Historically solar panels have been primarily affordable for middle and high income earners because of the high initial start-up expenses. The average start-up cost for a household is estimated around $15,000. According to a study by the policy institute Center for American Progress, a majority of household solar arrays are located in middle classes families with the remainder being located in wealthy neighborhoods.
California has created a program to help low-income households obtain and install solar panels on their homes. In 2012 the state legislature created the cap-and-trade program that auctions off emission allowances and uses a portion of the proceeds to support green energy programs.
To date, California’s cap and trade system has collected about $1.6 billion from emissions proceeds. State law SB535 mandates that at least 10 percent of the money collected from this system is required to go toward projects in disadvantaged communities. So far, about $14.7 million has been allocated from the proceeds to help improve the local environment.
The solar panel initiative of the overall project – named SASH (Single-family Affordable Solar Homes Program) — is run by GRID Alternatives to help low-income consumers reap the financial and environmental benefits of alternative energy.
This initiative is aiming to install solar arrays in about 1,600 California homes by the end of 2016. To qualify for this program, home owners must be located in neighborhoods that the state has identified as being “disadvantaged” and must also have an income of no more than 80 percent of their local community’s median household income. Participants are also expected to contribute to the project with volunteer hours or a donation of meals to the installation team.
After the installation of the solar panels, households are expected to see a $400-$1,000 drop in electricity bills over the course of a year. Solar panel installation has an expected life cycle of 30 years. The hope is that a new segment of the population can reap the savings from this renewable energy option without the burden of the expensive start-up costs.
While the cap-and-trade program in California is still one-of-a-kind in the United States and remains somewhat controversial, the solar panel initiative works to re-invest ‘non-green’ energy dollars into clean energy initiatives.
On the federal level, the U.S. Department of Energy provides state grants to improve the energy efficiency of the homes of low-income families. In Colorado, the state is partnering with DOE to create the Weatherization Assistance Program that is installing solar panels on households whose owners meet a low-income threshold.
Colorado is the first state to use these federal funds to install solar arrays. To qualify, residents must show that they are paying more than 4 percent of their household income on energy costs. The state strives to install 100 new arrays by the end of 2016.
State officials also hope that this initiative will help them achieve their state goal of “20 percent renewable energy goal by 2020.”
On both the federal and the state level, lawmakers will need to study and analyze the long-term impact including the upkeep of these installations and the actual energy savings dollars to ensure that the solar panel initiative does not prove to be a burden to the low-come homeowners.
Policymakers should also study the return on investment to ensure that the fiscal start-up investment is having a positive impact on the states respective renewable energy goals.
Overall, the low-income solar panel program shows promise, but it may be limited by the high start-up cost and limited impact to the community at large.