by Emma Foehringer Merchant
May 29, 2019

When it comes to community-powered solar initiatives, Solarize — programs that aggregate residential purchases of rooftop solar systems, thereby lowering installation costs — have been overshadowed by the recent surge in community solar.

Community solar made up about 24 percent of non-residential capacity additions in 2018, according to Wood Mackenzie Power & Renewables. Comparatively, the overall market impact of Solarize programs is so marginal that Wood Mackenzie doesn't actively track it.

Still, community solar remains inaccessible in many states. Policies in Pennsylvania, for instance, hamper community solar projects. But Philadelphia is home to the largest Solarize program in the country, and it's showing considerable promise.

In the eyes of boosters, Solarize programs offer a proven mechanism to lower costs and deploy more systems, while returning investment to the community by employing residents and local installers. The first campaign cropped up in Portland, Oregon in 2009 and the concept has since spread to states such as Vermont, California, Indiana and New York (which actually includes community solar in its program).

Solarize programs are usually grassroots-oriented. While the impact within individual communities can be sizable — residential PV installations in Portland grew 400 percent from 2009 to 2010 — the programs have not had a meaningful impact on the overall U.S. solar market.

Solar advocates say the success of Philadelphia's program, which launched its third round in late April, shows it’s possible to spur growth in residential solar even within a restrictive policy environment. And as many cities, including Philadelphia, look to achieving 100 percent carbon-free electricity, proponents say deploying solar on as many roofs as possible is important, even if systems add up to minimal overall capacity for now.

Started in 2017, Solarize Philly organizers say the program has turned less than $100,000 in Department of Energy grants into $5.8 million of economic development and solar investment, created 52 jobs and helped revamp how the city’s utility interconnects solar. The team also says their model could be successfully translated to other areas, regardless of policy or economic incentives. 

“Prior to 2017, Philadelphia really had no solar market to speak of,” said Emily Schapira, executive director of the Philadelphia Energy Authority, an independent municipal authority created in 2010 to reduce the city's energy consumption. The Energy Authority administers the city's Solarize program.

“You don’t need anything in particular to do this," Schapira said. "We didn’t have a big budget; we didn’t have subsidies. […] I would encourage any community or region or state, no matter what your political landscape is. The math of solar works, and it can be done.”

Boosting solar when few other incentives exist

Solarize Philly was introduced into a weak overall state market for distributed solar.

Pennsylvania’s solar renewable energy credit (SREC) market has rebounded since 2017, when the state reversed a previous mandate that allowed out-of-state systems to compete in the market. But the previous policy had significantly depressed prices. When Solarize Philly got off the ground, Schapira said SRECs clocked in around $5 — offering little incentive for solar development. 

The state also has a virtual meter aggregation system in place, which allows generation and load to be aggregated only if the electric accounts are under the same account holder. That’s a big barrier to community solar, which often relies on less restrictive virtual net metering.

Those policies in tandem contribute to a lackluster environment for residential solar in Pennsylvania, according to Austin Perea, a senior solar analyst at Wood Mackenzie Power & Renewables. 

“There’s no community solar program at this point...and there isn’t a policy mechanism that would enable a community solar program,” he said. “Relative to its neighbors, [Pennsylvania] has a fairly weak incentive environment.”

The benefits of a Solarize program

Minimal incentives have meant minimal solar deployment in Pennsylvania compared to other Northeastern states like Massachusetts, New York and New Jersey. According to data from the Solar Energy Industries Association and Wood Mackenzie Power & Renewables, the state ranks 22nd among states for installed solar, despite having the fifth-largest population.

Solarize represents a comparative bright spot, in form if not capacity (the program has deployed only 1.6 megawatts to date). In 2017, the year the program began, Philadelphia ranked fourth among U.S. cities for solar growth.  

“The math of doing solar [in Pennsylvania] has been difficult for many years,” said Schapira. “To put Solarize on the scene really made a big difference.”

Headed into the last year of eligibility for the federal Investment Tax Credit, program coordinators have high hopes for the program’s growth. They’re targeting a doubling of the current 363 participants and want to increase that to 1,000 households by 2026.

Schapira said the program has driven down costs, assuaged consumer skepticism about solar and established consumer protections. Taken together, it's made solar cheaper and got more residents interested.

The average homeowner has saved $2,000 through the program, paying $3.19 cents per watt. (Schapira said that compares to an average of about $3.50 per watt in Philadelphia. Pennsylvania’s average residential price is $3.12 per watt, but Wood Mackenzie does not break out city-level data.) 

Establishing a solar workforce

Yet even with those lower prices, the majority of people that engaged in the first two rounds of the program paid out of pocket or through personal financing. “That really showed us we’re not necessarily distributing solar equitably in Philly,” said Schapira. 

To make the program more accessible to low- and moderate-income residents, Solarize Philly takes a program fee out of every project, which it’s now using to create a low-cost financing model in partnership with Boston-based Sunwealth. It plans to deploy lease financing to a pilot of 30 households this year, with a goal to reduce the cost of the lease price to 20 percent below utility electricity prices. 

Part of the program fee also goes to training; Philadelphia’s program cites job creation as a key benefit. The regional Energy Coordinating Agency (ECA) has partnered with Solarize from the start to run training programs that offer North American Board of Certified Energy Practitioners certification for adults and high schoolers. 

Of last year’s crop of adult graduates, 98 percent went on to jobs in solar. Walt Yakabosky, the organization’s director of training, said job placement for the ECA’s other training programs like energy efficiency and HVAC installation ranges closer to 80 percent. He also noted that the solar program has the lowest attrition rate. 

“Students that come through the program are very interested in succeeding because they’re very much aware that contractors need these installers,” said Yakabosky. In March, an analysis from the Bureau of Labor Statistics named solar PV installers likely to be the fastest-growing occupation through 2026. 

Philadelphia’s 26 percent poverty rate is the highest among the country’s largest municipalities, meaning the creation of well-paying jobs for the unemployed or underemployed is a serious priority for the city.

The program also aligns with Philadelphia’s climate commitments. Its “Clean Energy Vision,” unveiled in 2018, calls for a 100 percent carbon-free grid by midcentury. Under the plan, 100 percent clean electricity must power municipal operations by 2030.

A bridge to bigger policies?

While Solarize programs are a feel-good municipal policy, analysts say the reality is they are having a negligible contribution to overall solar deployment in this country.

The programs do serve as a “useful tool” in inching cities and local jurisdictions forward on clean energy commitments, Perea said. But in the long term, overarching policies like California’s new-build home solar mandate will be more successful in boosting residential installation.

“The Solarize programs are somewhat of a short-term solution to what the broader residential solar industry is trying to achieve, which is 100 percent renewable adoption with a bias toward a solar system on every house,” said Perea.

“One approach that I think we may begin to see is more localities and states passing new home solar mandates. If cities and states are serious about 100 percent renewable adoption…the easiest way to do that is top-down.” 

Pennsylvania is considering state policy to speed solar uptake. In February, a bipartisan group of lawmakers introduced a bill that would clear the way for community solar development, though it has yet to pass either house.

In the meantime, Solarize programs may help prime smaller markets for solar. Working with Solarize helped spur changes at the state’s largest utility, Peco Energy, which is headquartered in Philadelphia.

The Exelon subsidiary formed a distributed energy group after Solarize Philly began to help manage solar interconnection. Brian Barr, the group’s manager, said the utility is now looking to hire a “solar concierge” to liaise with solar developers. 

“Energy is going to be more distributed,” said Barr. “If [customers] want solar, we want to give them solar, and make it easier for them.”

Earlier this month, Philadelphia Councilwoman Blondell Reynolds Brown introduced legislation offering solar incentives at $0.10 per watt for commercial projects and $0.20 per watt for residential projects through 2024. Reynolds Brown framed the credit as a means to cushion the impact of the federal Investment Tax Credit stepdown.

In addition to programs like Solarize, Schapira said initiatives such as Reynolds Brown’s will be required to help Philadelphia meet the mayor’s Clean Energy Vision targets. The city installed 2.2 megawatts of solar in 2018, which it needs to increase to 15 megawatts per year to meet city goals. 

“Everything we do is really in the context of a climate goal,” said Schapira of Solarize’s work. She added that the rebate acts as “a big signal from the city that 2019 is the year to go solar in Philly.”