Solar for All program gets a federal boost

The Inflation Reduction Act passed into law in August and with it, the largest investment in climate change mitigation ever passed through Congress.

At a Solar United Neighbors info session in late August, DC Program Manager Sukrit Mishra talked about the bill with excitement for what it means for solar in the District. “We’re still trying to unwrap the whole legislation,” he told attendees, “but it has a big impact on energy savings.”

Over the past couple decades solar power has been mired in a perceived fog of confusing legal frameworks and prohibitive expenses; a niche product for the wealthy that would take more time and money to understand and implement than it was worth once it was on your roof.

Mishra and others are fighting against this. “Solar used to be a niche product 10-15 years ago. The process look[ed] complicated, it’s not anymore. Prices have come down almost three times since then.”

In the late 2000s, the early acolytes of solar in the District were busying themselves with raising awareness, lobbying the DC Council for increased subsidies, and preparing to go to war with Exelon and PEPCO over the inclusion of residential solar in their business model. Akili West was one of these acolytes, a resident of Ward 8 and veteran of the energy industry.

“In the early days, it was the wild, wild west. Everybody was educating themselves and coming up with their own setups,” he says. “Amid all of that, the solar coops were born. Some were stronger than others, as you can imagine, because of financial means, education, and access to the wider picture. Anya Schoolman was instrumental in bringing everybody together.”

Schoolman, with the help of her twelve-year-old son and his friend, founded the Mt. Pleasant Solar Cooperative, after rallying a group of neighbors to go solar as a way to offset the high cost of individual retail solar installations. It was from this that Solar United Neighbors was borne. At their info session, Mishra boasted the role of the District Office of Energy and the Environment (DOEE)-partnered nonprofit in transitioning over 750 people in the District to solar energy and running 361 solar coops nationwide. As Mishra lays it out, a solar coop’s role in the process is to act as a liaison and burn off some of the pricey and byzantine fog around solar energy.

“It’s really accessible,” he posits. “We try to make the process as easy as possible for anyone who applies for the coop. Once you sign that contract, there is a wait of 3-4 months which entails the permitting process, legislation, documentation, all of that stuff. That includes the installer submitting documentation to PEPCO which is out of our control but in terms of the front-end stuff like the application, consultation, and evaluation of the contract, we walk the consumer through the process at no cost to them. The only cost is the installation of the system which is paid directly to the installer.” Another big part of SUN’s coop model, he says, is energy equity.

The Inflation Reduction Act seemingly promises to help with that. According to Thomas Bartholomew, the DOEE’s Branch Chief for Renewable Energy and Clean Transportation and Administrator for their Solar for All program, many of the new tax credits in the act are targeted specifically at solar benefits for low-income communities.

This is achieved partially through the legislation setting aside funding for longer-term tax savings for those that go solar. These savings are measured in Investment Tax Credits. According to the Solar Energy Industries Association, these credits are “federal tax credits claimed against the tax liability of residential, commercial, and utility investors in solar energy property.”

Prior to the Inflation Reduction Act, those credits were 26% in 2022 and were supposed to decline to 22% next year and then disappear altogether. “As a credit to this bill, this year officially if you get solar installation done, its going to be at 30% and will remain there through 2032 and then will go back down to 26% after 2032.” Mishra explains, “That’s the big federal benefit for solar owners in the residential sector.”

This is the longest solar tax credits have ever been extended which Bartholomew believes is a signal to investors that solar is going to be around for a while. What this means for the District is more private capital for development and catalyzation of federal funding. In an ideal world, this also means more community solar.

As Akili West puts it, “In order to use public money, it would be very wrong of us to push this for the people that had the money and could do it otherwise and not for people that not only don’t have the money but don’t have a roof to put it on. We need to be thinking about ways to increase solar, fund projects, and lower people’s bills whether they have a roof of their own or not. We have all these rooftops. We have parking lots, open spaces, municipal structures that can be used for solar.”

Mishra, Bartholomew and West all pointed to things forestalling this vision though and they overlapped in one place: PEPCO. The DC electric grid is over a century old at this point and its cryptkeeper, the Potomac Electric Power Company, is struggling to modernize its physical infrastructure for a distributed energy system in which power is both being consumed and produced. For Solar United Neighbors, this has a financial chilling effect on folks wanting to go solar. Customers are being asked by their energy provider to forego extra money for upgrades on their systems or even asked to downsize their solar systems.

“We’ve had some pushback from PEPCO in terms of getting systems connected to the grid. When we go to interconnect to the grid, PEPCO is fighting it. We need to know the ground rules. How are they justifying this and why is the cost being transferred to the customer? DC has big carbon neutrality goals but if PEPCO keeps pushing back against residential installations, it puts us in a very difficult place in terms of achieving these goals,” says Mishra.

The DOEE program that Thomas Bartholomew’s administers, Solar For All, aims to provide District residents that earn below 80% of area median income with access to free solar benefits, which are valued at around $500 a year. So far they’ve signed up almost 6,200 households. According to him, there is no cost at all except jumping through some administrative hoops. “We try to keep them very moderate but once you sign up, you get free benefits.” These hoops include proving your income is below 80% of area median, either with paystubs or if you already receive District government assistance. Then you just sign an agreement to abide by the terms and conditions and attach your PEPCO account number.

Solar For All’s setbacks with PEPCO though involve not just the physical infrastructure but the digital one. “Our benefits are transferred through PEPCO’s billing system. If you’re a recipient of our assistance, you receive monthly credits for the value of the solar that you’re subscribed to on your bill,” Bartholomew elaborates. Just as the electric grid was not designed to be producing power, PEPCO’s accounting system was not designed to the solar industry’s benefit.

To serve community members going solar, one of the DOEE’s big goals is to shift to a new benefit delivery model. As many multifamily buildings have a single electric meter and build the electric utility cost into the rent, a large number of DC residents who earn below 80% of the Area Median Income, and therefore qualify for Solar for All, do not pay an electric bill. By Bartholomew’s estimation, the lower energy costs could go towards providing better benefits overall for Solar for All customers. “Maybe shift the benefit from credit on PEPCO bills to lower overall community rent or community programs in lower-income neighborhoods. We are looking to pilot that model in the next 5 years.”

The DOEE anticipates a growth of 2,000-3000 households a year in the Solar For All program, a rate spurred by the Inflation Reduction Act and the funding it sets aside. As Bartholomew sees it, “this should mean a lot for clean energy in DC. There’s money in there for green banks, residential installation of solar and high-efficiency appliances, and tax credits for higher efficiency windows, doors, and heat pumps. That should all help reduce energy use and create energy production.”

Ideally, he says, this new legislation will fortify the fact that if you have the ability to install solar, you’re leaving money on the table if you don’t. At the end of the Solar United Neighbors info session, Mishra implored attendees, “If you’re interested in solar, just keep tabs. Spread the word and get informed. If you have questions, that’s what we’re here for, to make your life slightly easier on the solar journey.” It remains to be seen if more administrative hoops and infrastructural roadblocks can be struck down on the path of this solar journey but West summed it up aptly. “Just like democracy, it’s far from perfect. But it’s a good idea.”