Rooftop Solar Is Becoming More Accessible to People with Lower Incomes, But Not Fast Enough

Last year, the median U.S. household with rooftop solar had an income of $110,000, which is nearly double the $63,000 median for all households.

The difference shows that the benefits of solar continue to disproportionately go to wealthier households. But the gap has been shrinking.

The numbers come from the latest edition of a long-term study by Lawrence Berkeley National Laboratory, with a trend that hasn’t changed much from previous editions: Solar is becoming more accessible, but the shift is gradual.

“Progress is good, but I’m not thrilled with the imperfect world of incremental progress,” said Stephen Campbell, senior manager of policy and business development for Grid Alternatives, an Oakland-based nonprofit that has a variety of solar power programs.

In 2010, the median income of households with solar was $129,000, according to the study. Access to rooftop solar has improved thanks to reductions in the costs of solar systems and the growth of programs—including some run by Grid Alternatives—to help people with low and moderate incomes afford solar.

Like so many aspects of the transition to clean energy, the trend is moving in the right direction but not quickly enough. Rooftop solar is growing, but is not yet part of the mainstream in most of the country. Only about 3 percent of households have solar, a share that rises to 5 percent if we’re only looking at owner-occupied, single-family houses, according to the report’s co-authors.

The goal, Campbell said, should be for solar to be within reach of anyone who wants it.

This is important because of the larger imperative to build as much renewable energy as is feasible, which includes big increases in rooftop solar and utility-scale solar.

For example, California agencies have said the state needs to more than triple its rooftop solar capacity between 2019 and 2045 in order to meet a target of 100 percent carbon-free electricity by 2045.

The Berkeley lab study finds that one of the factors that has helped to expand access to rooftop solar is the use of leasing and other third-party ownership models. By leasing panels or subscribing to a local community solar project, a customer can use solar without having to pay high upfront costs. The main drawback is that third-party ownership usually means less savings for the consumer.

Campbell, who was not involved in the study, said one of the keys for expanding access to rooftop solar is to have a variety of financial tools available for obtaining solar, which can include leasing or owning the systems. The situation varies by state, including some states with restrictions on solar leasing and community solar.

Taking a few steps back, one of the big issues this report touches upon is the perception—and the reality—that the benefits of rooftop solar are mainly enjoyed by households with incomes that are far more than the median.

Those benefits include a reduction in energy costs, with most systems able to pay themselves off through utility bill savings in about a decade. And there are community benefits, with less demand for electricity from the grid that may come from fossil fuels and contribute to climate change.

But rooftop solar is also contentious from a policy standpoint, with utilities often pushing to reduce the financial advantages of having the systems by adding special charges and modifying rates. Utilities will use the demographics of solar ownership, which lean affluent and white, to argue that incentives amount to an unnecessary subsidy.

This is happening right now in California, where state regulators are considering how to revise the “net metering” rates utilities pay to rooftop solar customers for excess electricity that gets sent back to the grid, and there are plenty of examples from across the country. The California Public Utilities Commission is poised to release a revised version of its proposal to change net metering, which could come as soon as this week.

It’s no accident that I keep mentioning the specifics in California. The state remains, by far, the country’s rooftop solar leader. California’s prominent role in the market is one reason for the size of the income gap between solar and non-solar households, since California is a high-income state. (California also is the only state with a building code that requires solar on nearly all new residential construction.)

But California’s significance in the market is shrinking as rooftop solar businesses grow more quickly in other places with mostly untapped markets, which could help to reduce the income gap. The report points to Texas and Florida as two states where rooftop solar is growing and the median income is lower than in California.

Where is this heading? A lot depends on the costs of solar, which have risen in the last couple of years following a prolonged decline. As the industry grows and becomes more competitive, rooftop systems should become less expensive.

The sweet spot for consumers is for solar to be affordable enough and for the benefits to be clear enough that rooftop panels are common in a wide variety of neighborhoods. We’re not there yet—but we’re moving in the right direction.

Other stories about the energy transition to take note of this week:

Democrats Gain Four State Government ‘Trifectas,’ Increasing Likelihood of Climate Action: Democrats gained “trifectas” in four states—Maryland, Massachusetts, Michigan and Minnesota—in Tuesday’s election, which means they hold the governor’s office and both houses of the legislature. Having a Democratic trifecta makes a state much more likely to pass legislation to address climate change and support renewable energy, as I report with my colleagues Aman Azhar and Aydali Campa in this article about a midterm in which the Democrats did much better than analysts had predicted.

Auto Companies Want Clarity on New Federal EV Incentives: Automakers are worried that they won’t be able to meet requirements for their vehicles to qualify for the maximum level of new subsidies for electric vehicles under the Inflation Reduction Act. The companies said in comments to the Internal Revenue Service that there are too many ways to run afoul of the rules, as David Ferris reports for E&E News. The new rules should “properly account for the realities and complexity of the battery supply chain,” said General Motors in its comments. This is likely to be an ongoing issue as automakers try to figure out how to get the most benefit from a law that gives a larger subsidy to EVs with batteries that are assembled in North America and use components from the United States or countries with whom the United States has trade agreements.

Hawaii Moves to Time-Varying ‘Smart’ Rates for Most Utility Customers: Hawaii’s largest electricity utility has introduced new rates that vary based on the time of the day to encourage customers to shift some tasks to hours that otherwise would have low demand. The rules for Hawaiian Electric customers reflect the increasing role of solar power in the grid, with electricity plentiful in certain hours of the day, and high demand in the hours right after sundown, as Julian Spector reports for Canary Media. There is also a “grid access” charge for customers whose peak usage is the highest. ​“People who want to save money can do so,” said Jim Lazar, a consultant and rate-design expert who helped to craft the policy. At the same time, people whose electricity use puts a disproportionate strain on the grid and who don’t modify the timing of their use could be facing higher costs.

The Most Important Electric Vehicles Could Be Rental Cars and Buses: The electric vehicles that will help the most against climate change may not be the ones everyday consumers buy. Rather, they could be ones from fleets like rental cars, buses and delivery trucks. Fleet vehicles are purchased in bulk and can take far more trips in a week than a typical passenger car so they have an outsize effect on reducing carbon emissions, as Rebecca Heilweil writes for Vox. “Having electric vehicles on the road with these fleets, it creates that familiarity,” said Katie Robinson, the programs and operations vice president at the Electrification Coalition. “It shows the commitment of the municipalities, the state governments, and these private companies.”

Inside Clean Energy is ICN’s weekly bulletin of news and analysis about the energy transition. Send news tips and questions to [email protected].