Bringing the Benefits of Solar+Storage to Low-Income Communities: A Guide for States and Municipalities

Author: Todd Olinsky-Paul, Clean Energy Group | Projects: Clean Energy States Alliance, Resilient Power Project

Marcus Garvey Village solar array. Photo courtesy of L+M Development Partners, Inc. In recent years, some states and environmental NGOs have begun to focus on low-income community access to clean energy technologies such as solar PV. Low-income households account for about 20 percent of the nation’s residential energy use, and the energy cost burden weighs more heavily on these households than on others. But until recently, the low- and moderate-income (LMI) market was largely overlooked. Several barriers, including low rates of home ownership and a perception of higher investment risk, have meant that these communities are the last to benefit from new energy technologies.

The new focus on finding ways to put solar into LMI communities is a good one. But Clean Energy Group and the Clean Energy States Alliance (CESA) are looking ahead to make sure that these communities also have access to the combination of solar PV with energy storage technologies (solar+storage). The reasons are simple: while solar alone is good, the combination of solar+storage can provide more benefits, and the addition of storage may help to safeguard against the devaluation of solar, for example due to declining net metering rates or the imposition of time-of-use pricing. In the case of multifamily housing and commercial properties, the addition of energy storage may even provide a faster payback than solar alone, because it can be used to manage demand charges. Resilient power, defined as the ability to self-supply with electricity when the grid is down, is another key benefit provided by the addition of storage.

Because LMI communities are most in need of the many benefits solar+storage can provide, it is important that this combined technology become accessible to them sooner rather than later. To help state and municipal energy agencies support the development of solar+storage in LMI communities, CESA has published a new report, Solar+Storage for Low- and Moderate-Income Communities: A Guide for States and Municipalities. While several previous reports have explained the economic and power resiliency benefits of solar+storage, this new report focuses on the tools states and municipalities can use to support solar+storage in LMI communities. It is one of six program guides CESA is producing as part of its Sustainable Solar Education Project, which is supported by the U.S. Department of Energy SunShot Initiative.

Many of the tools outlined in the report will be familiar to state and municipal agencies, which are accustomed to employing grant and rebate programs, utility procurement targets, financing programs and tax incentives to support clean energy measures. However, energy storage, and the combination of battery storage with solar, is a relatively new technology, with new applications. Providing LMI communities access to these technologies will require more innovative use of the policy, program and finance tools in the public policy toolkit.

One of the guide’s conclusions is that because establishing new state or municipal programs to support new technologies can be challenging – especially when budgets and staff bandwidth are stretched by many competing interests – it may be faster and more effective to add electric energy storage (batteries) as an eligible technology under existing programs that support solar PV. Solar incentives, energy efficiency programs, and renewable or alternative energy portfolio standards already exist in many states; these programs are a natural fit for energy storage, because storage can work in tandem with solar and other technologies already supported by these programs.

For example, the proposed Massachusetts SMART solar incentive would include a new adder for solar installations that include energy storage; the larger the storage component relative to the solar component, the larger the storage adder the project would receive. The SMART program also offers adders for projects in low-income communities for rooftop solar, for community solar, and for brownfield redevelopment – all of which can help to target deployment toward LMI customers. And these adders are stackable, meaning that a single project can qualify for numerous adders.

Energy efficiency programs represent another important opportunity to leverage existing programs in support of solar+storage in LMI communities. Often, energy efficiency program budgets dwarf other incentive and grant programs supporting renewables and storage. For example, Massachusetts budgeted over $680 million for energy efficiency in 2014. In order to allow energy storage developers access to this resource, the 2016 State of Charge report, which analyzed opportunities for storage deployment in Massachusetts, recommended that energy storage be included as an eligible technology in future energy efficiency plans.

It’s important to note that adding energy storage into existing clean energy incentive programs may sometimes require changes in the way program goals are defined. For example, including storage as an efficiency measure may require energy efficiency program administrators to adopt a new, more expansive definition of efficiency. Rather than simply defining efficiency as using less energy, a broader definition of efficiency could include reducing the customer’s cost of electricity; expanding the use or value of distributed renewably-generated electricity; and shifting electricity purchases to off-peak times, which can lower costs for the consumer as well as lowering costs and emissions for the regional grid. Such adjustments may also require states and municipalities to produce analysis showing how storage can enhance and expand the value of solar in meeting program objectives.

Another take-away from the guide is the importance of supportive financing. This was demonstrated in solar PV’s progression from a niche technology to a mainstream, commercial product. In addition to sharp decreases in manufacturing costs, the rise of third-party solar leasing contributed to the dramatic increase in deployment of rooftop solar in the U.S. It is now possible, in some places, to acquire a rooftop solar system at no initial cost, and to start realizing energy cost savings in the first month.

However, these solar financing opportunities have largely been limited to affluent customers with high credit ratings, who own their own properties. It has been much more difficult for LMI households and businesses to access solar financing.

If states and municipalities wish to provide the benefits of solar+storage to LMI communities at scale, and move markets beyond demonstration projects supported by government grants, it will be important to support new financing mechanisms that can overcome the barriers that have traditionally prevented clean energy investment in these communities. In general, this means using public resources to provide financing directly or to lower risk for other financiers. States and municipalities have many innovative financing options that can be employed, including various type of bond finance, clean energy financial institutions such as green banks, public-private ownership structures, and credit enhancements.

A third lesson from the guide is the important role of utilities in public clean energy policies and programs. Utilities are necessary partners due to interconnection requirements, but they also bring important resources to the table. In addition to their ability to develop projects directly in LMI communities, utilities can also help to create markets through net metering, demand response programs, and contractual partnerships with customer- and third-party-owned solar+storage systems. If such partnerships are properly structured, the utility can benefit from grid services that energy storage can provide from behind the meter, such as reduced demand during peak periods, which can lower utility cost obligations for capacity and transmission services. This is a model that is being pioneered by Green Mountain Power in Vermont

There are numerous ways for states to leverage utility resources to support solar+storage in LMI communities. One direct method is to establish a utility procurement mandate, as was done in California and Oregon, and is currently being discussed in Massachusetts. Such a mandate can include carve-outs for behind-the-meter systems, and incentives for LMI systems. Utilities can also support the market for customer-sited solar+storage through energy efficiency and demand response programs. Municipal utilities in particular can often allocate resources to support municipal goals, such as providing resilience and energy assurance to LMI communities, while simultaneously using solar+storage resources to reduce ratepayer costs. A good example is the Sterling Municipal Light Department project in Massachusetts.

As can be seen from the above, providing the benefits of solar+storage to LMI communities can be challenging, and success may require a multi-pronged approach. States and municipalities would do well to adopt a comprehensive suite of programs. Grants, rebates and incentive programs, utility procurement, financing support, open markets regulations, technical assistance and soft cost reductions are all important tools to expand the market for solar+storage technologies to all consumers.

For a more thorough discussion of these and other policy tools, download the guide. You may also view the CESA webinar on this report in CESA’s webinar archive.

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This article was also published in Renewable Energy World.

Resilient Power Leadership Grants Help Low-Income Communities Access Solar+Storage Solutions

Author: Maria Blais Costello, Clean Energy Group | Project: Resilient Power Project

LINC Housing - Mosaic Gardens at Monterey Park, CAThere are hundreds of resilient solar+storage projects now in development or deployed in the U.S., as more companies and consumers become aware of the benefits that solar+storage systems can offer. Unfortunately, very few community-based organizations have the internal capacity to move solar+storage projects forward or to advocate for policies that could lead to greater resilient power deployment in their communities. This is particularly true for nonprofits that serve low-income communities, which are most in need of cost savings and resiliency benefits from solar+storage, but often have limited resources available to access new technology solutions.

To address the unequal distribution of clean energy technologies, Clean Energy Group has launched the Resilient Power Leadership Initiative, a component of the Resilient Power Project, with the goal of seeding long-term, community-led programs that further advance energy equity and environmental justice. Through this initiative, Leadership Grants have been awarded to seven nonprofit organizations working in the areas of affordable community housing, environmental justice, energy equity, and sustainability:

The California Environmental Justice Alliance (CEJA) is a statewide, community-led organization that works to create comprehensive change and grow the movement for environmental health and social justice through organizing, movement-building, and strategic policy advocacy. CEJA empowers low-income communities and people of color to create resilient communities that are blanketed with local clean renewable energy, including advanced comprehensive technologies such as energy storage. CEJA’s Leadership Grant will be used to educate and mobilize environmental justice communities on comprehensive solar+storage solutions, and to lead the campaign to successfully implement the Multifamily Affordable Housing Solar Roofs Program (MAHSR) in California.

The Greenlining Institute, headquartered in California, works towards building a nation where communities of color thrive and race is never a barrier to economic opportunity. Greenlining’s energy and environmental equity programs are focused on ensuring that California’s investments in energy efficiency, renewable energy, and other “green” technology are equitably distributed, so that all Californians have a chance to benefit. Greenlining’s Leadership Grant will be used to conduct the outreach necessary to make sure affordable housing owners are aware of the challenges/benefits of solar+storage technologies and opportunities that will become available in California through the MAHSR program. The grant will also be used to work with housing advocates, the CPUC, and the MAHSR program administrators to help ensure that building owners get the information and assistance they need to participate successfully in the program, and to directly engage property owners and other community stakeholders to inform them and their tenants about solar+storage opportunities.

LINC Housing works to create and preserve housing that is both affordable and environmentally sustainable. LINC serves low-income communities across California, with most of its properties located in the greater Los Angeles area. LINC Housing’s Leadership Grant will be used to provide staffing to pursue resilient solar+storage housing projects, and to support efforts to expand the model of the multi-site solar project and apply it to use tax-credits for energy storage on the same sites.

Preservation of Affordable Housing (POAH) is a nonprofit developer, owner and operator of nearly 9,000 affordable homes in Connecticut, DC, Florida, Illinois, Maryland, Massachusetts, Michigan, Missouri, New Hampshire and Rhode Island. POAH’s primary mission is to preserve, create and sustain affordable, healthy homes that support economic security and access to opportunity for all. POAH has secured long-term affordability for residents while addressing the interests of owners, funders, public agencies, and other stakeholders. POAH’s Leadership Grant will be used to analyze and incorporate resilient power strategies at new construction projects, and to gain a better understanding of how to include solar+storage technologies and resilient design principles across POAH’s existing affordable housing portfolio.

Sust`āinable Molokai is a grassroots group formed to inspire the island community of Molokai, Hawaii to work towards a more sustainable future. Sust`āinable Molokai conducts education and advocacy work that honors traditional and cultural pathways alongside modern strategies for sustainability. Building on the success of past community energy projects, Sust`āinable Molokai is working to build capacity to broaden the breadth and depth of the island’s community renewable energy projects. Sust`āinable Molokai’s Leadership Grant will be used to support the organization’s work on utility scale solar+storage innovation, financing and policy work; partnership building; and advocating for legislation to allow battery storage for lower to middle income households through an existing revolving loan program.

THE POINT Community Development Corporation is dedicated to youth development and the cultural and economic revitalization of the Hunts Point section of the South Bronx, a low-income community of color. THE POINT uses the lens of environmental justice, youth development and arts and culture to engage Hunts Point residents in creating a more livable community and to generate economic opportunity. THE POINT has long-standing community-based partnerships in the South Bronx and has a track record of collaboration with local stakeholders, community-based organizations, elected officials, government agencies, and neighborhood planning processes. THE POINT’s Leadership Grant will be used to mobilize the community to advocate for large solar installations with support from back-up battery storage as the best possible scenario for the community, and advocate for a strong commitment from New York City to pursue the best possible scenario for energy pilot projects for the community, while creating renewable energy sources to reduce the current reliance on diesel for emergency power generation. The grant will also be used to pursue distributive energy resource solutions, such as community shared solar and battery storage, and other opportunities to address the high energy burden in the residential community along with the resiliency needs of the community.

WE ACT for Environmental Justice is dedicated to building healthy communities by ensuring that people of color and low-income residents participate meaningfully in the creation of sound and fair environmental health and protection policies and practices. Since 1988, WE ACT has been a driving force of change that improves the well-being of all New Yorkers, with a focus on Northern Manhattan. WE ACT’s Leadership Grant will be used to support continued implementation of its Northern Manhattan Climate Action Plan, which seeks to make the neighborhoods of East, Central, and West Harlem and Washington Heights and Inwood more resilient to the intensifying effects of climate change. The grant will also be used to lower greenhouse gas emissions while lowering energy costs and improving air quality and, ultimately, health outcomes in vulnerable communities of color and low-income in Northern Manhattan, specifically, and New York City, broadly.

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Clean Energy Group is honored to be working with our seven initial Resilient Power Leadership Initiative grantees. Over the coming year, we be working closely with these organizations in support of their efforts to bring the benefits of resilient power to their communities.

To support the grantees’ work, Clean Energy Group will develop targeted resilient power webinars, project and policy development resources, and other related tools and materials. These resources will be publicly available at www.resilient-power.org to assist other communities. Among these resources is an upcoming webinar on Thursday, April 6, which will review the Resilient Power Project’s recent activities and to provide an overview of the myriad informational resources available on the project’s website – read more and register here.

The Resilient Power Leadership Initiative is supported by The Kresge Foundation, The JPB Foundation, and Surdna Foundation. More information about this initiative is available in a press release and a fact sheet.

 

Photo Credit: LINC Housing – Mosaic Gardens at Monterey Park, CA