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A state solar incentive program hasn’t done enough to spur development in disadvantaged communities, critics say.
A coalition of renewable energy activists, developers and investors is pushing Massachusetts to modify a solar incentive program to make it easier to build solar projects in low-income neighborhoods.
“We’re trying to capture the benefits of solar for as many people as possible,” said DeWitt Jones, president of BlueHub Energy, a nonprofit organization that supports, funds, and develops renewable energy projects.
The state launched the Solar Massachusetts Renewable Target program in November to incentivize up to 1,600 megawatts of solar capacity. The program offers higher rates to owners of projects that meet desired policy goals, such as building in brownfields, incorporating energy storage, or serving low-income populations.
The incentive, however, is not enough to overcome obstacles to developing solar projects for low-income consumers, advocates say. The system for identifying qualified consumers is burdensome, financing is hard to obtain, and the contracts required by the law are worrisome to many residents. The result has been disappointingly low adoption rates in low-income communities: Since the state program went into effect, less than 4% of the capacity approved has gone to low-income projects.
While the vast majority of the 286 biggest projects —those topping 700 kilowatts in capacity — are community shared solar projects, just 3.8% of that capacity is part of proposals for low-income users.
Advocates now propose an energy justice option to resolve some of these problems. It was submitted to the state energy department in mid-August as part of the first official review of the incentive program required by law after the first 400 MW of capacity were approved. The proposal is co-signed by 23 environmental groups, businesses and community organizations.
“This is the best minds in the business thinking about it,” said Jonathan Abe, CEO of clean energy investment firm Sunwealth. “This is the result of trying to figure out the pros and cons, and coming up with a better plan that’s more inclusive of low- to moderate-income people.”
Accessing more residents
A key change proposed under the energy justice option is the criteria used to determine whether consumers qualify as low-income, Abe said.
In low-income urban neighborhoods — where most residents live in apartments or multi-family homes — the most feasible way to develop solar projects is through community solar installations. Under existing regulations, a community solar project qualifies for the low-income incentive if more than half of the power it generates is sold to households on a discount electricity rate, known as the R2.
However, information about who receives the R2 rate is confidential, making it difficult for developers to identify a cluster of qualifying residents. Also, potentially thousands of low-income residents who would be eligible for the discount rate aren’t signed up. The R2 criteria inherently miss a significant portion of the population the incentive is intended to target, supporters of the new proposal say.
The energy justice option would instead use environmental justice maps based on demographic data about income, race, and English language skills to identify neighborhoods at risk of negative environmental outcomes. Solar project planners could compare a resident’s street address to the environmental justice maps to determine eligibility.
“This is a geographic screen,” Abe said. “It’s simpler in many ways and it captures the intent of the program.”
The proposal would also remove the existing requirement that low-income customers sign a contract to buy the power from a solar project receiving incentives. Massachusetts has a history of competitive electric suppliers asking consumers — especially those in economically disadvantaged neighborhoods — to sign contracts, promising big energy savings that never materialize.
“If we’re creating a mechanism that requires a contract to provide savings, it has the potential to have the same consumer protection problems,” Jones said.
Removing the contract requirement could make a significant difference in developers’ ability to connect with willing customers, he added.
Addressing the energy burden
The changes included in the energy justice option are necessary for environmental and economic fairness, supporters say.
Utility bills can be a volatile expense for low-income households, Jones said. Stabilizing these prices with solar power can allow residents to use money to pay down other debts and to better save for the future. Similarly for affordable and public housing developments, low and predictable power prices mean more budget resources can be dedicated to other programming and services, said Karen Kelleher, executive director of LISC Boston, a community development nonprofit.
“It can really generate cost savings in the operations of the projects,” she said. “If you’re doing that, it’s really stretching those scarce housing dollars further.”
The state has started the required 400-megawatt review, but it has not shared a timeline for when it will release proposed changes to the Solar Massachusetts Renewable Target program. The administration is committed to reaching more low-income people with the program, Abe said, and has been generally receptive to ideas from stakeholders.
“The state has been extremely open to feedback and they are kind of in a quiet period,” he said. “We’re just waiting.”
Clarification: DeWitt Jones is president of BlueHub Energy, a nonprofit organization that supports, funds and develops renewable energy projects. The organization was mischaracterized in a previous version of this article.