Are the Benefits of DERs Reaching Low-Income Communities?
- Posted on July 18, 2018
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The electric utility has been evolving in recent years to be more customer focused. Smart meters, mobile apps, distributed energy resources (DERs) and smart home technology – to name just a few – are giving consumers unprecedented control of their home energy usage.
However, these programs and services of the “utility of the future” may not be reaching all customers. Low-income consumers, who are perhaps best suited to benefit from energy-saving programs and tech since they spend a larger percentage of their income on electricity, often report feeling distanced from their utility’s efforts.
As we found in our “Spotlight on Low-Income Consumers: Revisiting Their Needs and Wants” report, low-income consumers, by and large, don’t see their utility as a trusted partner to help solve their problems and often perceive a number of hurdles to engaging in energy-saving programs, including the upfront costs associated with some technologies and the lack of agency to make changes as renters.
Yet, despite this disconnect, there are some efforts underway to include low-income consumers in the new energy programs and technologies, particularly renewable energy programs, which have a unique value proposition for this subset of customers.
Let’s take a look at two examples where renewable energy programs are being designed specifically for low-income consumers, one from a nonprofit institute in California and the other from an investor-owned utility in New York.
Working toward energy equity for all Californians
Based in Oakland, California, The Greenlining Institute is working to ensure that the benefits of DERs reach low-income communities and communities of color. According to Greenlining’s Energy Equity Director Stephanie Chen, low-income communities are disproportionately affected by fossil fuel generation and stand to benefit greatly from a transition to clean energy sources.
These benefits include not just lower monthly electric bills, but also better air quality, an influx of local jobs, more resilient homes and communities, and a sense of community pride that comes from producing clean, renewable energy directly in the community.
Greenlining is currently working on two projects in California that will deliver tangible benefits to low-income communities. The first is the Solar on Multifamily Affordable Housing (SOMAH) program, which will roll out later this year and provide up to $100 million annually over 10 years to install solar on rooftops and parking lots at affordable housing properties.
The bill that created this program also included provisions to promote local job growth and to ensure that renters – not just property owners – will realize benefits via savings on their monthly bills. In addition, the program provides renters with energy-efficiency retrofits, which can provide additional health and comfort benefits to the tenants. Some buildings will also have battery storage installed, which improves resilience.
The second major initiative for Greenlining is transportation electrification (TE), with an emphasis on ensuring that TE benefits the communities that need it most. According to Chen, about 40 percent of California’s greenhouse gas emissions are due to its transportation sector, and these pollutants disproportionately affect low-income communities and people of color, since these communities are more likely located near to major highways, ports and airports. For these communities, there are clear environmental and public health benefits from widespread TE. In addition, EV charging during the day can help tame the duck curve, ensuring that Californians get the most benefits from their investments in solar generation.
Greenlining’s TE strategy for California includes additional financial incentives for purchasing electric vehicles (EVs) for low- and moderate-income families, affordable financing provisions for these consumers, accessible EV charging for low-income communities and expanded car-sharing programs.
One of the most exciting initiatives, according to Chen, is electrified public transit. The batteries from large buses can be scheduled to power the grid when not in use, which can bring in additional revenue for the transit agencies. This, in turn, can allow these agencies to purchase more buses and improve services for the community.
Con Edison testing solar for historically underserved markets
In New York, the Reforming the Energy Vision (REV) initiative has been driving Con Edison to expand the use of DERs throughout New York City and Westchester County, and one part of these efforts is the Shared Solar Program, which aims to open participation in renewables to historically underserved markets, notably renters and low-income consumers.
While residential solar has expanded considerably in Con Edison’s service territory in the past several years, solar developers have not focused on low-income consumers since they see a lot of risk with credit scores and payment behavior. However, REV has enabled Con Edison, which is usually not allowed to own generation, to own and operate solar generation if there were customers whose needs were not being met by developers.
Con Edison presented their case to own and operate community solar to the New York Public Service Commission, and the program was approved in August 2017. Con Edison was enabled to spend $9 million in capital funds to add solar arrays to Con Edison-owned rooftops and facilities to deliver renewable energy to low-income customers.
The Share Solar Program expects to serve about 1,000 customers in the low-income electric program, and the customers who enroll will receive an additional bill credit from the solar on top of the credits they’re already receiving from the low-income program, which is about $10-20 on each month’s bill.
Since the initial Shared Solar Program will only reach a fraction of Con Edison’s low-income customers, Con Edison is focusing on community-based outreach to customers that live near the shared solar sites, those that pass the solar panels on their way to work, schools or the grocery and can see the connection between these renewable resources in their neighborhood and the credit on their bills.
A major aim of the program is to better understand low-income consumers and their interest in renewables, so that other solar industry players can be educated on the opportunities for serving this subset of consumers. It’s also important to note that the Shared Solar Program is only one of several programs under REV that aim to bring the benefits of renewables to low- and moderate-income customers.
The Shared Solar Program implementation plan was filed on November 30, 2017, and bids for the solar installations were received in March of this year. Operational solar is expected by the middle of next year, so it will be interesting to see the results of the program toward the end of the decade.
Lower-income consumers are an important group of customers for every electric utility; however, there are challenges that make this group hard to reach. For example, low-income consumers are typically less interested in new energy technologies, and they don’t often see their utility as a trusted partner to help solve their problems.
These hurdles can be overcome, however, as evidenced by the programs noted above and other successful, innovative programs throughout the country. As these programs in California and New York mature, it will be interesting to watch and see whether they succeed in engaging low-income customers. After all, the benefits of the smart energy future should be accessible to all – not only those who can afford it.