Imagine a city-funded solar program aimed at cutting utility bills in half for 100,000 low- and moderate-income (LMI) households, while helping to ensure that 10% of local electricity comes from solar projects located within a small, but densely populated urban area.
Tommy Wells, director of Washington, D.C.’s Department of Energy & Environment (DOEE), has spent the past four years turning this ambitious thought exercise into Solar For All, a portfolio of projects now helping the city reach its 100% renewable energy target by 2032.
“What we did was we put it out to bid,” Wells recalled during a recent webinar on the program, which was launched in 2016. “We said to the solar developers, to the community, whoever wanted to bid on it, ‘This is what you have to achieve; you have to show us how you are going to deploy solar.’ We ended up with nine successful bidders, and they all came up with creative ways to provide the equivalent of half a year’s power bill to residents.”
Among those nine are well-established organizations, such as low-income installer GRIDAlternatives, as well as startups like New Partners Community Solar, a local business formed by two lawyers, now putting community solar on commercial office buildings.
As of the end of 2019, the program has installed around 8 MW in the city, halving utility bills for just under 9,000 LMI households. For example, one rooftop installation helped D.C. resident Lena Nchako cut electric bills for the home she has lived in for 18 years from around $450 per month to $100.
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Why 30 Million Solar Rooftops Should Be In the Next Relief Bill
BY JOHN FARRELL | DATE: 10 APR 2020
As the federal government looks to a second (or even third) stimulus bill, Congress should consider a huge opportunity to pay Americans that pays back: solar rooftops. Somewhat more than one in three home or business rooftops in America is suitable for solar: sunny with sufficient space to host a few panels. By investing $450 billion in rooftop solar, the federal government could slash energy bills for Americans, cut air pollution, and create over 3.7 million jobs. The government could also get paid back.
Rather than compounding the problems of the most recent stimulus bill, which was tilted heavily in favor of large corporations, this solution addresses local needs — for jobs, lower energy bills and sustainable energy sources — while promoting equitable, thriving American communities.
A Proposal That, Over Time, Pays for Itself?
A typical, 5-kilowatt home rooftop solar project has 17 solar panels, producing about 60 percent of a home’s electricity use in an average year, and costs $15,000. The federal government would directly pay solar installers for a project, starting with any customer or property serving customers that are in the lowest income quintile –– those that pay the highest portion of their income for electricity. Two-thirds of the total funds invested, $300 billion, would be reserved for residential home or apartment projects where the project directly lowers the energy bill of the customer.
The other third of the $450 billion would support solar for independent, small businesses (including nonprofits, but no corporate franchises or chains). Priority would be made for businesses like restaurants hardest hit by the coronavirus epidemic.
Already, the federal government provides a tax credit that until last year was 30% of the project’s cost. For all projects, this portion of the project cost will be paid as a cash grant to avoid any complex tax paperwork. For projects serving low-income customers, an additional 50% of project costs will be forgiven. The remaining costs will be gradually repaid to the government through the customer’s utility bill. The repayment mechanism, using the Pay As You Save model, will ensure that a customer’s energy bill savings always exceed the payments back to the government. This financing mechanism will also allow homes and businesses to cover the costs of energy-efficiency improvements to further lower energy bills.
Using this model, the government would likely recoup half of its $450 billion investment directly. Additionally, it would save Americans $20 billion per year in electricity costs. In just over 10 years, the combination of repayments and energy savings would exceed the program’s initial cost.
How would the work get done?
Building this much solar won’t be easy, but it will benefit the millions of Americans losing their jobs. At its peak, the rooftop solar industry has installed approximately 5 gigawatts of solar in a single year on homes and businesses. To do the equivalent of 30 million home rooftops in five years would require doubling the size of the industry each year. In 2020, the industry would do 5 gigawatts. By 2024, it would do 80 gigawatts in a single year. Over five years, it would create over 3.7 million jobs. As with installations, job training programs should prioritize low-income and historically underemployed Americans. This provides a triple benefit: enough clean electricity to serve 5 percent of U.S. electricity needs, savings on welfare programs, and a stable income for millions of families.
Building Wealth and Resilience
Unlike loans and grants to large corporations, putting solar on Americans’ rooftops (and insulation in their walls) puts money in their pockets. It also builds wealth, as studies show that homes with solar tend to recoup a portion of the installation cost in a higher home value. And by focusing on the lowest income folks first –– those will turn around and spend it quickly –– the program gets more money back into the economy faster.
The program can also build resilience. Solar companies are increasingly selling batteries along with rooftop panels, allowing customers to weather grid outages from wildfires or hurricanes. By including energy storage, the government can help communities be better prepared for the next disaster.
The government’s first relief bill bailed out big business. This next round has a chance to do something bigger for America, one rooftop at a time.
This article originally posted at ilsr.org. For timely updates, follow John Farrell on Twitter, our energy work on Facebook, or sign up to get the Energy Democracy weekly update.
