Q:How do you design solar programs for low-income customers?
A:Affected by the COVID-19 pandemic and subsequent economic impacts, more people have joined the low- and moderate-income population. You can support these customers by adjusting your solar programs to help them save on their bills.
Examples of community solar programs with low-income carve-outs
A low-income carve-out sets aside a percentage of program enrollments for low-income customers. It’s a good way to encourage these customers to take advantage of your solar offerings.
We’re aware of about 20 solar programs across the country that either focus only on low-income customers or have carve-outs for them.
A low-income carve-out sets aside a percentage of program enrollments for low-income customers.
Almost half of these are community solar programs, which help your low-income customers lower their energy bills without installing expensive rooftop panels. Community solar programs can also help customers who don’t live in or own a standard house and can’t install solar panels.
Austin Energy and Duke Energy both have community solar programs with low-income carve-outs. You can use these as a guide in designing yours.
Austin Energy
Austin Energy’s Community Solar program, which is open to all residential customers, allows participants to offset 100% of their energy usage with locally generated solar power. Participants can opt in and out of the program at any time, and rates are locked in for 15 years.
Austin Energy has set aside a 50% carve-out for low-income customers who are eligible to participate in Austin’s customer assistance programs (CAPs). The standard rate for customers participating in this program is $0.0427 per kilowatt-hour (kWh), but Austin Energy used incentive funds to reduce it to $0.0277 per kWh for eligible CAP customers. This rate is slightly lower than the traditional nonsolar rate of $0.02895 per kWh.
Duke Energy in South Carolina
Duke Energy’s Shared Solar program in South Carolina allows customers without net metering to use solar energy without installing rooftop panels.
Duke created a carve-out for low-income customers with household incomes at or below 200% of the federal poverty level. These customers don’t have to pay the application and enrollment fee, which saves them $120. Duke estimates that the program will save these low-income customers $100 a year in energy costs.
The utility prequalifies any customer who’s already participating in a government assistance program like:
- Supplemental Nutrition Assistance Program
- Women, Infants, & Children
- Medicaid
How to determine eligibility for low-income solar programs
We’ve seen four main strategies for determining eligibility.
Qualify customers based on income. Most programs use some type of income-based criteria. For example, Duke Energy customers are eligible for its community solar program if their household income is at or below 200% of the federal poverty level.
Use the same eligibility requirements as existing low-income programs.
Qualify customers based on location. Customers living in areas with environmental and socio-economic stressors are likely to be low-income. This could include customers living near industrial facilities with pollution or areas that are more vulnerable to natural disasters.
Qualify customers based on participation in an existing program. Use the same eligibility requirements as existing low-income programs. This streamlines the targeting and verification process. For example, Austin Energy customers who already participate in CAP are eligible for its low-income community solar rate.
Qualify affordable housing managers. In Colorado, Connecticut, Maryland, and Rhode Island, affordable housing managers can qualify as low-income participants.
How to market to low-income customers
In addition to going door-to-door in your most affected communities, use partnerships, contact center support, and self-service kiosks to market your low-income solar offerings.
Partnerships. To expand their reach in low-income communities, many utilities have partnered with:
- Community action agencies
- Public housing agencies
- Low-income housing developers
- Faith-based organizations
- Nonprofit organizations that serve low-income families
These entities have relationships with your customers, and your customers trust and respect them.
Contact center support. Promote low-income or discount programs when low-income customers call the contact center to ask a question about a bill, complain about a high bill, get payment assistance, or make a payment arrangement. Explain how it can help save them money.
Advertising at self-service kiosks. Provide brochures or other information about low-income and discount programs at in-person bill payment locations such as grocery stores, which are open during the pandemic.
Examples of alternative low-income solar programs
We found a few additional solar program examples that either don’t have carve-outs or aren’t community solar programs.
Colorado
In 2015, the Colorado Energy Office (CEO) launched a Low-Income Community Solar Demonstration Project that included eight utilities:
- Empire Electric Association, Inc.
- Delta Montrose Electric Association
- Holy Cross Energy
- Yampa Valley Electric Association
- Fort Collins Utilities
- San Miguel Power Association
- Grand Valley Power
- Poudre Valley REA
Each of the utilities designed their community solar projects to best serve their customers. However, the project required them to “offer solar credits to low-income subscribers to ensure that the solar energy provided is affordable.”
The CEO’s Insights from the Colorado Energy Office Low-Income Community Solar Demonstration Project (PDF) report gives details, program insights, and tips for each of the community solar projects in the demonstration.
Kentucky
In 2019, KY Habitat for Humanity announced an unprecedented partnership with LG&E and KU.
The organization is transferring the shares to low-income families to offset as much as 30% of the families’ monthly energy usage.
The utilities collaborated with the Kentucky Habitat for Humanity (KYHFH) to give 10 low-income families subscriptions to the utilities’ Solar Share Program. The program will offset “a portion of each family’s utility bill for 25 years.”
Under the utilities’ new Solar Share gifting option, KYHFH subscribed to 180 shares of the Solar Share program. The organization is transferring the shares to low-income families to offset as much as 30% of the families’ monthly energy usage.
Massachusetts
The Massachusetts Department of Energy Resources (DOER) launched the Solar Massachusetts Renewable Target (SMART) Program in 2018.
DOER partnered with Eversource, National Grid, and Unitil. The program provides varying incentives to customers who participate in solar photovoltaic projects up to 5 megawatts in size. Low-income participants are able to receive higher per kilowatt-hour incentives than other participants (figure 1).
Figure 1: SMART program compensation rates for systems with less than or equal to 25 kilowatts
| Electric distribution company | Customer type | Block 1 compensation rate |
|---|---|---|
| © E Source; data from Massachusetts Department of Energy Resources | ||
| Fitchburg Gas & Electric and Massachusetts Electric | Low-income customer | 0.35795 |
| Standard customer | 0.31126 | |
| Nantucket Electric and NSTAR Electric | Low-income customer | 0.39100 |
| Standard customer | 0.34000 | |
| WMECO | Low-income customer | 0.32862 |
| Standard customer | 0.21432 | |
Michigan
The Cherryland Electric Cooperative partnered with the Michigan Agency for Energy (MAE) and Northwest Michigan Community Action Agency (NMCAA) to help low-income customers with the Cherryland Pilots Low Income Solar Program.
The program includes 50 low-income households and each household receives nine panel shares in one of the Spartan Solar community arrays. The participants get a monthly bill credit of $0.10 per kWh for their panels’ output or about $350 per year in solar bill credits.
MAE gave a $80,000 grant to help fund the program. Other funding came from Cherryland and the federal Low-Income Home Energy Assistance Program through NMCAA.
Minnesota
Xcel Energy in Minnesota created a low-income carve-out in its Solar*Rewards program. The program gives varying incentives to customers for buying and installing on-site solar (figure 2).
Figure 2: Solar*Rewards incentives
| Customer category | Production incentive ($ per kilowatt-hour) | Up-front incentive ($ per watt) |
|---|---|---|
| © E Source; data from Xcel Energy | ||
| Income-qualified single family | 0.07 | 2.00 |
| Income-qualified multifamily and nonprofit organizations serving income-qualified customers | 0.06 | 1.00 |
| Income-qualified solar gardens | 0.06 | 0.50 |
The Minnesota Department of Commerce requires that Xcel Energy reserve at least 10% of the incentives for income-qualified customers until September 1 of each year. At that point, unclaimed incentives are open to all customers.
Washington DC
In 2016, DC’s Department of Energy and Environment established the Solar for All program, which it describes in its Solar Initiatives page.
The goal of the program is to “provide the benefits of solar electricity to 100,000 low-income households, and to reduce their energy bills by 50% by 2032.” To be eligible, residents’ household incomes must be below 80% of the local median income. The program includes options for community solar and residential solar.
