Connecticut Brings Solar to Low- and Moderate-Income Homeowners

By Nate Hausman, CESA Project Director

Low- and moderate-income (LMI) Americans have had less access to solar than those with higher incomes. Even LMI residents who own their own homes face barriers to installing solar. The Connecticut Green Bank, a quasi-state agency established by the Connecticut General Assembly, analyzed the obstacles and developed tools to bring cost-effective solar, combined with energy efficiency, to the state’s LMI homeowners.

Barriers to solar for LMI homeowners can include access to financing, perceived and real credit issues, inability to take advantage of tax credits, and contractors’ customer acquisition strategies. Furthermore, many LMI homeowners don’t know anyone in their communities who has solar and are unlikely to even think of solar as a possibility.

To ensure that those most in need of electricity bill savings would be able to take advantage of the benefits of solar, Connecticut Green Bank created an elevated solar incentive for LMI homeowners and launched an initiative to attract solar providers to work in the state’s under-resourced communities. In 2015, PosiGen became the first solar company to receive program support to enter Connecticut’s LMI markets. Since then, Connecticut Green Bank’s partnership with PosiGen has resulted in over 2,700 installed projects, collectively amounting to nearly 18 MW of solar capacity. Seventy-three percent of PosiGen’s projects in Connecticut are in LMI census tracts.

Key program elements that have made Connecticut’s model successful are:

1. It employs a public-private partnership to combine marketing and financing. The program is supported by a trustworthy public entity (in this case, the quasi-public Connecticut Green Bank) that partners with vetted private-sector solar companies to reach LMI single-family homeowners.
2. It specifically serves LMI homeowners. Elevated incentives are offered for solar projects that serve homeowners who earn less than 100 percent of area median income. The program allows for alternatives to credit scores for evaluating the eligibility of LMI households and uses focused, community-based marketing campaigns to target underserved communities.
3. It maximizes financial benefits for participants. In Connecticut’s case, the model relies on a third-party ownership structure to monetize the federal solar tax credit, reduce capital investment burdens on participating households, and increase affordability. The program allows for solar to be combined with energy efficiency upgrades and other energy solutions to increase LMI participant benefits.
4. It protects participants from financial risks. The program guarantees that solar contracts are cashflow positive for program participants. It provides direct oversight controls over participating solar companies and has no upfront costs, price escalators, or hidden fees.
5. It supports solar contractors entering the LMI market. Under Connecticut’s program, a competitively selected solar provider received financial support to help underserved solar markets in the state. In addition, the Connecticut Green Bank facilitates connections with community partners to assist with program outreach.

You can read more about Connecticut’s solar program for LMI homeowners on page 49  (case study 3) of CESA’s report Returning Champions: State Clean Energy Leadership Since 2015. You can also view a fact sheet on Connecticut’s program or read a white paper about it here.

Tremendous potential exists for LMI homeowners in states beyond Connecticut to be served by variations on this pioneering solar financing and marketing model. Under CESA’s Scaling Up Solar for Under-Resourced Communities project, stakeholders can join a network to learn about the potential for implementing programs for LMI homeowners across the country. Members of this learning network will receive analysis and resources related to Connecticut’s program, as well as other information related to solar programs for LMI homeowners. Sign up here to join the learning network.