By Ben Sigrin and Meghan Mooney, National Renewable Energy Laboratory, and James Tong, Advanced Grid Consulting

A new report released by the National Renewable Energy Laboratory (NREL) shows that nearly half of all the United States’ residential rooftop solar technical potential is on the dwellings of low-to-moderate income (LMI) households, representing 320 GW of potential solar capacity.

Although residential solar adoption has increased over the past decade, adoption among LMI households (defined as 80% or less of the area median income) and affordable housing providers continues to lag, prompting concerns of a green divide. Recent policy efforts across the country have taken aim at this sector, trying to reduce barriers, but progress has been slow.

Now, for the first time, data is available to help policymakers and industry stakeholders understand the true size of the market potential and where to best direct their resources. The report, which includes an interactive map, is part of a three-year research project led by NREL and supported by GRID Alternatives, the University of Chicago, the University of Michigan, Lawrence Berkeley National Laboratory and Advanced Grid Consulting. Using sophisticated mapping and modeling tools, and incorporating large data sets from diverse sources, the researchers will assess factors that influence LMI solar adoption at the individual and community level. The project was funded by the Department of Energy’s Solar Energy Evolution and Diffusion Studies (SEEDS) program.

The first phase of the study established the physical and technical potential of rooftop solar for LMI households—that is, how much solar could even be located on rooftops to serve LMI communities – by analyzing the potential for electricity generation and electricity offset by income groups, building type (single- or multi-family) and tenure type (owner- or renter-occupied) across the nation. Below are some of the key findings of the first year of the study, and implications of those findings for project developers, regulators, and policy makers.

Finding No. 1: Rooftop solar potential is substantial in most states.

To find where the rooftop potential is, you have to go to where the buildings are. At a high level, high-population states like Florida, Illinois, Ohio, Pennsylvania and Texas (among others) have significant technical potential (Figure 1).

Implication: There’s opportunity for growth in all states, even those without substantial rooftop deployment today or that are outside the Sunbelt.

Finding No. 2: LMI households represent a significant portion of residential solar potential.

Single-family, owner-occupied rooftops collectively represent the biggest opportunities (in terms of technical potential and electricity offset). Unsurprisingly, these rooftops have greater concentration among higher-income households. But there’s a lot of untapped potential in LMI households.

Annual residential solar potential is ~ 1,000 terawatt hours (TWh). The LMI opportunity is 415.9 TWh, nearly half (42%) of total annual residential solar potential.

In many counties, particularly those in the Southeast (e.g., Alabama, Mississippi, Arkansas and Louisiana), the majority of rooftop solar potential lies within LMI communities (Figure 2).

Implication: LMI households represent a big market opportunity for the solar industry. Ignoring LMI communities would significantly limit rooftop solar potential in the United States.

Finding No. 3: Most LMI residential potential (60%) does not conform to conventional rooftop solar models (i.e., single-family owner-occupied).

In LMI households, more solar potential exists on renter-occupied and multi-family buildings than single-family owner-occupied buildings.

Using only single-family owner-occupied roof space, 60% of U.S. counties would have sufficient potential to offset one third of LMI electricity consumption; however, using all residential building roof space, 99% of counties would have sufficient potential to offset at least a third of LMI electricity consumption.

Community or public buildings can significantly add to rooftop solar potential of LMI neighborhoods if PV systems are oversized to serve nearby LMI homes. Of the building types examined, schools unequivocally had the most rooftop solar potential.

Implication: This suggests that improving LMI solar access will require non-traditional rooftop (shared) solar models, such as community solar or virtual net metering. This can enable those that could best host rooftop solar to serve those with poor solar access. Because there are a lot of solar resources in higher-income communities, one model could involve sharing their output by virtual net metering or even the possibility of donating it to LMI households.

Finding No. 4: Including all roof space types (single-family owner-occupied, single-family renter-occupied, multi-family owner-occupied, and multi-family renter-occupied), solar generation can technically meet most electrical consumption for all income groups.

It’s not a technical potential issue; it’s a model issue. Very low income electricity consumption could be offset by 85%; low income consumption could be offset by 91%; moderate income consumption could be offset by 80%; and non-LMI consumption could be offset by 70%.

Implication: This is a corollary to the previous finding: there is abundant rooftop solar potential to offset most LMI electricity consumption. Moreover, as the cost of solar energy continues to decline, solar can help increase energy affordability, or serve as an alternative or supplemental use of public funds for energy assistance programs. For instance, use of funds to directly or indirectly incentivize solar deployment may be more cost-efficient than rate subsidization since it creates a durable asset for low-income households and, long-term, could lead to greater program effectiveness. To be certain, the exact cost-benefit of diverting rate assistance funds depends on program details and was beyond the scope of this study.

Unlocking the market

While there is tremendous rooftop solar potential among LMI communities across the U.S., harnessing this potential will require market and policy innovations. More shared solar can be promising but will likely not be enough. Other barriers exist, including credit requirements and limited access to financing, difficulties in targeting and educating LMI households, and socio-cultural perceptions of solar and solar providers.

Subsequent phases of our SEEDS project will investigate many of these issues and how they may be overcome. Phase 2 will focus on using predictive models to assess the factors that influence LMI solar adoption, such as education, availability of financing, etc. Phase 3 will involve piloting referral programs in specific markets.

The full study “Rooftop Solar Technical Potential for Low-to-Moderate Income Households in the United States” can be found at https//www.nrel.gov/docs/fy18o sti/70901.pdf. The report data can be downloaded here or accessed via the interactive web application.

News item from NREL