Community Solar for Low-Moderate Income (LMI) Households

Community solar is a “sharing program” where multiple participants benefit from a single solar array. This innovative approach enables people who may not have suitable rooftops for solar panels, such as renters or those with shaded roofs, to access clean, renewable energy.

However, these community solar programs help LMI households by making it affordable to acquire solar energy. They also provide the most cost-effective alternative to traditional solar installation by including incentives, subsidies, or various financing options to lower the upfront costs. Additionally, these programs save electricity bills up to 20%.

You need to know the benefits of community solar for low and moderate-income households (LMI). Also, let us discuss which states have successful community solar programs for LMI households like the “Solar for All” programs in New York, Illinois, and other notable states. In addition, you must know what government incentives and support are available for LMI Households and how they can participate in community solar.

What Are Low and Moderate Income (LMI) Households?

LMI (Low and moderate income) households in the United States are defined according to their income, which is measured by the AMI (Area Median Income) and income thresholds set by the Department of HUD (Housing and Urban Development).

• Low-income households have an annual income of less than 50% of the AMI.
• Moderate-income households have an annual income from 50% to 80% of the AMI.

For Example, in 2023, a family of four had an income limit of $80,000 for many years, which means that LMI households would typically earn less than $64,000 throughout the year.

However, these LMI households tend to face several challenges when it comes to accessing solar energy:

• High upfront costs including solar panel installation can be unbearable.
• Lack of financial resources or credit history to secure loans makes it inaccessible for many LMI households.
• Not owning a home complicates life for many LMI households. Because they are renters, the owners might not be willing to invest in solar installations, and renters wouldn’t have the authority to make such changes.
• Lack of awareness about solar program availability and incentives among LMI communities. And, this would lead to missing many opportunities regarding financial support or community solar programs.
• Renter’s difficulties in obtaining permission from property owners to install solar panels.
• Many individuals have trust issues due to their personal experiences with unethical marketers in the solar industry.

Community solar is gaining popularity as a beneficial alternative for LMI households. It allows multiple individuals to benefit from a single solar power system that is shared among them. Additionally, this sharing program lowers costs and removes barriers like high upfront costs or large roof space requirements. Moreover, electricity bills can be reduced without individual installations.

What Are the Benefits of Community Solar for LMI Households?

Community solar is a beneficial sharing program that comes with many advantages that are specially developed for LMI (Low-moderate-income) households in the United States, such as:

• Cost Savings: Community solar can greatly reduce electricity bills by 20% or more than that. LMI households receive credits on their utility bills by subscribing to community solar projects, making solar energy more affordable for those who struggle with high utility bills.
• No Upfront Costs: Participants in the solar sharing program will not have to invest upfront. This makes it easier for LMI households to use solar power systems without struggling for financial resources. Hence, this is a major factor that is advantageous compared to traditional solar installations.
• Accessibility for Renters: Renters won’t have to obtain permission from property owners to install panels, as the system is commonly shared, and no individual roof installation is required. As a result, renters will get wide access to solar usage with the help of a community solar program.
• Incentives: Community solar projects offer various beneficial incentives, including rebates, state and federal tax credits, and other financial incentives. These are mainly focused on making solar energy more accessible to LMI households and giving priority to low-income participants. Hence, it is ensured that these LMI participants gain more benefits from their subscriptions.

Which States Have Successful Community Solar Programs for LMI Households?

Several states have successfully established themselves with community solar programs focused on LMI (Low- and Moderate-Income) households. Here are the 6 popular states that are recognized for their innovative approaches:

1. New York
2. Illinois
3. California
4. Massachusetts
5. Minnesota
6. Oregon

New York’s Solar for All Program

The “Solar for All” program in New York focuses mainly on extending the benefits of environmentally friendly energy to LMI (Low- and Moderate-Income) households.

Participating in community solar projects is advantageous, as the people involved save about $5 to $15 per month, which sums up to savings of $60 to $180 per year.

In addition, New York’s program reduces harmful emissions of GHG (Greenhouse Gas) and promotes a far healthier environment.

For example, a household gains a $10 credit on its electricity bill upon enrolling in New York’s Solar for All program. Moreover, this credit is applied automatically, so neither a change of electricity provider nor additional costs have to be worried about. As a result, greater savings on energy bills can be observed within a year.

Eligibility Requirements for New York’s Solar for All Program:

• A resident of New York State.
• Either the owner or renter, who pays their electricity bill.
• Income Requirements of Households must be below 60% of the state median income (can include participants of utility or federal assistance programs).
• Electricity usage of at least 1,000 kWh during the last 12 months.
• The location must be within the service territory paying SBC (System Benefits Charge). Residents will not be eligible if they are staying on a distant island and receiving their electricity from a municipal utility.

Illinois Solar for All Program

The ILSFA (Illinois Solar for All) is a program initiated to provide affordable solar energy solutions to LMI (low—to moderate-income) households, renters, non-profit organizations, and public facilities throughout Illinois.

As part of the state’s broader efforts to promote renewable energy, this program also helps reduce electricity costs for all eligible residents. With the ILSFA program, solar energy becomes very affordable by offering monthly bill credits, which are very helpful in decreasing energy costs.

For Example, a renter’s family in Illinois that has joined the community solar program will benefit from a $30 credit on their electricity bill per month. Moreover, the solar panels will be installed at the participant’s residence without any requirement for initial payment, so they can immediately start saving on their energy bills.

Eligibility Criteria for Illinois’s Solar for All Program:

• Household income eligibility must be at or below 80% of the AMI (Area Median Income). Hence, this program ensures that it is available to those who might benefit the most from reducing energy costs.
• Participants of ILSFA, either the homeowner or renter, must be a resident of Illinois.
• Electricity consumed in the past 12 months should be at least 1,000 kWh.
• The location must be under a service territory that is paying the System Benefits Charge.

Other Notable States

Other than New York and Illinois, several other states across the United States have successfully implemented community solar programs to benefit LMI (Low- and Moderate-Income) households. Here are some of the 4 notable states:

1. California: California’s community solar programs are very advantageous as they offer greater savings on electricity bills for LMI households. In addition, this state has successfully developed many beneficial initiatives, like the California Solar Initiative. These incentives allow residents with low incomes to participate in community solar projects.

2. Massachusetts: Massachusetts has established the SMART (Solar Massachusetts Renewable Target) program, focusing on LMI households. Hence, with this program, families receive great discounts on their solar energy costs.

3. Minnesota: The Minnesota Community Solar Garden program enables LMI households to gain access to regional solar projects. Therefore, participants benefit from reducing energy costs, earning credits on their utility bills, and getting more exposure to solar energy.

4. Oregon: Oregon’s Community Solar Program highlights broad support for LMI households. This program delivers rebates and other financial incentives for those who participate in accessing solar energy and promotes environmental fairness.

What Government Incentives and Support Are Available for LMI Households?

Generally, LMI (Low- and moderate-income) households in the United States are provided with advantages to numerous government incentives. Additionally, many support programs are specifically intended to help them achieve financial stability and improved living.

Here are some of the key incentives available for LMI:

1. WAP (Weatherization Assistance Program)

The U.S. Department of Energy administers WAP, which helps in reducing electricity costs for low-income households. Also, this program increases their home’s energy efficiency. In addition, there are other services including health and safety assessments, building shell improvements like insulation, air sealing, windows, doors, and lighting installation.

2. CDBG (Community Development Block Grant) Program

The CDBG program sends federal funds to local governments to encourage activities that help in the development of the community, benefitting LMI individuals. On top of that, it provides funds for affordable housing, infrastructure improvements, and other public services.

3. LIEAP (Low Income Health and Energy Assistance Program)

LIHEAP is funded by the U.S. Department of HHS (Health and Human Services), which comes forward to help low-income households in accessing their home energy needs. And, this program includes heating and cooling bill assistance, repair, or replacement of heating and cooling units, and emergency services to handle electric utility shutoffs.

4. HEEHRA (High-Efficiency Electric Home Rebate Act)

With the HEEHRA program, participants get a rebate of up to $14,500 for authorized HVAC and electric appliances. As a result, LMI households can upgrade to more efficient appliances, which will further reduce energy costs and make it easier to manage utility expenses.

How Can LMI Households Participate in Community Solar?

LMI households can benefit a lot by participating in a community solar program, which provides usage access to renewable energy and allows saving more on their electricity bills.

Here’s a simple, step-by-step guide on how LMI (low- and moderate-income) households can join a community solar program in the United States.

STEP 1: Check Participation Eligibility

The foremost and important step is to verify whether your household meets the income eligibility criteria so that you can opt for the state’s community solar program. And, this means that according to the AMI (Area Median Income), your income should be below a certain percentage.

STEP 2: Research Local Community Solar Programs

You must start finding ongoing community solar programs in your area or use online marketplace websites to find local community solar farms.

STEP 3: Contact Community Program Administrators or Solar Providers

When you feel interested in the community solar program, you must directly reach out to the administrators. And, they will provide you with further details about the program, the application process, how their program works, costs, and benefits.

STEP 4: Check and Thoroughly Review Contract Terms

Once you decide to move forward, it is crucial to evaluate the agreement by carefully reviewing the contract terms. You must ensure that you have completely understood your financial commitments and the possible savings you are going to make out of it.

STEP 5:Submit Application and Enroll in the Program

Fill up the administrator-provided application form by attaching the necessary income proof and other documentation to enroll in the community solar program.

STEP 6: Enjoy and Monitor your Benefits

You must track your benefits of electricity bill credits, reflected in your energy bills. However, most community solar programs automatically apply the credits.