Solar for Everyone: Increasing Low-and-Moderate Income (LMI) Populations’ Access to Solar Power

Nov. 17, 2016 by Alison Holm

Distributed solar photovoltaic (PV) systems provide a wide range of potential benefits, including long-term energy cost savings, power grid resiliency[1] and reductions in greenhouse gas (GHG) emissions – which has positive implications for both human and environmental health. Access to distributed solar power remains elusive for a significant slice of the U.S. population, particularly low- and moderate-income (LMI) communities.

(See the “What is LMI?” text box for more information on how the term is defined).

LMI text box

Although solar PV costs have declined precipitously in recent years, upfront installation costs are still persistently out of reach for most LMI populations, which, by definition, have less disposable income. Aside from having limited cash-on-hand for solar power purchases, LMI populations face a number of related obstacles in pursuing distributed solar systems, including:

  • generally lower credit scores, which can make it difficult to attain a loan for solar investments;
  • insufficient tax burden to be eligible for (or benefit from) state and federal solar tax incentives; and
  • lower rates of homeownership and a higher likelihood of living in multifamily and affordable housing units, which translate into having limited control over decisions about utilities, especially rooftop solar.

The Low-Income Solar Policy Guide, recently released by nonprofit organizations GRID Alternatives, Vote Solar, and the Center for Social Inclusion, advocates for elevating equity considerations in residential solar deployment, noting ancillary benefits such as economic growth, job creation, and local solar market advancement. On top of established mechanisms to support solar deployment and access more generally (including net metering, tax incentives, rebates, solar or renewable energy credits, and community solar programs), a number of innovative financing and policy approaches are emerging across the country to specifically address LMI participation in solar markets.


NREL employees volunteered with GRID Alternatives to install solar PV systems in Grand Junction, CO last year. Utilizing volunteers reduces system installation costs, and systems can then be offered at lowered prices.

As discussed in a previous STAT blog post, four states – California, Colorado, New York, and Oregon – have enacted low-income carve-outs as part of their community solar policies. Additionally, several states have deployed broader LMI solar programs to cover both residential and shared, or community, PV systems. Though not a comprehensive list, the examples below illustrate the wide range of approaches being developed and implemented across the country.

  • Massachusetts’ Mass Solar Loan Program simultaneously offers loans to moderate income customers to purchase solar PV systems (or community solar subscriptions) and provides funding to lenders to offset credit risk. The multifaceted program includes a loan loss reserve package to encourage lenders to offer loans to customers with lower credit scores, and also provides income-based payments to cover a percentage of program loans or system costs.
  • Community organizations in California are identifying “green zones” – areas that currently shoulder high pollution burdens, but could be transformed into healthier, community-driven, environmentally protected areas – and targeting them for California Climate Investment funds set aside for ‘disadvantaged communities.’ Solar could be a critical piece of these types of place-based programs in terms of promoting both environmental and economic benefits.
  • Under Washington, DC’s Affordable Solar Program, income-qualified residents (both homeowners and renters) can receive solar PV installations at no cost. In Fiscal Year 2016, the program was fully subscribed with funding to outfit 140 homes with solar installations (rebates are capped at $2.70/Watt DC and issued directly to project contractors). The program is funded by the Washington, DC Department of Energy and Environment (DOEE) and is jointly administered by DOEE and the DC Sustainable Energy.

While the pool of experience in the LMI solar field is still relatively limited, emerging lessons-learned from states like California, Colorado, Massachusetts, and others provide valuable examples to inform future approaches. Innovative financing mechanisms to increase LMI individuals’ access to credit, combined with new styles of project development – i.e. using volunteers to install solar panels to reduce project costs (see picture above) and providing workforce training opportunities – are addressing barriers to LMI solar participation. LMI solar is also gaining broader attention at the national level, creating a platform for more information sharing and collaboration moving forward. (See, for example, The White House’s Clean Energy Savings for All Americans Initiative, which calls for making 1 gigawatt of solar power available to LMI families by 2020).

For more detailed information on the various financing mechanisms being deployed to increase LMI solar access, see a new STAT Network Low-and Moderate-Income Solar Policy Basics Page.

[1] See also a STAT blog post on the topic: How Solar PV Can Support Disaster Resiliency