Collective Solar Purchasing Campaigns: Addressing Socioeconomic Barriers to Residential Solar Power

By Rachel Pemberton, Law & Policy Clerk

Solar power has been touted as the future of energy, but its high upfront costs have long been one of the largest barriers to the spread of residential solar energy systems in the United States. Only a decade ago, the cost for installing solar panels on a residential home could easily spiral into the tens of thousands of dollars before tax credits, and energy savings that helped defray those costs would take several years to offset the homeowner’s upfront costs. While solar panels have become more affordable in recent years, they remain a significant financial investment for most Americans.

In addition to hampering the deployment of residential solar power in general, the high upfront cost means that low-income communities—often those who spend the highest portion of their incomes on energy bills—are less likely to be able to afford a solar energy system. This means that those who could most benefit from the long-term cost savings and environmental perks associated with solar power usually are not able to do so. Even for those who care about the environment, making such a large financial investment may simply not be feasible. This is especially true in communities where food insecurity and concerns about paying for healthcare are routine.

Access to solar power and renewable energy in general remains a luxury that is largely afforded to only the most privileged among us, although this is changing. Still, in addition to low-income communities, minority communities are far less likely than white communities to have widespread use of rooftop solar systems. This may bebecause people of color are less likely to know someone who works in the solar industry, or because they simply don’t see many solar panels in their communities.Whatever the cause, even after accounting for differences in income and homeownership, minority communities—those where at least 50% of the population is African American and/or Latino—have 30% - 69% less rooftop solar than communities that are primarily white or have no racial or ethnic majority.

So, how do we address the socioeconomic barriers to solar power for low-income and minority communities (and for the American people in general)?

Collective solar purchasing campaigns offer a promising opportunity to substantially reduce the procurement and installation costs of residential solar energy systems for millions of Americans. These campaigns not only reduce our country’s dependence on fossil fuels, but also save participating homeowners hundreds, if not thousands, of dollars in energy bills every year. One of the first of these campaigns arose in Southeast Portland, Oregon, in 2009 as a grassroots effort among homeowners who wanted to confront the financial and logistical barriers associated with residential solar power. Within its first six months, the “Solarize Southeast!” campaign had installed solar systems on 130 homes. While the market price at the time for a single three kilowatt (kW) system was about $27,000, after bulk discounts and state and federal tax credits and incentives, each household paid only $2,000 to $3,000 for their system. The bulk discount alone was responsible for about $9,000 in reduced costs per residence.

Collective solar purchasing campaigns have had similar success across the country. In San Diego, about half of the 192 homes that make up the Broadway Heights neighborhood have rooftop solar systems. Residents in this predominantly African American community have seen their energy bills fall from $200 to $300 per month to $50 or less. In Washington D.C., more than half of the townhomes in the affordable Southern Homes and Gardens cooperative have rooftop solar systems. Another predominantly African American community, residents here have seen reduced energy bills to the tune of less than $20 per month.

Neighborhoods like Broadway Heights and Southern Homes and Gardens illustrate that in addition to overcoming cost barriers, collective solar purchasing campaigns built around community engagement can make access to solar power more attainable for minority communities. In Broadway Heights, with the help of the nonprofit GRID Alternatives, the neighborhood was able to incorporate community volunteerism and job training for local youth of color into their solar campaign. Additionally, at a majority-black and low-income high school in Nashville, Tennessee, clean energy advocates of color have built a solar array to serve as an educational model and engage the community in discussions about residential solar energy systems. Thus, regardless of what “engagement” looks like in a given community, using creative outreach strategies to increase participation in solar purchasing campaigns can help to overcome the racial and ethnic disparities currently associated with solar energy.

With solar panel prices continuing to fall, collective purchasing campaigns, especially when combined with tax credits and other incentives, offer homeowners the opportunity to invest in solar power for a fraction of the cost. Campaigns designed around community engagement are particularly effective at increasing participation and help empower marginalized communities to realize near-energy-independence. The reduced upfront cost of solar also means that homeowners can offset the cost of installing solar power with energy savings in as little as one to two years, and once the system has paid for itself, those homeowners will continue to enjoy savings on their energy bills for decades to come.