The new pilot program will also cover 70 percent of rooftop solar costs for moderate-income participants.
Rob Underwood has already fielded calls from over a dozen Delawareans interested in the state’s new solar equity program. The two-year pilot, which launched this month, aims to bring the benefits of home solar to a wider range of people by dramatically lowering costs for moderate-income residents — and getting rid of costs altogether for low-income families.
“All the way from the governor’s office to the secretary, down to my level, we’re really excited about launching this program,” said Underwood, energy programs administrator in the Delaware Department of Natural Resources and Environmental Control (DNREC). “It allows us to offer residential solar to Delawareans who traditionally were not able to afford the upfront costs.”
That includes people whose credit scores aren’t high enough to obtain a conventional loan to install solar or those who pay too little in taxes to be able to harness one of home solar’s major incentives: the federal solar Investment Tax Credit. The tax credit lowers a new solar owner’s tax bill by 26 percent of the cost of a solar installation, but that carrot doesn’t work if your tax liability is tiny.
And yet those low- and moderate-income households have the most to gain from solar on their roofs. Low-income households in the U.S. have an energy burden — the percentage of their income spent on energy — that’s up to three times higher than high-income households, according to the American Council for an Energy-Efficient Economy.
Delaware’s Low- to Moderate-Income Solar Pilot Program will make solar accessible to 50 households annually via two pathways. For low-income residents, the program provides solar installations of up to 4 kilowatts with no out-of-pocket costs. For moderate-income residents, the program covers 70 percent of the cost of systems of up to 6 kilowatts, leaving homeowners to pay the remaining 30 percent. DNREC selected three private contractors to do the installations.
DNREC is paying for the pilot program primarily out of a green energy fund endowed by a small surcharge levied on customers of Delmarva Power, a utility that serves about half the state. The pilot is also getting some funding from a weatherization program supported by the Regional Greenhouse Gas Initiative, a carbon cap-and-trade program in the Northeast.
To qualify, residents need to meet just a couple of criteria: reside in Delmarva’s service territory and fall under certain income thresholds.
Households qualify as low-income for the new solar program if their income is at or below 200 percent of the federal poverty guidelines. For a family of three, a total income of $46,060 or less qualifies them for free solar. The thresholds for moderate-income families are the median incomes for different counties.
The pilot builds on Delaware’s existing Weatherization Assistance Program for low-income households. Residents approved for free solar will first get their homes weatherized at no cost, said Underwood.
“This is a chance for us to give people homes that reduce their electric bills from the energy-efficiency side as well as the renewable-energy side,” said Underwood.
Delaware’s pilot is the latest among programs bringing solar to low- and moderate-income families in about a dozen states, including Illinois, Massachusetts and, as of last month, Virginia, according to Warren Leon, executive director of the Clean Energy States Alliance.
While some states have given away free solar installations like Delaware is doing, others have sought to impact a greater number of households by subsidizing solar panels or partnering with the private sector, according to Vero Bourg-Meyer, project director with the Clean Energy States Alliance. For example, Connecticut’s recently concluded Solar for All program, launched by the state’s green bank, provided financial and marketing support to company PosiGen to install solar and energy-efficiency measures in low- and moderate-income households with costs bundled in a lease. Those families then saved on average $1,315 annually on their electric bills.
“Those households aren’t saving as much as [they would] if they get a completely free system” like in the Delaware program, Leon said. “But they’re still getting financial benefits.”
Leon called Delaware’s new pilot “a good, logical first step.” He added, “What they’re doing is admirable. They’re taking concrete action and will be delivering real benefits to people.”
At the end of the pilot, DNREC plans to bring in a third party to evaluate the program’s success in areas such as outreach, customer satisfaction and savings provided to participants. Underwood said officials in neighboring states are eager to hear how well the pilot program goes. “We really think this is going to be a model that could be emulated into other states,” he said.
Underwood recalls that during the pilot’s development, some had urged him and his colleagues to start with a “big statewide program and put everything we had into it,” he said. But he believes that the lessons learned from the pilot will allow them to improve and hone the program before expanding it to all Delawareans.
“After the two years, then we can turn the faucet fully on,” said Underwood.