One of the US solar industry’s biggest challenges is the low rate of solar panel adoption among low-income individuals.
A 2021 study from Lawrence Berkeley National Laboratory found that the median income of households with residential solar was $110,000. This was 43% higher than the US median household income. In addition, disadvantaged communities only accounted for 11% of solar panel installations, in spite of representing 18% of the population.
The cost of purchasing and installing solar panels can amount to tens of thousands of dollars, even with the availability of a 30% federal tax credit. Moreover, homeowners cannot take advantage of the credit if they have a low tax liability or receive a tax refund.
Renters also don’t qualify for the 30% tax credit. Low-income individuals in the US are disproportionately likely to rent. In California, two-thirds of low-income households rent their houses instead of owning them.
Fortunately, the recently passed Inflation Reduction Act (IRA) will make solar energy far more accessible to low-income families.
Last June, as part of the IRA, the Biden administration announced a new tax law that allows solar energy nonprofits to claim the 30% tax credit as a direct refund. This enables them to pass on the savings to low-income customers.
The new provisions are already helping customers of Georgia’s BRIGHT solar leasing program.
The purpose of the Georgia BRIGHT program, funded by the nonprofit Capital Good Fund, is to make solar installations more affordable for households earning less than $100,000 annually. Participants don’t have to pay any upfront costs. In addition, they can expect to save approximately $400 per year on energy bills, according to Grist.
Solar leasing has traditionally been offered by for-profit companies. However, recent changes in tax law have opened up opportunities for non-profits to provide this service at lower costs.
The Georgia BRIGHT program is currently in a pilot phase, servicing approximately 200 buildings. Savannah resident David Morgan, one of the pilot program’s customers, is already saving roughly $100 a month on his electricity bills. Since solar panels have a typical lifespan of 25 to 30 years, Morgan could save up to $36,000 over the system’s duration.
The ultimate goal is to expand the program nationwide. Several other states have expressed interest in similar leasing programs.
Image Source: Andy Posner
