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Clean energy journalism for a cooler tomorrow

Google’s huge solar buys help fund efficiency fixes for low-income homes

In partnership with Sol Systems, the tech giant is using a slice of its clean-energy investments for repairs and efficiency upgrades in lower-income communities.
By Jeff St. John

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A man in a white protective suit and protective mask drills holes into the wooden siding of a home
Preparing the exterior walls of a home for insulation (Dennis Schroeder/NREL)

This week, Google and clean-energy developer Sol Systems have unveiled a new approach to pairing clean energy with community investment — spend money upfront to make homes more energy-efficient so they can use clean energy more effectively.

That’s the purpose of the seed funding that Google and Sol Systems are providing to North Carolina–based Roanoke Electric Cooperative, South Carolina–based Santee Electric Cooperative and Aiken Electric Cooperative, and the nonprofit Sustainability Institute of South Carolina. Each of these groups will receive a modest pot of funding to help lower-income households finance the costs of basic home repairs and renovations that, once complete, will make them eligible for energy-efficiency assistance programs.

This most recent round of funding is part of a broader investment that Sol Systems and Google have structured to finance the deployment of 225 megawatts of solar and 18 megawatts of battery storage across North Carolina and South Carolina. This utility-scale solar power will supply Google with renewable energy credits in a part of the country where relatively little carbon-free electricity is available— advancing Google’s goal of procuring round-the-clock clean energy for its data centers and nudging down carbon emissions in those states.

Corporations have become the biggest driver of new clean energy projects in the U.S. But as Adaora Ifebigh, Sol Systems’ director of impact, pointed out in a Monday interview, adding clean power to the grid is most helpful when paired with energy-efficiency improvements for the customers using that clean power.

Energy efficiency is the low-hanging fruit that really sets people up for the benefits” of lower-cost solar power, she said. Significant efficiency retrofits can halve energy use and carbon emissions in many homes, especially in older homes that have deferred maintenance needs. Those savings are particularly helpful for lower-income residents who pay a disproportionate amount of their monthly income on energy bills.

The problem, she said, is that many of the people who could benefit most from those savings can’t participate in energy-efficiency assistance programs because their homes have other problems that need to be fixed before efficiency upgrades can be made. Those can include leaky roofs, damaged floors, excessive moisture buildup, mold, faulty electrical wiring and other issues that can render homes ineligible to receive federal weatherization assistance.

About 20 percent of families cannot participate in weatherization due to insufficient home repairs,” Ifebigh said. Solar power is a good thing, but if homes are not safe and efficient, that’s power going down the drain.”

Bryan Cordell, executive director of the Sustainability Institute of South Carolina, agreed that the dearth of funding for these kinds of pre-weatherization” repairs is a barrier to his organization’s efficiency efforts. The North Charleston, South Carolina–based group offers efficiency upgrade grants and services to help low-income households in the coastal Lowcountry region it serves, many of them facing a persistent energy burden problem,” he said.

We’re in a hot, humid environment, we’re running air conditioners constantly during the summer, and we have a lot of older building stock,” with most homes at least four decades old. A lot of these homes have structural problems — leaky roof; floors or walls that need to be repaired; plumbing problems.”

Funding for pre-weatherization home repairs is tight in the Lowcountry region, and only about 100 homes per year can get assistance, compared to the thousands that need it, he said. There were so many homes we were having to walk away from, knowing there were so many things that needed to be fixed.”

Cathy Davison, chief financial officer for Roanoke Electric, described a similar conundrum for the Upgrade to $ave program the electric cooperative operates for its 14,500 members in northeastern North Carolina. This pay-as-you-save” program is structured differently from the Sustainability Institute’s program, in that it funds the cost of efficiency upgrades via monthly charges on electric bills. It also guarantees to provide at least 20 percent savings compared to prior bills and is open to renters and to customers with low credit scores, she said.

Roanoke Electric has carried out 1,200 projects through this program since its 2015 launch, Davison said. But homes with repair needs so severe that they are considered health and safety issues are not eligible, she added. The funding from Google and Sol Systems will allow the co-op’s program to serve an additional 20 members — about a quarter of the total targeted for its pre-weatherization program this year.

Ifebigh, who formerly served as senior manager of research and development engagements for the National Rural Electric Cooperative Association, noted that energy burdens are higher in rural areas served by cooperatives compared to the national average. Cooperatives serve 92 percent of the country’s persistent poverty” counties, defined as counties where poverty rates have been above 20 percent for at least 30 years.

How clean energy investments could spur community (and corporate) benefits 

As member-owned entities, co-ops are also better positioned than outside funders to determine how best to spend money like the investment that Sol Systems and Google are bringing to the table, according to Ifebigh.

Cordell noted that many of the communities that the Sustainability Institute serves are leery of government promises of aid. It only takes a couple of conversations with community-based partners to understand that, in these communities, a lot of things are promised, and few are delivered, historically,” he said.

Andrew Williams, Sol Systems’ vice president of policy and corporate affairs, highlighted the importance of earning community buy-in to make the most of the locally focused impact investments that are becoming a more important part of many corporate clean-energy deals.

We as solar developers do not know what is best for a community we’re developing solar in or will invest in,” he said. Anyone can write grants. But it’s very different when you’re working with a community that can identify their key issues.”

Pairing solar investments with energy efficiency isn’t a new idea. Many rooftop solar developers and lenders bundle the two services, particularly those aimed at serving lower-income customers. Community-solar developers, which make clean energy available to people for whom rooftop solar is not a viable option, are increasingly building community efficiency investments and economic development considerations into how they structure projects.

Similarly, a growing number of clean-energy developers and buyers are making public commitments to integrating community impacts into their investment decisions. 

Developer Enel Green Power, for example, has created what it calls its Premium Offer” that assists clients that sign power-purchase agreements with Enel in structuring community investments as part of their clean power agreements and tracking their impact in terms of United Nations Sustainable Development Goals for use in environmental, social and governance targets.

Clean-energy buyers are developing their own measures, as with the Beyond the Megawatt Initiative” of the Clean Energy Buyers Institute, the nonprofit research arm of the Clean Energy Buyers Association, a group of corporate clean-energy buyers including Amazon, Google, Microsoft and Walmart. The initiative targets community investments to improve energy resiliency, equity and environmental sustainability for corporate clean energy investments like Amazon’s 2.7-gigawatt commitment last year.

The Clean Energy Buyers Institute’s data indicates that community investments provide intrinsic value to the companies making them, from helping to improve consumer perceptions and attract skilled employees, to being linked to stronger corporate financial performance.

Dawn Lippert, CEO of Hawaii-based nonprofit investor Elemental Excelerator, agreed that community investment, when made as part of a broader commitment from companies to engage with and learn from the communities they’re investing in, creates better projects that are more resilient in the face of supply-chain disruption, more likely to attract workers, and more likely to be welcomed by the communities in which they’re located.”

We see a real need to bridge private, government and grassroots entities to drive meaningful change,” she said. Elemental Excelerator has developed what it calls a Square Partnerships” model to guide effective engagements that include community partners in the financing structure from the start.”

This week’s announcement with Google is the second community-impact investment for Sol Systems, which is operating and building more than 1.5 gigawatts of solar projects in the U.S. In 2021 it signed a deal with Microsoft to invest at least $50 million in community organizations as part of an agreement to finance, develop and operate a 500-megawatt portfolio of solar projects for the software giant. Funding recipients to date include nonprofits Grid Alternatives, Groundswell and Appalachian Voices.

These community investments represent a relatively small fraction of the cost of building the solar farms that spurred them. In North and South Carolina, the solar and battery systems are being constructed by Pine Gate Renewables, with Sol Systems representing Google, serving as its tax-equity syndicator and managing and operating the solar and battery assets over the next five and a half years.

Utility installations of clean energy have been outpaced by corporate procurements of clean energy in the U.S. over the past five years, rising from 3.5 gigawatts in 2017 to 19.9 gigawatts in 2022, according to data from BloombergNEF. Meanwhile, U.S. energy-efficiency investment has remained relatively flat over the same period of time, according to data from the American Council for an Energy-Efficient Economy.

Will the massive growth in U.S. corporate clean-energy investment help bolster energy-efficiency investment? For now, it remains an open question. One of Sol Systems’ goals for its community investments on behalf of Google in the Carolinas is to track the data on participation, economic-development impacts, and energy and environmental benefits, Ifebigh said.

Sol Systems will also be analyzing what she called the magnifier effect” of its investments, she said. The idea is that pre-weatherization work may lay the groundwork for residents to not only invest in energy efficiency but also to make the switch from less efficient heating and cooling systems and appliances to cleaner models, such as replacing inefficient fossil gas or electric resistance heating with high-efficiency electric heat pumps.

Providing access to financing for underlying repairs that make efficiency upgrades possible allows you to take care of critical health and safety issues,” she said. Then you move on to the next phase.”

Jeff St. John is director of news and special projects at Canary Media. He covers innovative grid technologies, rooftop solar and batteries, clean hydrogen, EV charging and more.