'Solar For All' Grants Could Boost Community Solar by 25 Percent

Following $20 billion in grant disbursals last week, the U.S. Environmental Protection Agency (EPA) is expected to announce the winners of the $7 billion Solar For All competition any day. 

Solar for All is a competitive grant program that aims to deliver the savings and benefits of small-scale solar and energy storage systems to low-income households and households in disadvantaged communities. Administered by the EPA, the program is part of the $27 billion Greenhouse Gas Reduction Fund created under the Inflation Reduction Act of 2022.

The majority of the organizations up for funding are focused on programs to expand community solar, with 33 of the 35 Solar For All applicants including community solar in their applications, according to an analysis from the Clean Energy States Alliance (CESA). As the name implies, community solar programs allow residents to purchase energy from a shared solar installation, even if they can't put panels on their own roofs. 

Conservative estimates indicate community solar capacity in the U.S. would jump by more than 25 percent if these 33 applications are awarded, with most of that growth occurring in low- to moderate-income communities.

Community solar can boost local economies while providing clean energy

Along with clean energy, community solar can bring new economic development from jobs created to build solar energy facilities and from the ongoing maintenance needed to keep those facilities running, said Bruce Stewart, CEO of Perch Energy, a Massachusetts-based community solar servicer. “It also gives local community members an opportunity to subscribe,” he said.

Customers participating in these projects pay to access a portion of the electricity generated by the shared community solar array, usually in the form of a monthly subscription fee. The utility company compensates the community solar provider for the electricity supplied, and each subscriber earns a credit equivalent to their share of the generated energy's monetary value. These credits are commonly deducted from subscribers' monthly electric bills, ultimately lowering their overall electricity expenses.

Community solar subscriptions can provide savings to consumers ranging from 5 percent to 20 percent depending on local regulations, Stewart said.

Low-income Americans spend the most on electricity: Equalizing access to solar can help

Even as the cost of solar energy has declined, half of Americans face affordability, installation or other accessibility issues that keep them from installing rooftop solar panels. Most solar power users are wealthier than the average U.S. consumer. In 2022, the median income for a household with solar power was about $117,000 per year, compared to a U.S. median income of about $69,000 per year for all households and $86,000 per year for all owner-occupied households.

Lower-to-moderate income households also spend 8.6 percent of their income on energy costs, roughly three times more than households with higher income.

Community solar can help, but first the sector has to convince residents it's worth their time. Most outside of the sustainability community are not familiar with community solar, so advocates are challenged to raise awareness among potential customers about the availability and benefits of these programs.

It's easier in some states than others. In some jurisdictions, for example, solar discount credits appear on a separate bill, confusing and discomfiting customers. “That’s a big point of unease for folks," Stewart said, meaning state legislators — along with the EPA — have a major influence on how community solar scales up. 

States including Massachusetts, New York, Maryland, New Jersey, Maine, Minnesota, Illinois, and Virginia recently enacted or are expanding regulations that support community solar programs, Stewart said. 

“We’re seeing states like New Jersey that moved from pilot programs where you had a separate bill to enabling all of the credits to [show up] right on the customer’s utility bill,” he explained. “Making it simple and easy for folks is great." 

More than 7.3 gigawatts worth of community solar is already up and running in the U.S., enough to power over 5.2 million homes. Since the Solar for All competition was announced, a growing number of U.S. states have moved to further promote these programs as a way to bring more renewable energy into their local electric grids. 

“We’re seeing that happen in states with existing community solar, but we’re also seeing lots of states that have been on the sidelines that are watching these programs, seeing the positive economic development that’s happening, seeing how it actually is helping shift to a broader set of renewables that will always have a mix in the electricity grid,” Stewart said.

The EPA will announce the grant awards in the Solar for All competition later this month.