Solar Momentum Surges with Increased Federal and Local Backing in Low to Moderate-Income Communities

Solar access for low- and moderate-income (LMI) communities is basking in the spotlight. There's a surge in demand for fairer solar placements, with strong backing from both federal and local levels.

Vincent Potter, a policy analyst at the NC Clean Energy Technology Center, emphasized that the past year marked a significant shift in support for LMI communities in solar initiatives. He noted that 2023 witnessed an increase in LMI-focused provisions within state renewable energy objectives and community solar policies.

While community solar hasn't always prioritized LMI representation, the evolving market now embraces a broader, more inclusive definition of the term, emphasizing societal impact over physical boundaries.

Community solar's aim has always been clear: bring solar to those who couldn't, wouldn't, or didn't install it on their property. Whether it's due to not owning the space or avoiding tree removal, the goal is inclusivity, says Potter. The evolution of LMI (low- and moderate-income) additions and programs represents a more comprehensive approach to community solar.

LMI carveouts emerged in the U.S. around 2017, often utilizing virtual net metering. This allowed LMI households to engage in proto-community solar subscriptions. The community solar movement gained momentum a year later, offering advocates a golden opportunity to champion solar equity for everyone.

Back in 2018, as community solar gained traction, advocates and utilities eyed it as a business opportunity, grabbing renewable energy credits along the way, according to Potter. However, this opened a window for public staff and ratepayer advocates to address equality issues. With pre-approved facilities in play, the chance emerged to broaden these programs, benefiting more than just the affluent.

By the close of 2021, community solar projects were thriving in 39 states, with 22 states and Washington, D.C., having established community solar programs. While community solar ensures equal access to clean energy, the reality is it's also a savvy business move. States embrace community energy not only for its inclusivity but also as a means to meet ambitious clean energy targets.

Community solar isn't just about clean energy; it's a strategy for broadening the clean energy landscape. By extending distributed energy to untapped markets, especially low-income households, states can expedite their clean energy objectives, according to Potter. Large population centers often have homes and condos ill-suited for traditional solar setups, creating a latent demand that fuels the community solar surge. State legislatures, in permitting this, aim to ensure inclusivity, proclaiming, "Let's make sure we're not leaving anybody behind."

With the community solar market heating up, installers are diving into intense competition. The federal government sweetens the investment tax credit for projects in energy communities for low-to-moderate-income (LMI) residents via the IRA's "Low-Income Communities Bonus Credit Program." The program's first year saw a whopping 46,000 applications, totaling 8 GW of capacity—four times more than available. While only 1.8 GW will secure bonus credits, Potter sees this as a substantial boost for clean energy accessibility in LMI communities.

"It's not surprising that four times the capacity was applied for compared to the incentives available," he commented. Some approach it recklessly, throwing everything at the wall. Even if 75% of these projects fall through, securing 1.8 GW is still a significant win. Losing some through attrition while maximizing the category might be a solid outcome, Potter suggests.