Community Solar Can Better Serve Low and Middle Income Customers: Part 2

Part 1 of this blog series looks at how community solar can address common challenges associated with traditional rooftop solar and how rethinking eligibility for community solar projects can expand access to low and middle income (LMI) customers. Another consideration is how community solar can better serve LMI customers.

Community Solar Programs Can Better Target LMI Consumers

The primary means for community solar programs to target LMI households is through incentives. By changing the way incentives are provided, we improve the way that community solar programs target LMI households.

A paper by Alexander Stauch and Karoline Gamma examines community solar incentives by studying how different remuneration structures appeal to different customer segments. For simplicity, the authors think of community solar benefits offered as one of two types. An electricity model in which the customer is provided a fixed amount of solar power, and an investment model in which the customer is provided monetary compensation in the form of electricity bill credits. In other words, the customer is remunerated in either kilowatt-hours or dollars.
The results of this study indicate that customer segments react in different ways to the two structures. Default power consumers (consumers with low intrinsic motivation to purchase renewable energy) are more willing to buy when presented with monetary compensation. Green electricity consumers (consumers with high intrinsic motivation to purchase renewable energy) are more willing to buy when presented with remuneration in kilowatt-hours of solar energy. Beyond those main conclusions, the authors find that green electricity consumers (those who are intrinsically motivated to purchase renewable energy) are actually less likely to buy into community solar if the program markets itself on financial remuneration.

The report tells us that communication is crucially important in attracting customers to community solar projects. The conclusion is that, as Stauch and Gamma write, “offers and policies should … use target-group-specific communication when locally introducing community solar.” We can apply this takeaway to the present issue of expanding LMI participation in community solar programs by reconsidering how to communicate the benefits of community solar.

To Attract LMI Customers, Improve Communication of Benefits

One of the primary barriers to traditional solar power for LMI households is the upfront cost of installation. Community solar has the potential to address this financial barrier—it is one of the primary benefits of community solar and one that makes it a promising avenue for increasing LMI access to clean energy. Attracting LMI customers requires community solar programs to effectively communicate their financial benefit to LMI households.

As Stauch and Gamma demonstrate in their paper, framing community solar as an economic issue can be a convincing argument when targeting default electricity consumers (a group that includes LMI customers who do not have access to renewable energy). As such, it is important that LMI households are made aware of the economic benefits that community solar can offer.

Rethinking LMI Access to Renewable Energy

Community solar is a promising solution to some of the barriers to traditional residential solar, such as financing and home ownership, but there remains room for improvement. As the cited papers demonstrate, it is possible to make community solar more accessible by rethinking how we measure default risk and by improving communication to target LMI households.

Beyond the examples discussed here, efforts to expand LMI access to community solar are growing. Vote Solar recently released a policy brief calling for the automatic enrollment of LMI customers in state-run solar programs and a new community solar model in New York provides energy on an opt-out basis. Both of these policies would greatly expand LMI access to renewable energy.