SolarCity launched a new solar service this week to provide solar to affordable housing developers so residents can pay less for their electricity.
The projects will be built on-site, on the rooftops of either the apartment buildings or carports. In some cases, SolarCity may build a carport over a parking lot on which to install the solar panels.
“The key to solar growth is to bring it to new audiences,” said Jonathan Bass, VP of communications for SolarCity.
In this case, the key is also an additional $54 million in incentive funding for the California Public Utilities Commission’s Multifamily Affordable Solar Housing (MASH) program. The money will support 35 megawatts of new solar capacity.
Bass said that the combination of net metering and the MASH funds makes the projects viable. Low-income residents in California receive subsidized electricity at a lower cost than other ratepayers, so making the cost of solar pencil out for those customers can still be a challenge despite the falling costs of the technology.
“Today, it would be tough to make the economics work without MASH,” said Bass.
But that could change in California depending on what happens with the state's net metering 2.0 proceedings. One policy proposal, CleanCARE, would shift some of the funds that go to low-income customer subsidies to renewable-energy facilities, energy-efficiency measures, energystorageand demand response. Customers would still receive a low rate, but it would be enabled by clean energy rather than just a subsidy.
There are many challenges to make solar and clean energy work for low-income markets, but it is increasingly happening elsewhere. SunEdison has various power purchase agreements with public housing authorities in Massachusetts that provide net metering credits for solar PV arrays installed elsewhere in the utility’s territory. SunEdison provides the PPAs through PowerOptions, which purchases power for nonprofits and government entities.
SolarCity is leveraging its multifamily housing experience in its expansion into affordable housing. The company has more than 100 multifamily projects in California. It also recently started offering community solar to renters in Minnesota. Bass said that the Northeast would likely be the next place that SolarCity might try to introduce its affordable housing solution.
Community solar in its various forms is growing quickly. A recent report from GTM Research, U.S. Community Solar Outlook 2015-2020, found that community solar is the most significant U.S. solar growth market, with more than 500 megawatts installed in 2020.
The focus on multifamily and low-income clean-energy solutions has been growing considerably in the past year. In July, the Obama administration announced the availability of more than $500 million for community solar for low-income citizens.
Earlier this year, WegoWise, a leader in multifamily efficiency projects, teamed up with Elevate Energy and New Ecology to bring energy-efficiency projects to low-income housing in seven states. The funding comes from a series of grants from various energy and environmental organizations.
Property-assessed clean energy financing is also coming to the multifamily sector now that the U.S. Department of Housing and Urban Development has given its backing to PACE projects for multifamily properties. So far, most of the projects haven’t been targeted toward low-income housing, but the support from HUD should allow PACE providers to tackle the affordable housing market.
Multifamily affordable housing may be just one avenue to bring clean-energy solutions to low-income communities. In New York, Con Edison is partnering with local startup BlocPower to bring efficiency and solar projects to houses of worship and nonprofits in underserved communities as part of its demand-side management program to reduce electric load in order to avoid building a $1 billion substation.
BlocPower CEO and founder Donnel Baird sees an opportunity, albeit a complex one, which doesn’t have to rely on government money and grants.
“Let’s be honest: There’s a problem of finding the right community leaders who will actually get something done,” he said at the REV4NY Exchange in New York City. “But you can also look at the low- and moderate-income group as a $400 billion market opportunity that’s not being appropriately served in many ways.”