How neighbors are banding together to get cheaper rooftop solar

This article is part of our weeklong series Power by the People: Clean Energy from the Grassroots.

Mohammed Nasrullah had always wanted to put solar on the roof of his Houston, Texas–area home. But it was the opportunity to join a neighborhood solar cooperative that finally made that plan a reality.

“We really care about the environment,” the former NASA employee said. He and his wife are both certified Texas Master Naturalists, volunteering their time to preserve the ecosystem surrounding their home near Galveston Bay.

“Going solar was on our list,” he said. “[But] we didn’t have time to sit down and do our own research” on how to find a reputable solar contractor or how an investment in solar would pay off in a state with no solar net-metering laws.

“Luckily,” back in 2020, ​“a friend of ours who went solar told us there was a local co-op being formed in our area,” he said. The co-op was supported by Solar United Neighbors, a group that has enabled homeowners around the country to switch to solar energy. Nasrullah and his wife joined the co-op, and then the nonprofit, known as SUN to its members, helped them and about 50 other homeowners learn the fundamentals of rooftop solar contracts and pool their purchasing power to get a better price on their panels.

But all final decisions — whether to take the plunge and install solar, which contractor to choose, which retail electricity provider to contract with and the like — were up to the members themselves, Nasrullah said.

“There’s no membership fee or anything. There’s no real commitment to buy solar,” he added. Co-op members selected from among themselves a four-person team that worked with SUN to devise a request for proposals to give to contractors. Throughout the process, ​“these folks from SUN were there to answer questions. […] They were so helpful along the way, through installation and operation.”

“It has been almost 18 months now that we’ve had our system, and I still pick up the phone and talk to folks at SUN,” Nasrullah said. The topics of those conversations range from the latest opportunities for solar-equipped homeowners to switch retail providers and earn more money from their solar power, to checking in on the next co-op opportunities arising in the Houston area.

“They have a list of what co-ops are open right now for people to sign up,” including four that are being supported by the city of Houston, he said. ​“But if there’s no co-op in an area, they also have a link on guidelines for somebody to [go solar] on their own.”

From solar-buyers clubs to distributed-energy advocates

Solar United Neighbors got started 15 years ago, when two Washington, D.C. middle-schoolers convinced first their own parents and ultimately about 50 of their neighbors to get solar panels. Anya Schoolman, the mother of one of the students, went on to found SUN. Since then, it has expanded to more than 30,000 members, including 6,377 who’ve installed a combined 53 megawatts of rooftop solar on their homes.

SUN-backed co-ops have launched in numerous states including Arizona, Colorado, Florida, Maryland, Minnesota, Ohio, Pennsylvania, Virginia, West Virginia and most recently Puerto Rico. As part of that expansion, Solar United Neighbors has signed up more than 100,000 people for its ​“solar supporter” activist list, making it a formidable force for pro-solar policy advocacy.

In a lobbying environment rich with trade groups representing the solar industry and corporate energy buyers, ​“we’re the only organization nationwide and in Puerto Rico that represents solar owners” at the residential scale, said Aaron Sutch, SUN’s Atlantic Southeast region director.

In that sense, said Glen Brand, SUN’s vice president of policy and advocacy, ​“Solar United Neighbors is more in the framework of an energy democracy organization.” The group’s work to educate and assist neighbors that want to go solar has led to broader efforts to ​“mobilize solar owners to advocate, in the most pragmatic terms, to protect their investments — but also make it easier for more people to go solar, and to build new utility models so that people can benefit more from solar ownership.”

Advocating for members can mean lobbying state legislatures and utility regulators to protect and expand pro-rooftop-solar policies, such as SUN’s work on retaining net-metering policy in Florida. It also includes more market-based efforts like SUN’s Fair Credit for Texas Solar campaign, which is enlisting SUN co-op members to offer their business to Texas retail energy providers willing to offer more lucrative contracts for solar power fed back to the grid. At the national level, SUN partnered with other advocacy groups to lobby for the inclusion of a host of policies that support low-income solar adoption in the Inflation Reduction Act passed by Congress in August, Brand said.

SUN is also working to bring solar directly to more lower-income and disadvantaged community members, whom the nonprofit acknowledges have generally been underserved by its programs. SUN hopes that partnerships with credit unions, city governments, nonprofit organizations and crowdfunding campaigns will help expand its membership pool to include these groups.

Bringing down costs for solar customers and installers alike 

The cooperative model underlying all these efforts is based on a relatively simple economic premise: When buyers unite, they increase their market power, both to demand lower prices and to assure fair treatment.

“We get a group of people together in a relatively similar geographic area, and that helps drive down the cost and the hassle of getting panels on your roof,” said Hanna Mitchell, SUN Texas program director. Bundling between 50 and 150 customers into a single bid helps entice solar installers to compete for that business, and as a result, ​“our solar co-ops can typically see a 10 to 30 percent reduction in cost over the going individual market rate.”

One reason this cooperative model works is that it extends benefits to the solar installers as well as the customers, Sutch said. More than half of the total costs of a typical residential solar installation come not from the cost of solar panels, inverters and other hardware, but rather the ​“soft costs” such as acquiring customers, obtaining permits and paying workers, he said. Cooperative buying reduces those soft costs — most notably by bringing business to installers, rather than forcing them to hire door-to-door salespeople, take out advertisements or buy sales-lead lists.

Concentrating work in a geographical area can also reduce the time and cost involved with inspecting homes, obtaining permits and scheduling workers to complete installations, Sutch said. ​“We’re giving them a base of customers, and geography makes that more efficient.”

Thomas Dallefeld is sales director with Houston-based regional solar installation company Sunshine Renewable Solutions, which has won two contracts with SUN co-ops. He calls SUN’s co-op model ​“a win-win for everybody.”

“The customer gets a better deal. It makes sense for us to make less margin per job if we’re going to get all of them at once,” he said. ​“And they cover [customer] lead acquisition costs, which are significant.”

SUN isn’t the only entity taking advantage of the benefits of bundling solar purchasing. Around the time that SUN’s first Washington, D.C. group was founded, the city of Portland, Oregon was launching the first ​“Solarize” campaign — a term to describe the practice of cooperative solar purchasing.

Local-government-backed Solarize campaigns have since launched in cities including Houston, Minneapolis, Orlando and North Carolina’s Raleigh–Durham–Chapel Hill metro area. In New York, a statewide program has promoted 93 Solarize campaigns leading to nearly 20 megawatts of solar installations.

Solarize campaigns work similarly to SUN’s cooperative model, Mitchell said, with one important distinction: ​“With our co-ops, the members select the installer, and with a traditional Solarize effort, either the municipality or the operational partner for the group selects the installer.”

Solar United Neighbors is backing many of these city efforts, but so are for-profit companies like Georgia-based Solar CrowdSource or iChoosr, a Dutch company that organizes ​“collective-switching schemes” for customers in competitive energy markets in five countries.

Cooperative solar-purchasing campaigns are valuable to solar companies because they can prime customers for increased adoption. Research from the National Renewable Energy Laboratory shows that co-op campaigns that open and close within a set period of months create a ​“limited-time offer” dynamic that creates urgency among residents to participate.

There’s also the value of word-of-mouth marketing, which is far more effective than corporate advertising in getting people to go solar, according to a growing body of research. Solar adoption also rises through what research has identified as the ​“solar contagion” effect — seeing panels sprout up on neighbors’ houses can increase local adoption rates by significant margins.

Consumer protection, consumer education 

Beyond bringing down solar costs and spurring greater adoption rates, a well-designed cooperative solar program must also provide consumer protections, Mitchell said. ​“We help people through every step in the process,” she said, from understanding how the laws and regulations in their region affect the economics of rooftop solar to how to comb through competing installer proposals.

Dallefeld agreed that ​“having another intermediary side by side with installers” helps give customers more confidence in the deals they’re making. ​“It’s the Wild West with solar — people are knocking on doors, selling,” he said, referring to the door-to-door sales tactics that drive a significant share of the U.S. residential solar business.

“[If] you sign up with someone who’s knocking on your door, it’s a crapshoot,” he said. ​“If they don’t do due diligence, the customer can lose out. If there were co-ops popping up everywhere and setting standards, you’d have a lot less of the dark-horse solar industry.”

That’s particularly true in Puerto Rico, Sutch said, where, in the years since Hurricane Maria devastated the island’s power grid, the solar market has grown rapidly, with 2,000 to 3,000 installations every month. ​“But there are a lot of people who don’t know where to start” when it comes to assessing the deals they’re being offered, and ​“a lot of customer-unfriendly solar tactics in Puerto Rico and in the market generally,” including ​“high pricing, leasing that’s not customer-friendly.”

Without an independent third party like SUN, ​“you’re kind of on your own to deal with the private solar market, which is quite aggressive in many cases,” said Cathy Kunkel, energy program manager at Cambio PR, a Puerto Rico–based environmental group working with SUN on the island. ​“Companies are trying to sell systems that are oversized, more than what people need, and there isn’t necessarily a good third-party source of information to go to.”

David Ortiz, a longtime community organizer and activist in Puerto Rico, worked with SUN to launch its first co-op on the island in 2020 and is now helping to establish a second one. He said he has witnessed customer confusion firsthand. In a recent informational meeting for the second co-op, there was a woman who had been a part of the 2020 group but at the last minute decided not to buy solar panels. Ortiz said she told him, “‘I’ve been getting flyers from every solar company you can imagine since 2020, and I’ve waited two years because I wasn’t going to go with anyone until there was another info session.’”

Along with consumer protection, co-op participants have the benefit of receiving advice that’s hyper-local, Ortiz noted. Puerto Rico’s highly unreliable power grid is driving many would-be solar owners to add batteries to their homes, which is more expensive than solar alone. In another co-op meeting, ​“someone shared with the rest of the group that, where they live, there are huge flooding issues,” he said. The fix was to ​“put the battery on the second floor, so if there’s flooding, his system will continue to work. That’s something people learned from being part of the co-op.”

In this sense, co-op members are like ​“solar ambassadors” to the broader community, Sutch said. ​“Someone who has been through the process knows how interconnection works, knows what it’s like to look at a proposal. We mobilize and amplify their voices in the community.”

Building more equity into the cooperative solar model

Getting solar to customers regardless of income will take more than the cost reductions made possible by cooperative purchasing. Of the more than 6,000 families that have installed solar through SUN-sponsored co-ops, only 117 are in the low- to moderate-income category, according to the group’s 2021 annual report.

Mitchell cited the lack of access to capital and credit as the key barrier for lower-income customers seeking to participate in SUN’s residential solar model. While groups negotiate prices and terms, and SUN works with a set of credit unions that offer loans on a nationwide basis, individual families need to be able to qualify for the loans, she said.

SUN partnered with nonprofit decarbonization think tank RMI to study the demographic and economic factors that have held back greater solar uptake in lower-income and disadvantaged communities. In 2020, RMI published a summary of its research, which found that cooperative models could boost solar adoption in communities that have largely been barred from it in the past, and highlighted how partnerships with governments, financial institutions and nonprofit entities can help. (Canary Media is an independent affiliate of RMI.)

RMI has worked with 20 city governments to launch Solarize campaigns, including Boston, Columbus, Louisville, Kansas City and others, said Ryan Shea, a manager with RMI’s Urban Transformation team and co-author of the 2020 article on the group’s findings. One of the key factors for successful programs has been ​“having really strong community partnerships,” he said.

“Bringing frontline-community-based organizations in at the start is important,” he said. This ensures that equity is factored into the program development from the very beginning. ​“Those trusted organizations can spread the word about the campaign’s benefits.”

But upfront costs are still prohibitive, he said. ​“For moderate-income residents, low-interest, accessible financing is what’s needed to spread out that upfront cost,” he said. ​“But for low-income residents, campaigns need to secure funding to pay that cost outright.”

RMI’s article cited the example of the Solar for All Campaign. The partnership between the Connecticut Green Bank and PosiGen, a solar installer that specializes in serving homeowners with limited means and credit access, brought solar to more than 900 low-income households in the state between 2015 and 2021 through a combination of higher incentives and targeted outreach.

Green banks — entities that use public funds to make low-cost, long-term loans to underserved markets — are playing similar roles in other states. In Orlando, Florida, SUN has partnered with the Solar Energy Loan Fund, the state’s version of a green bank, to extend affordable solar installations to hundreds of lower-income residents. The Inflation Reduction Act will bring $27 billion in federal funding to expand the scope of green-bank lending across the country, making these entities a potential source of significant growth for cooperative solar purchasing models.

SUN’s 2021 annual report features a Q&A with Yesenia Rivera, the group’s former director of equity and inclusion, in which she lists several other approaches to serving lower-income and disadvantaged communities. In Colorado, the success of a solar rebate program in the community of Mountain Village drew follow-on funding from city and county sources, she said. SUN has partnered with Habitat for Humanity in Texas and Virginia, and with community development nonprofits in Pittsburgh and other cities to bring solar to low-income homeowners.

Rivera cited financing as the biggest barrier to low-income solar adoption. ​“Who pays for these systems? We know it’s going to have to be a combination of philanthropy, tax credits and loans.”

Beyond that, SUN’s model of banding homeowners together to access rooftop solar also leaves out renters, she noted. Community solar programs, which allow people to subscribe to solar power generated at sites that aren’t on their properties, are one way to expand access to those who can’t install it on their own rooftops, she said. Rivera is now executive director of the Solstice Initiative, a nonprofit that assists communities seeking to develop such shared solar projects.

Kunkel pointed out that in Puerto Rico, rooftop solar, community solar and community microgrid projects are all potential solutions to solving the energy-cost and reliability woes that the island’s residents face. ​“Relatively wealthy people who want to go solar are doing it, and everyone else is left with this expensive and unstable power grid,” she said.

As more people gain access to solar, they’ve joined in political activism to keep it affordable. SUN members were among the coalition that helped defeat a proposal by Puerto Rico’s centralized utility to add surcharges to customer solar systems, Kunkel noted.

While a number of U.S. states are facing debates over whether rooftop-solar incentives discriminate against lower-income utility customers, ​“those debates don’t really exist in Puerto Rico,” she said. ​“Everyone recognizes the value of rooftop solar and is frustrated with the electrical system as it is. The key is to make it accessible to lower-income families.”

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