There have been many successes in the solar energy market in the past several years. More solar energy has been installed more quickly and at lower prices than anyone had dared to predict. But for all of its successes, one challenge that remains is how to enable lower income customers to take advantage of solar energy. In our last issue, GET highlighted efforts of the VT Law School being made to facilitate more solar in these communities. This month, we are discussing related initiatives being pursued by one of the local solar energy developers, Norwich Technologies of White River Junction, VT and West Lebanon, NH.
John Langhus, Vice President for Norwich Technologies says, “If we hope to meet our region’s clean energy goals and continue to expand this great industry, we have to be able to sell solar easily to everyone, with financing options and regardless of income.” Luckily, solar is no longer the luxury item it was even a few years ago. “Today, any electricity customer in Vermont, New Hampshire or Massachusetts should be able to save money on day one by going solar,” according to Joel Stettenheim, Norwich Technologies’ President and Co-Founder. “The challenge is making credit more widely available for more customers. That’s where we have turned our focus.”
Broadening the customer base for solar is not just an economic goal, but also a policy goal. As renewable energy has increased its penetration of electricity markets, opposition to increasing renewables has centered on the argument that the incentives paid for renewable energy are borne by all ratepayers in favor of a small (wealthier) group of renewable energy customers. Norwich Technologies argues that the solution to that is not to eliminate solar incentives, but rather to make sure that all customers who want to go solar can do so. Here are a few initiatives that they are pursuing to achieve that goal.
In both Vermont and New Hampshire, local housing authorities help to deliver affordable housing to the elderly, the disabled and families in transition. Renters as a group are among the hardest to solarize because they move more frequently, often have less developed credit profiles and most importantly, do not own the homes in which they live so do not have the authority to solarize them. In such cases, landlords must choose to solarize on behalf of their renters. Increasingly, local housing authorities have become active in seeking solar for their clients. Norwich Technologies’ first such project was for the Springfield Housing Authority. According to John Langhus, “Unlike a private landlord, a public housing authority does not pay taxes and so can’t take advantage of federal and state tax credits. This puts them at a significant disadvantage.” To solve this, Norwich has developed relationships with investors who are interested in helping schools and nonprofits to solarize. “It was a straightforward transition to get investors who finance solar for schools to do so for a housing authority,” said Langhus. For Springfield, Norwich brought in New Energy Equity, a solar investor from Annapolis, MD.
Others have succeeded in substituting the tax credit with grant funding. That was the approach followed by Norwich Technologies’ customers at the Maple Manor housing development in Newport, NH. Maple Manor provides high quality housing options for qualifying low income elderly and disabled persons. Norwich has just completed a more than 100kW solar array on the roof of the development, which will supply clean energy to over 25 families. Rather than bring in a third party investor, the customer arranged for a federal grant through the USDA’s Renewable Energy Assistance Program (REAP). The REAP grants are widely available to organizations and families in non-urban areas of the region and are well-sized for making up for a lost tax credit for a non-profit or public solar customer.
New Hampshire and Vermont are home to hundreds of Resident-Owned Communities (ROCs) where residents live in manufactured homes arranged together under homeowner’s associations (HOAs) that own the common property of the community. Norwich Technologies is working with the New Hampshire Community Loan Fund, one of the main lenders to ROCs in New Hampshire, exploring how to bring solar energy to these communities. Joel Stettenheim says, “The HOAs in these communities have independent credit histories and so are well-placed to be owners of a large community array.” The hope is to develop a standard set of contracts that can be used to finance community solar arrays for many such communities together. Langhus says, “There are huge time and cost advantages in doing repeat projects with the same lenders using the same documents. This is one of the biggest differences between buying a solar array and, say, a car or a new washing machine.”
Single Family Homes
Many low income households whose income is steady are able to finance their own homes. The cheapest time to go solar is when you are building, renovating or refinancing a home. Stettenheim explained, “The hardest part about financing solar is that the solar arrays have expected lives of 30 years or more, but most solar loans are limited to 10 or 15 years. But if you can simply add the cost of the solar to the cost of the house, then it just becomes part of the overall mortgage – often amortized over 30 years at very low interest rates.” With 30-year financing, the tax credit is less important. “With 20 year or longer financing, our customers can immediately save money by switching to solar, even without a tax credit. Customers who can take the tax credit simply save that much more.” Norwich’s first projects of this kind have been with Neighborworks of Western Vermont (NWVT). NWVT funds and manages many projects from multi-family developments to single family homes. They have partnered with Norwich to add solar onto three new homes they are currently building in the Rutland area. “We are very proud to be working with Neighborworks,” said Stettenheim. It is an excellent marriage of our mission to share the benefits of solar energy as widely as possible with Neighborworks’ mission to improve the lives and livelihoods of their clients here in Vermont.”
“We are at a critical point in the fight for a clean energy future and a halt to catastrophic climate change,” says Langhus. “A few people have become early adopters of solar and other technologies which has helped us to dramatically lower the cost to consumers. We should capitalize on this success, and build on that momentum. We are committed to insuring that all of our friends and neighbors who want solar can get solar, and that each of us is empowered to improve our own lives and those of our loved ones.”