Solar energy generally comes in two varieties: onsite rooftop solar, which we recently discussed with ICAST’s National Solar Solutions Manager, Walter Cupa, and community solar. Today, ICAST’s Director of Community and Utility Solar Development, Sam Lipman, weighs in on community solar and what it means for energy efficiency and saving money for our communities:
Community solar is an arrangement wherein solar energy generated through an array, typically off-site, is sold to various customers, such as individuals or businesses. Onsite or rooftop solar, on the other hand, is typically only accessed by the individuals within the building it is attached to. Through virtual net metering, which allows energy produced by the community solar array to be credited to its subscribers, community solar can drastically reduce energy bills for participants. The community solar projects that ICAST works on save their subscribers a minimum of 20% on their energy bills, often more.
On average, low-income households spend about 8.1% of their income on energy bills, whereas non-low-income households spend around 2.3%. In general, the higher a household’s income, the less of their overall income they spend on energy bills and other necessities. With rising inflation and housing prices, ensuring that America’s low-income families can cover their necessities is more important than ever.
ICAST does not participate in traditional community solar programs, which are state-sponsored and regulated by state public utility commissions. These traditional programs are highly competitive, with many developers competing for limited allocation. Much of this allocation is not earmarked for a particular class of subscribers, and because low-income residents typically have poor credit scores and often live in apartments with high turnover, very little of this allocation gets through to them. Instead, ICAST collaborates with rural electric co-ops, municipal utilities, and Tribal utility authorities to design, develop, and build solar generation systems within the respective utility’s distribution systems. These community solar systems are often owned by the respective authority, bypassing the traditional community solar funding allotment system. As part of these projects, ICAST guarantees that the respective authority sells the generated solar to their identified low-income subscribers at a minimum 20% discount, ensuring that low-income community members benefit from the solar. Additionally, the aforementioned authorities typically operate in disadvantaged communities that trend heavily towards low-income status: Tribes, Tribal Nations, and rural communities have exceedingly high poverty rates compared to the rest of the US, for example. By working with such utility authorities, ICAST is categorically ensuring that the most financially distressed community members can benefit from the deep cost savings of community solar.
In addition to direct utility bill benefits, ICAST’s community solar programs offer a variety of other benefits. Community solar eliminates generation and technology supplier transmission and delivery charges for the utility company or authority while ensuring energy independence, grid reliability, and grid resilience within the utility’s distribution systems. ICAST also ensures that its community solar projects offer prevailing wage jobs and, when possible, workforce training to the local community, particularly disaffected youth. This job training allows low-income community members to enter the solar development workforce, leading to good-quality jobs that further impact the community beyond the initial project.
Currently, ICAST has more than $80 million of community solar projects in various stages of development. Here are just a few examples:
Tribal and Rural Electric Co-op: ICAST is working with the Taos Pueblo and Kit Carson Rural Electric Co-op to install 5MWac of solar alongside 10 MWh of storage on Taos Pueblo lands. The assets will be owned by Kit Carson and interconnected to their distribution system for the benefit of the Pueblo, whose members will receive substantial electricity savings and income from excess electricity sold to other Kit Carson members.
Tribal: ICAST is working with the Tohono O’odham Nation to install two 5MWac solar arrays and two 10MWh battery energy storage systems at two different sites on the Nation’s land. The assets will be owned and operated by Finance for Impact, ICAST’s affiliated 501c3 nonprofit investment firm, to ensure that the Tribe does not have to take on burdensome debt. The energy generated will be sold to the Tribal utility authority through a power purchase agreement at substantially lower cost compared to that of their present supplier, Tucson Electric Power. The combined generation capacity will service up to 20,000 households, enough to power the entire Nation. After 6 years, once debt has been paid off via the sale of generated electricity, the utility authority has the option to purchase the solar and storage facilities, ensuring energy sovereignty and reliability to the Nation while generating jobs in energy production in the Tribe.
Municipal: ICAST is working with the City of Socorro, NM, to install a 5MWac solar array and 10 MWh of storage on private land within the city limits. The assets will be owned by the city and interconnected to its planned electrical distribution system for the benefit of its residents and businesses. Socorro had a median household income of approximately $43,350 in 2021, significantly lower than the state’s average of about $60,000. This discounted renewable energy will ensure economic stability for this low-income community while creating good-paying jobs in the operation and maintenance of the installed assets.
Rural Electric Co-op: ICAST is working with the rural electric co-op Energy United on two 5MWac solar arrays and accompanying storage systems on private land within the co-op’s service territory. Both projects will be interconnected to Energy United’s distribution system and be owned and operated by Finance for Impact. This project will assist rural low-income community members while also ensuring grid reliability and resiliency in a state recently damaged by inclement weather.
However, recent executive orders issued by the Trump administration have caused serious turmoil in the community solar sector. Many of these projects typically rely on funding and incentives through the Bipartisan Infrastructure Act and Inflation Reduction Act (BIL/IRA) that funnel into solar-focused buckets, such as Solar for All. With BIL/IRA funding for energy efficiency and renewable energy suspended for the next several months, community solar projects such as those above may not be financially feasible despite their ability to tangibly improve thousands of community members’ lives.
We’ve long served disadvantaged and low-income communities across the nation here at ICAST with the aim of promoting energy efficiency and economic growth. As the US grid infrastructure ages and energy demand is expected to double or triple in some states over the coming decades, it’s more important than ever to produce reliable and cheap domestic energy that can sustain the US for years to come. With ICAST’s community solar programs, we ensure that these benefits extend to our low-income communities amidst rising living costs while also strengthening US energy production.