DC Stakeholders Release Groundbreaking Recommendations to Boost Low- Income Solar Energy Investments

Roundtable Event Generated Consensus Ideas on How to Use Solar Energy to Permanently Generate Wealth for Less Affluent District Families

WASHINGTON DC — Today, the GW Solar Institute and DC Solar United Neighborhoods (DC SUN) sent a whitepaper to Washington DC Mayor Gray, DC Council Members, and the District Department of the Environment (DDOE) on how to accelerate the deployment of solar energy to address energy affordability and generate wealth within local low-income communities.

While solar energy has become increasingly affordable and accessible, most of these installations are occurring in relatively higher income neighborhoods. This is the case in Washington DC, where multiple market barriers prevent wider deployment, depriving less affluent District residents from receiving the benefits of solar energy. Lower income Washingtonians are more likely to be renters, live in multi-family buildings, be burdened with lower credit scores, or have their utility bills covered through government support programs. As a result, these barriers prevent District residents from considering solar energy as a feasible energy alternative.

The whitepaper recommends creating a private-sector administered loan guarantee program that would enhance credit, unlock capital, and provide direct incentives for low-income households to participate in community solar projects. These recommendations represent the consensus views of 70 stakeholders that participated in a Roundtable in April 2014 at the George Washington University and included government representatives, community advocates, and leaders from the solar, investment, and housing industries.

The blueprint released today explains how this mechanism would work using a hypothetical $5 million public investment from new and existing funding streams, such as the Sustainable Energy Trust Fund, rate credits resulting from the Exelon merger, and Alternative Compliance Payments from energy suppliers unable to meet the District’s solar energy installation goals. According to the whitepaper, an investment of $4 million in the credit enhancement program could leverage over $36 million of solar projects. The remaining $1 million would fund a direct incentive program for low-income homeowners and renters who wish to install panels on their roofs or own a portion of a community solar project.

Loan guarantee programs, a promise by one party to assume the debt obligation of a borrower if that borrower defaults, are often established to correct perceived market failures. For building owners and tenants with insufficient or inadequate credit history or building equity, a loan guarantee eliminates a lender’s credit risk allowing financing to occur and greatly reduces project costs. Community solar projects, recently authorized by last October’s Community Renewables Energy Act (CREA), are another key aspect of the whitepaper’s recommendations. Currently the vast majority of District residents that are renters, tenants of apartment buildings, or have inadequate roofs cannot participate in a local solar energy project. CREA allows for virtual net-metering, meaning that any District ratepayer can own a portion of a “community solar” project located in DC and have the solar generated electricity credited to their electricity bill. The whitepaper envisions permanently empowering low-income families by providing them an ownership share (using the direct incentive and loan guarantee program) of a community solar project, a tangible asset that will deliver decades of dependable revenue streams.

Well-designed and implemented solar investment programs can permanently bring wealth into low-income communities by addressing energy affordability and becoming a source of local, living-wage jobs. In addition, with residential solar installations beginning to saturate the early adopter market, a low-income solar program that leverages community solar and private-sector capital can help ensure the continued growth of DC’s nascent local solar industry, reduce future electricity price fluctuations for all residents, and help the District meet its greenhouse gas reduction goals.

On September 23, 2014, the GW Solar Institute and DC SUN will host a Symposium to discuss ways to increase solar affordability and accessibility for Americans with limited means. Over 300 policymakers, industry experts, business leaders, academics, and students are expected to attend.

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The GW Solar Institute at George Washington University identifies and creates pragmatic solutions to public policy barriers preventing the adoption of solar energy.  The Institute is currently focused on the potential for solar energy to address energy affordability and generate wealth within low-income communities, analyzing how higher solar penetration levels impact electricity grids, and providing educational opportunities and training to GW’s diverse student body.

DC SUN is an umbrella organization for 11 neighborhood solar coops located throughout Washington, DC. DC SUN strives to make rooftop solar power accessible and affordable for everyone by providing communities with the information, connections, and opportunities they need to move efficiently through the “solarization” process.

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