Low-income community solar in Colorado: Hand-up, not handout

Editor’s note: An expanded version of this article will appear in the upcoming issue of Solar Mainstream, SEPA’s feature magazine. Look for it online in September and at Solar Power International.

For most utilities, solar and low-income energy assistance programs are an uncommon pairing. Typically, bill assistance and energy efficiency programs have been considered the higher-priority and more cost-effective options.

But Colorado is now upending those assumptions with groundbreaking community solar programs specifically designed for low-income customers.

Grand Valley Power, an electric cooperative in the western part of the state, recently flipped the switch on a 24-kilowatt (kW) solar farm — with kWs in AC; the project is 29 kW DC. A group of eight qualified low-income customers are now each receiving bill credits for a portion of the power generated by the project’s 112 panels.

The project, which went online the end of May, is a utility-owned community solar array built in partnership with GRID Alternatives, a nonprofit working to provide access to solar to low-income communities. Estimated savings per customer could be up to $600 per year.

Ground-breaking for the GVP-GRID low-income community solar program in March. The project went online in May.

The commissioning ceremony — which capped a two-day “solarthon” that drew more than 150 volunteers to help complete the project — also marked a public kick-off for a state-funded program aimed at building a pipeline of low-income community solar projects.

Speaking at the GVP-GRID site, Joseph Pereira of the Colorado Energy Office announced a $1.2-million grant opportunity aimed at putting at least five similar low-income community solar programs online over the next two years. After a competitive bidding process, the office announced on Aug. 17, that GRID has been named the program administrator.

“The goal is to install hopefully a megawatt of capacity on these different projects and try to serve a minimum of 300 customers,” Pereira said during a recent phone interview.

“We’re open to flexibility,” he said. “We think the community solar conversation is just starting, and the models are just developing. The conclusions aren’t really written yet.”

Barn-raising community solar

Derek Elder, member services manager at GVP, describes the co-op’s low-income community solar program as “a hand-up, not a handout.”

GVP and Housing Resources of Western Colorado, a local housing nonprofit, are partners in marketing the program and identifying potential subscribers. Program participants are then prescreened by GRID.

To qualify, they must earn no more than 80 percent of the area’s median income — $48,550 for a family of four — and they only get bill credits on their portion of the project for four years.

The first group of eight will then have the opportunity to requalify to stay in the program or be replaced by a new group of low-income customers for another four years, a pattern that will be repeated throughout the project’s estimated 20-year life span.

The bill credits are portable — if a program participant moves to another location in GVP’s service territory — but limited to no more than 90 percent of each customer’s average monthly energy use, based on past consumption records. Elder explained the cap as an incentive to encourage participants to cut their bills even further through additional energy efficiency measures.

“If you do a little work, you’ll be at 100 percent,” he said. “That way, participants have a little skin in the game.”

Read the Solar Electric Power Association’s (SEPA’s) case study of the GVP-GRID project here.

On the financing side, GVP provided the land and distribution infrastructure for the project, while panels, inverters and racking were provided by some of GRID’s corporate partners — SunEdison, Enphase and Iron Ridge Racking. Actual construction was done on GRID’s “barn-raising model” with a combined crew of GRID staff, solar job trainees, students and community volunteers.

“We had employees, board members out there,” Elder said. “The participants, they were out there, helping to build the array. They actually signed the backs of their panels.”

Two and a half months on, the program “is working great,” he said. “I would say the average person is saving $50 to $60 per month in bill reductions.”

The program has no upfront buy-in costs, although participants do pay a 2-cent per kilowatt-hour administration fee split between GVP and GRID. In addition to the eight people currently in the program, another 10 are on a waiting list.

The estimated yearly savings of around $600 per customer take into account that fee and Colorado’s seasonal variation in solar output, Elder said.

Co-op staff are already discussing possible program expansions and modifications, he said. One possibility is finding a way to stagger the rotation schedule for new customers so that every year, a few could get into the project, rather than having to wait four years.

“The importance of this program is providing the assistance and providing it in a timely manner. If they have to wait three years to get the assistance, they may be a long way behind” economically, Elder said.

Setting the stage for the future of low-income community solar

While recognizing the leadership role GVP and GRID have played in Colorado, Pereira said the state program is intended to build on, rather than simply replicate their work.

“We’re hoping to learn a lot through this project, to set the stage for the future of low-income community shared solar,” he said.

“What we want to see are models that will be scalable across a wide range of geographic landscapes and . . . applicable in a wide range of utility partnerships,” added Tom Figel, policy and utility relations manager in GRID’s Colorado office.

Individual projects could range from 50 to 500 kW, Pereira said. Also, the state funding will have to be leveraged with matching grants, whether in financial or in-kind donations, he said.

While GRID is not yet naming names, Figel said, discussions on potential partnerships are underway with nine utilities.

SEPA staff went up on the roof with GRID in Baltimore. Read all about it here.

The Colorado programs have been pivotal for GRID, which started in California installing low- or no-cost solar panels on the rooftops of individual low-income homeowners — a model it has extended to Colorado and a number of East Coast states.

But Colorado’s status as a hub for community solar — with supportive state laws and a growing number of projects — pushed the organization to evolve, said Kristina Sickles, GRID’s development director for the state.

Specifically, low-income community solar provides a contrast to installing the same amount of solar on the rooftops of individual low-income homes. With economies of scale, it can be installed at a lower cost and, in the case of the GVP project, potentially serve more people — up to 40, if eight participants are rotated through each four-year cycle.

“To really understand the landscape of Colorado and how GRID could fit in, that is the direction we had to (take),” she said. “How can we leverage the partnerships and economies of scale of community solar to make solar something that can provide a significant economic benefit for all partners in the project?”

High targets for lowering energy costs

The GVP-GRID project — and Colorado’s low-income community solar program — evolved out of both a concern for easing the burden of energy costs on low-income households and GVP’s own experience with a previous community solar initiative.

The average Coloradan pays about 4 percent of their income on energy costs, split between natural gas for heat and electricity for other power, said Pereira. But lower-income households pay more, in some cases as much as 10 percent, he said.

Solar plus energy efficiency are seen as a potent combination for lightening the load, Sickles said.

“When people are able to divert their funds to other family needs, they are more self-sufficient in the long term,” she said.

Launched in 2011, GVP’s earlier community solar program, a 17-kW solar farm — again, in AC; 19 kW in DC — showed the importance of careful project design and attention to local markets.

SEPA is developing new community solar models for utilities across the country. Read more here.

The project was targeted at co-op members who, for various reasons, might not be able to install rooftop panels — for example, renters, or homeowners with roofs that are either shaded or don’t have a good solar orientation. But initial customer enthusiasm for the program waned due in part to relatively high buy-in costs, $900 per panel, and low estimated savings, $50 per panel per year for a term of 25 years.

Even with a series of cuts in upfront buy-in costs — a $50 reduction per panel each August, down to a floor of $700 — and a zero-interest, on-bill financing option, subscription currently sits at just under 50 percent.

With such changes, GVP’s community solar may be able to compete with rooftop panels on price, Elder said, but not on the “sense of independence” customers may feel with a home solar installation.

“We can’t fill that void with community solar,” he said.

For Figel, the GVP low-income community solar project reinforced GRID’s focus on industry partnerships — particularly with utilities.

“Utilities, cooperative utilities are implementing programs for all their ratepayers; they take great pride in having ownership over those projects, being partners in how those programs are designed,” he said. “As we try to expand low-income access that is something we will take forward. We will maintain a focus on strong utility partnerships.”

K Kaufmann is SEPA’s communications manager. She can be reached at [email protected].

Mike Taylor is a consultant for SEPA.