that we surveyed in poor neighborhoods didn’t even have LED bulbs on the shelf. It says something about how cities develop and commercial development. Also, if utility companies are benefiting from or being required to do energy efficiency improvements or install energy efficiency measures across their customer base, they need to partner with some of these smaller retail stores in urban areas, instead of just going after the major players like Lowe’s and Home Depot. They, a lot of times, aren’t located in the urban core.
e360: The term “energy justice” is still relatively new. How exactly would you define the concept?
Reames: Energy justice started out as this broad “developed” versus “developing” nation idea, thinking about the responsibility of developed nations to ensure access to modern energy technology in developing countries. But we have seen that there are disparities even within developed countries like the U.S. that should be addressed and should be understood from a justice perspective. When I think about it, I think about fair and equitable access to energy technology, fair and equitable participation in energy decision-making, and also this idea of energy as a basic right, because it’s so important to everything we do in life. That means energy needs to be affordable, and also clean and efficient.
e360: Do you think that policymakers and the energy industry are aware of these disparities?
Reames: One of the interesting things that pushed me into this area is that we have these two large, federal energy assistance programs: the Low Income Home Energy Assistance Program, known as LIHEAP, and the Weatherization Assistance Program, known as WAP. We’ve been doing these since the ’70s and ’80s. In the era of the oil crisis of the ’70s, we recognized this affordability disparity between poor households and non-poor households. Government action at that time was to create these programs that have been long-running. But I think there is a lack of recognition that we need to be a little more innovative and that it can’t just be these federal programs.
e360: Your team examined where the money that utilities spend on improving energy efficiency goes — the distribution to low- versus middle- and high-income customers. In Michigan, the difference was for every dollar spent on low-income customers, utilities spent $4.34 on middle and higher income customers. That’s pretty startling.
Reames: This study was in response to questions that some community groups had about whether funding for energy efficiency was being equitably distributed across the utility service territory. We looked at the two largest investor-owned utilities [in Michigan] that are required by the state to do energy efficiency programs and also have a carve out for low-income households.
Basically, we wanted to look at what is the proportion of low-income households within the utility territory and does that match the proportion of [energy efficiency] funding? We found that a lot of the money goes to higher income households. Sometimes utilities say it’s easier to reach those households; we know that there are challenges reaching low-income households.
Green Upgrade: How California is pioneering “energy justice.” Read more.
In a larger study [looking at utilities in more states], we found that basically each state does it differently. Some states may say, “Ten percent of your investments this year need to go into low-income households, regardless of what percentage or proportion of your customers are low income.” Michigan has no limit or no floor in what utilities have to spend. Some utilities have taken it upon themselves to say, “We’re going to spend more based on our proportion of low-income households.”
There are all these social challenges that play into how these inequities manifest. I’m not saying they’re intentional, but they’re real and I think they need to be recognized. That’s where you see $1 in low-income programs versus $4, because some of those low-income programs are like passing out light bulbs, which are lower cost, versus higher-income households getting rebates on furnaces and hot water heaters and AC units and things like that.
“The UK and other European countries have actually said that energy poverty is a distinct form of poverty.”
e360: How does the U.S. compare to other developed nations in terms of energy equity?
Reames: One of the reasons I got into this work is the “Fuel Poverty” concept in the UK and other European countries. They’ve actually said that [energy poverty] is a distinct form of poverty that has all these other health implications, social implications. They view it as a national issue. It’s codified in law. There are agencies that are working on ways to address this. They have maps, they have research funding for this topic. What that does is allow them to identify a number of households and a target, so they look to reduce fuel poverty by X percent every year. That’s something I would really love here in the U.S.
e360: Polling has shown that minorities and low-income communities are often the most concerned groups of people about the impacts of climate change, yet they also face significant obstacles if they want to go green. What are the biggest challenges?
Reames: One of the first studies I did for my dissertation was looking at the barriers that continue to exist operating the [federal] low-income Weatherization Assistance Program. People often say the first barrier to greening your home is the cost. I wanted to know what barriers still existed once that first one was removed. This project in Kansas City called The Green Impact Zone was using some of the federal dollars through the stimulus to go around and improve the energy efficiency of homes in an urban, low-income, majority African American, 150-block area. One of the big challenges that stuck out was the issue of trust. Minority communities have experienced a lot of predatory financial actions, so anytime this idea of free or low cost, or the idea of someone having to come in your house to do something, there’s a huge barrier there. Diversifying the field of people who do this type of work, so it could be people who look like those who live in the neighborhoods you’re working in could be one way.
Also, using community anchors or trusted community partners. I know some communities have done solar installations on churches, so then you get people in the community that attend the church to learn about solar from a trusted partner.
The second major barrier is some of the institutional structures that make it so difficult for, especially poor people, to access programs. You have to bare your heart and all your information and be completely vulnerable just to be able to get assistance. You have to go from one office to another office, so there’s a lack of coordination between programs. Even with the two federal programs that I was talking about, LIHEAP is operated by Health and Human Services, and WAP is operated by the Department of Energy. Sometimes those programs are operated by the same agency at the state level or even the county level. But because of the reporting structures to the federal government, it makes it difficult for an agency to see that someone’s been getting energy bill assistance through LIHEAP for four years, so maybe we ought to go and use WAP to make that person’s house more efficient.
e360: How much of this energy injustice is related to home ownership? You’ve talked about replacing furnaces and similar actions, but if you rent, you seemingly have no course of action other than to change your light bulbs.
“You can see through the data that there’s a difference in the efficiency between houses owned and houses rented.”
Reames: That’s so true. You can definitely see through the data that there’s a difference in the efficiency between houses owned and houses rented. With the weatherization program, we notice that about 80 percent of those funds go to owner-occupied housing, and about 80 to 90 percent of renters pay their own electricity bill. There’s no real incentive for landlords to participate in these programs, especially as they come with restrictions on raising the rent for a few years. Finding ways to entice landlords to do this is one of the conversations we’re having.
e360: Much of the research that you and your group has done has been based in Detroit or in the surrounding areas. Detroit has been highlighted as the shining example of a Rust Belt community reinventing itself through the lens of sustainability and green innovation. Is everyone benefiting equally in this reinvention?
Energy Equity: Bringing solar power to low-income communities. Read more.
Reames: Based on my assessment, the answer is no. But it takes some time, and that’s always a challenge when you’re trying to revitalize a city, especially when you’ve lost population. It’s like the focus is getting people back in, sometimes less than on the people who have stayed through the devastation. It seems like the tide is turning. I feel like the two things can coexist. You can have new development, but you can also have healthy, thriving, existing neighborhoods. I hope that’s where we’re going.
Green Upgrade: How California Is Pioneering ‘Energy Justice’
California has the world’s fourth largest greenhouse gas cap-and-trade program, which raises billions of dollars for the state. An innovative project is directing some of that revenue to bringing renewable power and energy efficiency to some of the state’s most disadvantaged communities.
Diana Guzman, a 30-year-old widow, works in a peach packing plant in California’s Central Valley. She lives with her two children at Casas de la Viña, a nonprofit housing development for farmworkers in an agricultural region buffeted by poverty and some of the nation’s most polluted air.
Not long ago, the family lived in a drafty, dilapidated ranch building rife with mold and insects. Now, they reside in one of the country’s first farmworker housing projects to achieve zero net energy. The improvements to the complex have included energy-efficient, heat-pump water heaters, low-E windows, and solar carports that produce power for the development. The extensive retrofits are the result of a novel and far-reaching set of state laws that require 35 percent of California’s cap-and-trade auction proceeds to be spent on clean energy projects in disadvantaged communities and low-income neighborhoods.
For Guzman, whose husband was hit by a car en route to the fields, the energy improvements have taken some of the struggle out of life, reducing her monthly utility bill by 75 percent. The savings provide money for school supplies for her kids, clothes, and the occasional family night out at the local pizza parlor. “It makes it possible for me to make it alone,” she says.
“It was the first time we could have someone look holistically at energy consumption in a [housing] project.”
The idea of using funds from greenhouse gas cap-and-trade auctions to address energy inequality — what advocates call “energy justice” — is not solely the province of California. Auction proceeds from the Regional Greenhouse Gas Initiative, a coalition of nine Eastern U.S. states, also support programs that help low-income residents with their energy bills. But while California Governor Jerry Brown has made headlines as President Trump’s resister-in-chief on climate change, his state has also taken the lead on a lesser-known front: confronting the interwoven issues of poverty and pollution by funneling hundreds of millions of cap-and-trade dollars into bringing free renewable energy, energy efficient upgrades, and technical assistance to the dwellings of its most vulnerable citizens.
The main vehicle so far has been the $38 million Low-Income Weatherization Program, (LIWP), which the state estimates has reduced energy use by an average of 44 percent for those participating since the initiative began in 2016. LIWP’s initial focus has been on the places where the vast majority of poor people live — low-income multifamily rental properties like Casas de la Viña.
Home to 56 farmworker families, Casas de la Viña is located in an isolated rural community surrounded by fields where overcrowded and substandard housing has been the norm. The project was developed by Self-Help Enterprises, a nonprofit organization that specializes in affordable housing in the Central Valley, an agricultural stronghold in the state’s midsection where cap-and-trade is not infrequently viewed as a conceit of coastal elites.
Working with the Association for Energy Affordability, a nonprofit energy service provider, Casas de la Viña upgraded its hot water systems, put in interior and exterior LED lighting, replaced old refrigerators and faucets, sealed ductwork, installed heat-pump water heaters (which are about 200 percent more efficient than the old models), and a host of other improvements. Later this month, five carport PV solar arrays will begin generating electricity for residents’ units and the common areas.
“It was the first time we could have someone look holistically at energy consumption in a project,” says Tom Collishaw, Self-Help’s president and CEO.
In a 2016 study, the American Council for an Energy-Efficient Economy, a nonprofit policy and advocacy organization, found that low-income households, particularly among African Americans and Latinos, pay more for utilities per square foot than the average household – by some estimates triple the rate. This can trigger tough choices about whether to “heat or eat,” advocates say.
Though California, recently became, to much fanfare, the first state to require all new homes to have solar power, the move seems unlikely to bridge the green divide – particularly in communities of color. Energy insecurity for the poor is tethered to numerous structural barriers, including low home ownership rates, limited disposable income, and shoddy and energy inefficient housing conditions.
One of the challenges is gaining the trust of the population the cap-and-trade dollars are intended to serve.
In high poverty areas, houses can become financially difficult to maintain and thus deteriorate, exposing occupants to a variety of negative health impacts. Improper ventilation heating, and cooling can affect indoor air quality, giving rise to moisture, mold, mildew, and a variety of pests that can exacerbate respiratory diseases such as asthma.
Living in drafty, poorly insulated spaces also makes children and other sensitive people more susceptible to air pollution, especially in areas like the Central Valley, which has some of the nation’s worst air quality. Simple changes – the use of an air conditioner instead of an evaporative “swamp” cooler, for instance — also help protect residents from extreme heat events that are likely to be more frequent and more intense due to climate change, according to the California Department of Public Health.
Since taking effect in 2013, California’s cap-and-trade program has raised more than $6.5 billion, and it is now the fourth largest in the world (the European Union’s program is the largest). To further California’s goal of reducing greenhouse gas emissions to 40 percent below 1990 levels by 2030, state law directs 35 percent of greenhouse gas auction proceeds to benefit low-income neighborhoods and disadvantaged communities. To identify those communities, the state Environmental Protection Agency developed a public mapping tool called the Cal EnviroScreen, which scores each of the state’s 8,000 census tracts based on environmental and socioeconomic indicators, including pesticide use, contaminated drinking water, and educational levels. There are currently 2,007 designated disadvantaged communities (known as “DACs”), where cap-and-trade investments have ranged from rebates on electric vehicles to subsidizing fleets of electric rural school buses.
These initiatives serve to “democratize climate policies and benefits,” says Ethan Elkind, director of the climate program at the Center for Law, Energy & the Environment at the University of California Berkeley School of Law. “Energy efficiency is really the first step we should be taking, so investment in these programs makes sense.”
Still, there are plenty of challenges in implementing LIWP projects on the ground, not the least of which is gaining the trust of the population the cap-and-trade dollars are intended to serve. A case in point is the single-family weatherization program in East Palo Alto, a heavily Latino city with a poverty rate of 16.6 percent that is a mere 2.5 miles from Facebook’s Frank Gehry-designed Silicon Valley headquarters. “It’s ‘am I going to get a bill?’” says Joaquin Narvaez, a home repair manager with the community organization El Concilio of San Mateo County, which is partnering with experts from Build It Green, the nonprofit organization that administers LIWP in East Palo Alto. “We have to assure people that this is on the up and up.”
The process begins with an energy model of each house, which helps calculate whether the potential energy savings will justify the state’s investment. Education is a major component. “Behavior is a big part of energy efficiency,” notes Russell Bayba, a Build It Green project manager.
Two-thirds of East Palo Alto’s 28,000 residents are immigrants, both legal and undocumented. In some sections of the city, the Bay Area’s tight housing market has led to the unpermitted conversion of garages and attics into rooms, which makes assessing energy needs tougher. “We’ve had families say ‘no’ to solar the day before installation because there were people living in the garage,” notes Violet Saena, communities program manager for Acterra, an environmental nonprofit in Palo Alto. “It’s become a problem for our work.” The national immigration crackdown, Saena says, “has added another layer of fear.”
“I’d heard about solar on the TV but wasn’t interested because I couldn’t afford it,” says a woman who has benefited from the program.
Franciel Branch, a 78-year-old widow, found out about the program through her church. “I’d heard about solar on the TV but wasn’t interested because I couldn’t afford it,” Branch says. Through LIWP, she has gotten an energy efficient refrigerator, new lighting, and – thanks to a group of Habitat for Humanity volunteers – will soon have a new roof that can accommodate photovoltaics and a solar hot water heater.
Solar PV systems for multifamily affordable housing in California will get a boost when a program approved by the state Public Utilities Commission goes online later this year. The program will provide $100 million in annual rebates – a whopping $1 billion over 10 years — that will allow low-income apartment tenants, in addition to property owners, to directly benefit.
On the East Coast, some of the nine New England and Mid-Atlantic states that are part of the Regional Greenhouse Gas Initiative (RGGI) are also using cap-and-trade auction proceeds to assist low-income residents and communities. According to Ben Grumbles, Maryland’s Environmental Secretary and the RGGI’s chairman, each state has discretion over how the money is spent and “determines how to define environmental and energy justice.” In Delaware, for example, 15 percent of RGGI proceeds support low-income weatherization and provide heating bill assistance to low-income households. In Maryland, half the RGGI revenue goes to grants helping eligible residents pay their monthly electricity bills. New York’s Affordable Solar program offers extra solar installation incentives to those earning 80 percent or less of area median income.
Last year, RGGI, which was founded in 2009, tightened its cap on power plant emissions through 2030, which is expected to increase its auction revenue. The Natural Resources Defense Council and other environmental groups are urging that more of that money be directed to clean energy programs in low-income communities.
In California, where LIWP and other programs are subject to renewal by legislators, the most passionate advocates may be people like Jean Soares, who lives in North Richmond, a Bay Area community long plagued by poverty and toxic industrial emissions.
As subsidies wane, market forces drive the growth of renewables. Read more.
Soares and his wife Giovana Sargi, a house cleaner, “couldn’t afford 30 grand” to put in solar on the new house he built, he says, so he began searching for grants. He eventually connected with GRID Alternatives, a nonprofit that installs solar panels for LIWP.
The energy savings have inspired the couple to purchase an electric car, which they charge at home for free and allows Sargi to use the carpool lanes to get to work in San Francisco, a major time saver. “It’s helped us big-time,” Soares says. “I don’t understand why more people don’t jump on it.”
Energy Equity: Bringing Solar Power to Low-Income Communities through Community Solar
Millions of Americans lack access to solar energy because they cannot afford the steep upfront costs. Now, more than a dozen states are adopting “community solar” programs that are bringing solar power and lower energy bills to low-income households from New York to California.
BY MARIA GALLUCCI • APRIL 4, 2019
Isbel “Izzy” Palans lives in a small cabin nestled among mountain peaks and towering trees in the Colorado Rockies. Her home is often shaded and, during the long winters, buried under heaps of snow. Her monthly utility bills show credits for solar electricity production, but no solar panels are affixed to her roof. Instead, the power comes from a solar array some 60 miles away in a nearby valley.
Last year, the panels nearly slashed her energy bill in half. “I’ve been thrilled,” said Palans, a 76-year-old retired waitress who relies partly on Social Security benefits to make ends meet.
Palans is a subscriber to a 145-kilowatt solar array project run by Holy Cross Energy, a rural utility cooperative. Built with state funding, the program provides solar credits to more than 40 low-income households in western Colorado that otherwise wouldn’t have the financial or technical means to access renewable energy. The venture is just one of a growing number of so-called “community solar” projects across the United States focused on delivering renewable energy — and the cost-savings it can provide — to low-income households, from California to Minnesota to Massachusetts.
Community or shared solar is broadly defined as a project where multiple participants own or lease shares in a mid-sized solar facility, usually between 500 kilowatts and 5 megawatts, and receive credits that lower their monthly utility bills based on how much power the facility delivers to the grid. The sector has emerged as a “bright spot” in an otherwise sluggish U.S. solar market, outpacing growth in new residential and utility installations that has been stymied by fading federal and state incentives and the Trump administration’s import tariffs on solar equipment. U.S. community solar capacity has more than quadrupled since 2016, increasing from more than 300 megawatts to nearly 1,400 megawatts today. That is enough electricity to power roughly 266,000 households. Analysts say they expect another 600 to 700 megawatts to go online this year.
Less than half of U.S. community solar projects have any participation from low-income households.
The vast majority of community solar subscribers to date, however, have been businesses, universities, government agencies, and higher-earning households — all of which can generally pay the steep project enrollment fees or meet financial requirements. Meanwhile, those who could benefit the most from access to renewable energy and lower utility bills — low-income residents — have largely been left out of the rise in community solar, analysts say.
Less than half of U.S. community solar projects have any participation from low-income households. Of projects that do include lower-earning families, only about 5 percent involve a sizable share, or more than 10 percent, according to a November 2018 survey.
Recently, states and industry experts have been working to change these dynamics. A dozen states and the District of Columbia have developed, or are developing, a variety of mandates, financial incentives, and pilot programs to make it easier for low-income participants to access shared solar. About 50 million households, or 44 percent of the U.S. total, fall into this income category. Nonprofit developers are also trying new approaches, such as eliminating income and credit score checks for low-income customers, and offering short-term contracts for renters.
“Community solar really should serve the community, and have a diverse subscriber pool with each project,” said Marta Tomic of Vote Solar, a nonprofit in Oakland, California. “If we have this goal of empowering customers, of being able to provide them savings on their electricity bill, we need to close that gap [in participation].”
New Jersey is moving ahead with a pilot program to build around 75 megawatts of community solar projects a year — 40 percent of which will be dedicated to serving low- or moderate-income customers. Illinois’ new $30 million Solar for All program waives low-income participants’ upfront costs to join community solar projects and limits monthly fees. Colorado’s 2010 shared solar law, one of the first in the country, requires developers to reserve at least 5 percent of a projects’ subscriber pool for low-income participants.The state also awarded $1.2 million in grants to build eight low-income community solar projects, including the one Palans is enrolled in.
Washington, D.C.’s new Solar for All program, which aims to help 100,000 low-income households slash their energy bills in half by 2032, recently awarded $13 million in grants for community solar and similar projects. And in New York state, a new initiative will cover the enrollment fees and other costs for 7,000 low-income households to join community solar projects. The New York State Energy Research and Development Authority recently awarded contracts for nine community solar projects with a combined capacity of 26.4 megawatts, one-third of which will be reserved for cost-free subscriptions.
“For equity reasons… there’s a basic desire to use community solar as a way to reach groups that wouldn’t otherwise participate in solar,” said Kenneth Gillingham, associate professor of environmental and energy economics at Yale University’s School of Forestry & Environmental Studies. “There is still a market that’s untapped in the low- to moderate-income communities.”
In Colorado, nearly 400 households enrolled in low-income solar projects save between 15 and 50 percent on their electricity bills.
Green Upgrade: How California is pioneering “energy justice.” Read more.
While community solar initiatives vary widely, they tend to share two overarching policy goals. First, states and cities want to reduce living expenses for low-income households, which on average spend 8.2 percent of their income on energy bills — about three times more than moderate- to high-income households. For decades, government agencies have helped residents reduce energy costs by insulating their homes, replacing leaky windows, or installing energy efficient appliances. Analysts say that in this way, community solar serves as an extension of existing energy conservation and cost-savings programs.
In Colorado, for example, the nearly 400 households enrolled in the state’s eight low-income solar projects save between 15 and 50 percent on their electricity bills, amounting to average annual savings of $382 per household, the Colorado Energy Office found. In Washington, D.C., nearly 100 households are each saving $250 a year on their electric bills thanks to a 182-kilowatt project by New Partners Community Solar, a nonprofit developer that offers free subscriptions to low-income residents.
Groundswell, a nonprofit community solar developer, is installing 366-kilowatt’s worth of shared solar on houses of worship in Washington, D.C., which it said will help more than 120 low-income households in the city slash their utility bills in half, with about $500 in annual savings. The first project is set to break ground in April at the DuPont Park Seventh Day Adventist Church. Pastor Marcus Harris said leaders initially planned to install rooftop solar for the church’s own use, but decided to host the community solar project to spread savings to the neighborhood. “We are always looking for ways to impact the quality of life for those that are in this segment of the District of Columbia and wherever we can,” he said.
Shared solar projects also ensure that it’s not just homeowners with suitable rooftops who can access renewable energy. Nearly half of U.S. households — totaling more than 154 million people — aren’t able to host their own solar arrays because they lack suitable rooftop space or rent their homes. Millions more simply can’t afford to spend tens of thousands of dollars to lease a solar array or pay the enrollment or monthly subscription fees for a conventional community solar project.
“Just because you’re not affluent doesn’t mean you don’t care about the environment,” said Brandy Toft, environmental deputy director for the Leech Lake Band of Ojibwe in Minnesota. “It doesn’t mean you don’t have that drive to do what you can do to help.” The tribal government recently installed a 200-kilowatt solar array on its reservation, using a $490,000 state grant and donations from foundations. Revenues from the solar electricity should help reduce the energy bills of about 100 low-income families, Toft said.
Beyond reduced bills and increased access, proponents say shared solar arrays can provide additional benefits. An array that can interconnect directly to the grid’s distribution network eliminates the need for additional transmission infrastructure, which can be costly, and avoids electricity losses that happen along long-distance power lines, the Rocky Mountain Institute, a sustainability think tank, said in a 2018 paper. Community-scale systems also occupy an “economic sweet spot” when they’re small enough to efficiently link to the local grid, yet large enough to achieve competitive electricity rates.
If coupled with energy storage systems, local solar projects can also supply backup power if the grid collapses during a storm or natural disaster. At the Maycroft Apartments, an affordable housing complex in northwest D.C., rooftop solar panels and batteries will soon supply three days’ worth of emergency power to a communal “resilience room,” where residents can charge cell phones and refrigerate medications. Under normal conditions, the array will connect to the grid, generating utility bill credits for low-income customers in the neighborhood. New Partners Community Solar, the lead developer, said the $300,000 project will come online this month.
Some developers also incorporate job training and hiring into their community solar projects.
Some solar developers also incorporate job training and hiring into their projects. In Minnesota, the nonprofit developer Cooperative Energy Futures works with groups like Renewable Energy Partners to provide on-the-job training for local workers, who could go on to get employment in one of the nation’s fastest growing industries. One of the first installations, a 204-kilowatt shared solar array, is atop Shiloh Temple International Ministries, which sits within a majority African American neighborhood in North Minneapolis where opportunities for employment are scarce. Renewable Energy Partners says it plans to train up to 200 workers in the city.
Brad Boston, a solar contractor in D.C., has so far trained about a dozen people on job sites, including some just released from jail. His firm, Suncatch Energy, works with Groundswell and other developers to install shared solar projects across the city. Boston said he strives to involve more people of color in technical fields such as electrical engineering, a trade that runs four generations deep in his family.
“With all the billions of dollars that are going out [into the economy] with solar, there’s a need to reach people who are most disenfranchised with these work opportunities,” he said.
ALSO ON YALE E360
Utilities grapple with rooftop solar and the new energy landscape. Read more.
On average, according to a recent study by researchers at Tufts University and the University of California, Berkeley, black- and Hispanic-majority census tracts have significantly fewer rooftop solar projects than white-majority or no-majority census tracts. For low-income households in particular, said Tom Figel, head of community solar at GRID Alternatives in Oakland, the push for state and local community solar policies is needed to overcome the financial and technical hurdles that prevent more inclusive participation.
“We know the market won’t serve these customers on their own,” he said.
Maria Gallucci is a freelance science journalist in New York City. She was the 2017-18 Energy Journalism Fellow at the University of Texas at Austin, where she covered clean energy development in the world of maritime cargo shipping. Maria was previously a staff reporter for Mashable, InsideClimate News, International Business Times, and Mexico City press. MOREABOUT MARIA GALLUCCI →
Patricia Leigh Brown, a former staff writer for The New York Times, writes about culture, community, and related issues in California. In addition to the Times, she has written for Politico, The Christian Science Monitor Magazine, and other publications. MOREABOUT PATRICIA LEIGH BROWN →
Katherine Bagley is the managing editor of Yale Environment 360. She was previously a reporter for InsideClimate News covering the intersection of environmental science, politics and policy, with an emphasis on climate change. She is co-author of the book “Bloomberg’s Hidden Legacy: Climate Change and the Future of New York City.” MOREABOUT KATHERINE BAGLEY →
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GTM Research projects that rooftop solar’s growth in the coming years will rebound to a healthy 10 to 15 percent annually.
A few utilities are taking tantalizing first steps into the new realm of decentralized, electricity generation.
The truth is that the combat analogy is misleading. Some utilities do actively oppose rooftop solar. But others have been immobilized by the ongoing paradigm shift toward clean, renewable energy. And a few utilities — most notably, in New York, California, Hawaii, and Minnesota — are taking tantalizing first steps into the new realm of distributed, or decentralized, electricity generation.
“The broad characterization of all utilities acting monolithically is highly unfair, highly unsophisticated,” said Tanuj Deora, executive vice president at the Smart Electric Power Alliance, whose members are utilities learning to navigate the renewable energy arena. Most utilities are moving slowly, he says, “not because they have some hatred for rooftop solar,” but because the task of adjusting to the coming renewable energy era is profoundly complex.
Both utilities and their regulators have been slow to recognize the tidal wave coming at them. For more than a century, utilities had learned how to send electrons in one direction, usually safely and reliably, from large, centralized fossil fuel and nuclear power plants over transmission and distribution lines to businesses and homes.
Now, abruptly, their networks are being asked to accommodate electrons flowing in two directions, to and from consumers, without compromising safety and reliability, as a new generation of electronic devices enters the market. These “distributed energy resources,” or DERs, can be stationed in or near homes and businesses. They include not just rooftop solar, but wind power, batteries, electric vehicles, smart meters, smart water heaters, smart thermostats, on and on. They promise not just emission-free, fuel-less electricity, but far greater energy efficiency, thus reducing consumer costs and environmental damage. Their expanding use increasingly will determine how the grid functions.
Everything about utilities, from their rate structures to their business models to their corporate cultures, is on the cusp of change.
Rooftop solar has inspired so much contention chiefly because it’s the first DER to enjoy widespread use, experiencing “the biggest, fastest adoption of these technologies,” Jesse Jenkins, a contributor to a Massachusetts Institute of Technology 2016 report, “Utility of the Future,” said in an interview. “It’s a bellwether of the broader issues that we’re going to be dealing with in the next decade.” Everything about utilities, from their rate structures to their business models to their corporate cultures, is on the cusp of change.
For all the conflict surrounding rooftop solar, solar energy last year generated just under 1 percent of U.S. electricity, and utility-scale solar farms have three times the generating capacity of residential solar installations. That disparity is likely to grow.
While the shift to rooftop solar and other distributed energy sources presents a major technological challenge to utilities, their current business models provide them no incentive to meet it. According to the models, utilities are allowed to use ratepayer revenue only to reimburse themselves for the costs of operating the grid. Profits accrue to them as a designated percentage— usually 7 to 10 percent— of their capital expenditures on infrastructure investments, from new plants to new transmission lines.
Rooftop solar is in the vanguard of DERs that promise to upend this business model. Not only do rooftop solar and other DERs divert customers from the utilities, these innovations defer infrastructure expansion by producing decentralized, renewable energy or by improving energy efficiency, thereby threatening utility profits.
And as more and more customers install solar panels, utilities earn less and less revenue, which means that rates for remaining customers must increase — which drives even more of them to rooftop solar. As battery storage becomes cheaper, some customers will be tempted to leave the grid entirely. A paper published by the Edison Electric Institute in 2013 famously warned of this vicious circle, giving rise to the expression “utility death spiral.”
Hemmed in by their business model and regulators who expect adherence to it, many utilities have concluded that they have only one alternative: stop rooftop solar. In this battle, utilities have sometimes behaved oafishly, sabotaging themselves.
In the battle over rooftop solar, utilities have sometimes behaved oafishly, sabotaging themselves.
Florida utilities, for example, spent more than $21 million last year in support of a proposed state constitutional amendment they touted as a way to expand rooftop solar, but that actually contained provisions to kill it. Three weeks before the election, the policy director of a utility-supported think tank was recorded as he explained the deception at an energy conference. The resulting revelation helped defeat the amendment. Six months later, the Florida legislature unanimously passed laws hastening rooftop installations.
Similarly, in 2015 Nevada’s Public Utilities Commission, under pressure from the state’s largest utility, NV Energy, announced drastic changes in rooftop solar rates that caused installers to stop doing business in the state. Even worse for rooftop solar owners, the rates were made retroactive, so that customers who’d been enticed into purchases with generous state rebates and the promise of unchanging rates over their contracts’ 20- or 30-year lifetimes found that they’d been victimized by a bait-and-switch: Under the new rates, they would pay more for electricity than if they’d never installed solar, even though they generated most of their own electricity. But the utility interests underestimated rooftop solar’s appeal. The resulting protest was so strong that in June, Gov. Brian Sandoval, a Republican, signed legislation that restored most of the previous rate structure and enabled rooftop installers to resume operations.
For utilities, the issue isn’t solar energy per se, which they like as long as they can sell it themselves. From their perspective, utility-scale solar has some major advantages over rooftop: not only does it enable utilities to keep their customers, but thanks to economies of scale and lower installation expenses, its electricity costs one-third to one-half as much as rooftop’s, according to Michael O’Boyle, a grid expert at Energy Innovation, a San Francisco-based policy research firm.
Equally significant, the value of electricity generated by solar varies greatly depending on time of day and location. The plentiful electricity generated on rooftops at mid-day, when the sun is highest, is much less valuable than late-afternoon electricity, which feeds the daily demand peak formed when both homes and businesses are consuming energy. And the first rooftop solar installation in a given location is far more valuable than the hundredth: the first one may help meet mid-day electricity demand, but the hundredth may help produce a surplus, in which case its chief impact is straining the system.
These nuances usually aren’t captured in “net metering,” the common, but flawed rate structuring system for rooftop solar owners that has been the focus of most utility-versus-solar company conflicts. Under net metering, utilities compensate rooftop electricity contributions to the grid at an unvarying rate, usually close to electricity’s average retail cost, roughly 11 cents per kilowatt-hour. Utilities argue that compensation should be lower, near electricity’s wholesale cost of 3 or 4 cents per kilowatt hour, because rooftop owners benefit from using the grid without paying for it. Solar companies say compensation should be at least as high as the retail rate because rooftop solar provides valuable unacknowledged benefits such as generating pollution-free energy, eliminating grid transmission losses when electricity is sent long distances, and avoiding the costs of building more power plants and transmission lines.
Net metering does a poor job of reflecting rooftop solar’s varying value depending on the time and location of its generation.
But what is usually lost in the dispute is that no matter what rate a utility sets, net metering fosters energy inefficiency because it does a poor job of reflecting rooftop solar electricity’s varying value depending on the time and location of its generation. At the moment utilities lack the technology even to identify sites where rooftop installations would be most valuable, so they have no way to formulate energy-efficient rates. And without business models that reward them for installing tools to evaluate the value of rooftop locations, they have little incentive to act. In this way, utilities aren’t so much villains as captives of their often somnolent regulators.
“The regulators,” said GTM Research’s Kann, “are the keys to this whole transition.”
Regulators in a few states are beginning to reshape policies accordingly. California’s Public Utilities Commission is performing the delicate task of supporting the rooftop solar industry while phasing out net metering. Two years ago it introduced time-of-use rates for homeowners with new rooftop solar panels, and will follow up in 2019 with rates that also take location into account.
Minnesota’s Public Utilities Commission fostered the growth of rooftop solar’s close cousin, community solar (which typically involves placing solar arrays over parking lots and agricultural fields) by abandoning net metering. Instead, it devised a methodology for calculating a fair rate for electricity fed back to the grid by adding up all the components of community solar’s value, including the so-called “social cost of carbon” — the dollar benefit from reduced climate change impacts and air pollution.
“What we found is that every year, the value of community solar has been higher than the retail electricity price,” said John Farrell, an energy researcher at the Minneapolis-based Institute for Local Self-Reliance. “Which means that customers who produce solar energy were giving more value to the grid than they were receiving in net metering payments.”
“The utilities are going to have to either come to the table or they’re going to go out of business,” says one expert.
New York’s Public Service Commission has crafted the most ambitious of state renewable energy regulatory shifts. Its Reforming the Energy Vision, or REV, has begun moving away from typical utility compensation schemes including net metering toward programs that reward innovation. Its first venture was Consolidated Edison’s Brooklyn-Queens Neighborhood Program. Faced with increasing electricity demand in the area, ConEd first considered a conventional solution, building a new substation at a cost of $1.2 billion. Then it asked outsiders for alternative proposals, and selected one that meets the increased electricity demand with distributed resources, including rooftop solar — at a cost of $200 million. Under REV provisions, the utility’s reward for fostering electricity efficiency was earning as much profit as it would have if it had installed the substation.
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“It’s not just the utilities that need to change their business model,” Richard Kauffman, New York’s “energy czar” and REV’s leader, said in a telephone interview. “One of things we’ve been pleased about is the way that the solar industry has demonstrated a willingness to change its business model. The solar sector is beginning to view the utility not as the enemy, but as a customer and partner, in just the way that the utility needs to start viewing the solar industry.”
In the long run, utilities are likely to come around, since the rapidly decreasing costs of rooftop solar and other DERs and the expected emergence of cheap batteries promise consumers a chance to leave the grid entirely. “If customers have the choice to cut the cord,” said the ISLR’s Farrell, “the utilities are going to have to either come to the table or they’re going to go out of business.”
Jacques Leslie is a regular Los Angeles Times op-ed contributor. His book on dams, Deep Water: The Epic Struggle Over Dams, Displaced People, and the Environment, won the J. Anthony Lukas Work-in-Progress Award for its “elegant, beautiful prose.” He recently published an ebook, A Deluge of Consequences, that portrays a project in Bhutan to counter flooding caused by climate change. MOREABOUT JACQUES LESLIE →