Shared Renewable Energy for

Low- to Moderate-Income (LMI)

Customers:

Policy Guidelines and Model Provisions

Sara Baldwin Auck

Director, Regulatory Program

www.irecusa.org | @IRECUSA

NASEO & NCSL Solar Energy Bootcamp

Denver, CO | 8.25.16

Independent, non-partisan, 501(c)3 non-profit organization, working nationally to expand and simplify consumer access to reliable, affordable distributed clean energy.

Develop and advance regulatory policy innovations

Generate and promote national model rules, standards, and best practices

Provide clean energy workforce training, education, and credentialing

Develop consumer protection tools

© 2016 IREC

www.irecusa.org | @IRECUSA | Est. 1982

Free report downloads at: www.irecusa.org/publications

Shared Solar(a.k.a. Community Solar)

Shared solar programs enable

multiple customers to share the benefits

from one solar energy system via their

individual utility bills.

© 2016 IREC

IREC Shared Solar Resources

© 2016 IREC

IREC Guiding Principles for

Shared Renewable Energy Programs

COMING FALL 2016: Modified & updated catalog of state-level

policies & programs

ALL AVAILABLE AT WWW.IRECUSA.ORG

Shared Renewable Energy for Low- to

Moderate-Income Consumers:

Policy Guidelines and Model Provisions

© 2016 IREC

• Goal: Provide information and tools for policymakers, regulators, and others to support implementation of shared renewables programs designed to provide tangible benefits to LMI consumers

• Accompanied by 4-page Quick Reference Guide

• Available at www.irecusa.org/publications

Report Development Process

© 2016 IREC

LMI Working Group Convened with National/Regional Experts

Working group meetings, discussions, and feedback on Draft

External reviewers

Incorporation of all reviewer input

Final Release March 2016

Shared Solar & LMI Consumers: State of Play

© 2016 IREC

• Relatively few (but growing) examples of effective shared renewable energy programs targeting LMI customers

• Best practices still emerging

• Existing programs provide valuable lessons and insights

• Programs targeting LMI customers should not come at the expense of, or in lieu of, sustained and expanded efforts to scale shared renewable energy programs for ALL customers

Setting the Policy Framework

© 2016 IREC

What are you trying to

accomplish?

• Clearly define policy/program goals (and metrics for success)

What else is there?

• Leverage existing efforts where possible (avoid reinventing wheels)

Does it work? • Consider the

customer experience

• Approx. 60% of U.S. households earned $68,000 or less per year, roughly qualifying them as low- to moderate-income (LMI) households

• LMI households typically spend a notably higher % of household income on energy costs than higher-income households

Why does it matter?

Image credit: http://consumersunion.org/2016/07/breaking-barriers-helping-low-to-moderate-income-families-go-solar/

LMI Customers: Definitions and

Considerations

© 2016 IREC

• Include both low and moderate income – Low-income = up to 80% Area Median Income (AMI)

(comports with HUD)

– Moderate-income = 80-120% AMI (comports with HUD)

• Incorporate non-income criteria = location-based, environmental, demographic, etc.– Example: California “disadvantaged communities”

– Customer characteristics and location of facilities

– Different terminology may be warranted

• Leverage existing program criteria and/or certification requirements

LMI Facilities: Definitions and Considerations

© 2016 IREC

• Define what constitutes a shared renewable facility

intended to serve LMI customers (“LMI Facility”)

– Customer composition directly affects facility financing

– Higher LMI participation = higher need for financing tools

• IREC Model Provisions for dedicated LMI Facility: At least 60% LMI

participants

– Majority LMI but allows for anchor subscribers / back-up

guarantees

– 100% LMI facilities are possible with adequate financial tools/mechanisms

– Lower LMI percentage may be suitable and appropriate, depending on

circumstances

Ownership/Split Incentive Barriers &

Recommendations

© 2016 IREC

• Allow for on-site or off-site facilities

• Allow for master-metered multitenant bldgs.

• Customer education re: EE, conservation measuresOwnership

• Require demonstration of beneficial impact for subscribers (i.e., tenants)

• Be aware of other external barriers (e.g., utility allowance)

Split Incentives

• Allow LMI subscriptions to be transferred or assigned

• Flexible subscription term lengthHigher Rates of Mobility

© 2016 IREC

Marketing, Education & Outreach Barriers &

Recommendations

• Ensure ME&O materials are linguistically and culturally appropriate

• Coordination with community-based partner or similar organization

Language/culturalbarriers

• Clarity on LMI eligibility and certification

• Leverage other existing, appropriate LMI outlets and programs

Unclear,complicated

eligibility criteria or process

• See above

• Simple, straightforward participate

Lack of internetaccess; time constraints

• Specify appropriate consumer protection requirements for LMI customers

• Balance with maintaining cost-effectiveness

Consumer skepticism

Consumer Protection

© 2016 IREC

IREC Consumer Protection Trio www.irecusa.org/consumer-protection/

Other Resources:

• SEIA Consumer Protection Resources http://www.seia.org/policy/consumer-protection

• CCSA/SEIA Residential Consumer Guide to Community Solar http://www.communitysolaraccess.org/interested-in-community-solar-new-seiaccsa-guide-is-for-you/

LMI Financial Barriers & Recommendations

© 2016 IREC

• Financial barriers

– Lack of access to capital and/or credit, lack of tax appetite, competing critical economic priorities, discounted electricity rates

• Guidelines & Model Provisions:

– Program must specify one or more financing tools/mechanisms

– Balance tools with other program design parameters

– Fair bill credit reflecting full value

– Minimum participation term (no provision)

– REC ownership

LMI Financial Tools

© 2016 IREC

• For What?– Directly offset costs to participate for LMI customers?

• Lower cost of facility • Offer discounted subscriptions

– Provide access to credit?

• For Whom?– Targeted at LMI participants?– Targeted at LMI facilities/participant organizations?

• Source of Funding?– New source of funding?– Reallocation or repurposing of existing funding

streams?

Financing Tools & Mechanisms

© 2016 IREC

FOR LMI Participants

• Direct incentives

• Loan programs and credit enhancements

– Loan loss reserve

– On-bill financing and repayment

– Other credit assistance, e.g., expanded, alternative, and hybrid underwriting criteria

Financing Tools & Mechanisms

© 2016 IREC

FOR LMI Facilities and Participant Organizations

• Anchor subscribers and back-up guarantees

• Direct incentives

• Tax incentives

• Loan programs and credit enhancements– PACE

– Revolving loan funds

• Low-cost public financing

Utility

Purchases solar with

participating customers’

rate assistance program

subsidies via RFO

Sends solar

production

information

Enroll in new

program

Program

Administrator

Third-Party-

Owned Solar in

Disadvantaged

Communities

Conducts program sign-up,

and other marketing,

administration and outreach

Eligible

Participants

Credits

participants’ bills

according to

solar share, as

with NEM (kWh)

New bill with credits

<

Subsidized bill

Pay bill at

standard rate

(not subsidized

rate)

Energy (kWh)

© 2016 IREC

IREC’s

CleanCARE Proposal

Case Studies

© 2016 IREC

• Massachusetts Solar Loan Program (loan loss reserve)

• California Multifamily Solar Programs (direct incentives)

• Grand Valley Power Low-Income Community Solar Program (on-bill financing)

• New York Green Bank

Financing

Mechanisms

• Colorado Community Solar Gardens Program

• New York Community Distributed Generation Program

• California Multifamily Solar Programs (MASH and AB 693 Solar Roofs)

• California Green Tariff Shared Renewables Program

Policies/

Programs

Based on IREC research as of September 2015, updated May 2016.

* Number of yellow stars are representative but not reflective of exact number of programs

National Shared Solar Landscape

DC

+ many voluntary utility programs on the horizon

© 2016 IREC

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Additional Resources

© 2016 IREC

• IREC Resources: Model Rules, LMI Guidelines, and Catalogwww.irecusa.org/regulatory-reform/shared-renewables

• US DOE/White House Community Solar Partnership http://energy.gov/eere/solarpoweringamerica/national-community-solar-partnership

• US DOE Solar Market Pathways www.solarmarketpathways.org

• National Renewable Energy Laboratory www.nrel.gov

• Shared Solar: Current Landscape, Market Potential, and the Impact of Federal Securities Regulation www.nrel.gov/docs/fy15osti/63892.pdf

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Thank you!

Sara Baldwin Auck

Director, Regulatory Program

sarab@irecusa.org

(801) 651-7177

www.irecusa.org

© 2016 IREC