A state incentive program isn’t reaching customers in low-income areas, and groups say proposed changes aren’t enough.
A Massachusetts Senate proposal to set aside funding for solar projects in low-income neighborhoods will do little to improve access without bigger changes to the state’s solar incentive program, advocates say.
“At a high level, it’s good to see that there’s a focus on making the benefits of solar more accessible to low-income communities in Massachusetts,” said Ben Underwood, co-CEO of Resonant Energy, a solar developer focused on building projects in underserved areas. “But there are really important ways that this legislation is falling short right now.”
The state Senate last week passed a wide-ranging climate bill including provisions that would create a carbon price, set a goal of reaching net-zero emissions by 2050, and let towns adopt more stringent energy efficiency building codes. The legislation also called for a so-called “carve-out”: a portion of money in the state’s solar incentive program specifically dedicated to projects serving low-income consumers.
In a statement announcing the legislation, Senate leadership acknowledged the carve-out is an attempt to “reverse the failure of state programs” to boost solar development in low-income neighborhoods. But activists and industry insiders argue that creating a pool of designated money will do little good without significant changes to the way that money is deployed.
“My fundamental concern is that the real, near-term activity that would lead us to hit the ground running in solving climate change and investing in local low-income communities is not present in this bill,” said Sean Garren, who manages campaigns in the Northeast for Vote Solar, a renewable energy advocacy group.
The Solar Massachusetts Renewable Target (SMART) program launched in late 2018. It aims to spur solar development by paying system owners a set rate per kilowatt-hour of power generated. The base rate is determined by the size of the installation and the utility territory in which it is located. As more projects apply for incentives, the compensation rate decreases.
Projects with features the state hopes to encourage — integrated energy storage or location on a rooftop, for example — have a few extra cents added to their rate, known as an “adder.”
Developments serving low-income consumers are eligible for an extra six cents per kilowatt-hour. However, very few projects have applied for this money: Less than 1% of the applications for SMART money have included a request for a low-income adder.
One of the major difficulties, according to those in the industry, is finding and recruiting qualified low-income customers. For an installation to be eligible for the low-income adder, at least half of the users it serves must be enrolled in their utility’s discount rate program. But the rolls for that program are kept confidential, making it time-consuming and costly to hunt down qualified participants.
At the same time, many residents of underserved areas are hesitant to commit to the contracts SMART requires. There is a history in the state of competitive electric suppliers targeting low-income consumers with deceptive claims of low rates and big savings. Now, many residents are understandably skeptical of those who come knocking, promising great deals on electricity.
And the logistics of installing solar in many of these areas can also be more costly than putting solar on undeveloped land. Older buildings might require roof work before they can be made ready for racks and panels, trees might need to be removed, and special equipment can be needed to maneuver components onto buildings in crowded urban areas.
Taken together, these factors often make it prohibitively expensive to pursue projects serving low-income users. The six-cent adder just isn’t enough to cover the additional costs, advocates said.
Furthermore, the popularity of the SMART program means that compensation rates have decreased by somewhere from 8% to 24%, depending on location. Therefore, low-income projects that didn’t get their applications in early face even steeper financial hurdles.
“We’ve already missed out on the highest rates,” said Vickash Mohanka, clean energy organizer for Clean Water Action. “The projects that got those are the ones that were easier to finance, easier to site.”
To address these issues, advocates have been pushing for changes in how low-income consumers are identified. A better approach, they say, would be to use environmental justice maps, which use demographic information to identify neighborhoods that are at high risk for negative environmental effects. A project would then be eligible for low-income incentives based on its location on the map, rather than by piecing together a subscriber base of low-income individuals.
Underwood would also like to see compensation for low-income developments go up.
“A carve-out without a mandated increase in compensation for those projects is not going to move the needle,” Underwood said. “We need both.”
Despite ongoing concerns about the current state of the bill, there is some cause to be optimistic that legislators will take up some of these concerns, Garren said.
“I do think from talking to senators and others that there is interest in turning to that soon,” he said. “So we’re not giving up by any means.”