How solar donors can cut the power bills of low-income families

Resonant Energy, a Boston-based solar energy provider, has developed a novel approach for sharing the benefits of solar energy. Working with software developer MySunBuddy, the certified B Corporation has launched a platform that enables customers in Massachusetts who oversize their arrays — that is, who install more solar panels on their roofs than they need to meet their own energy needs — to donate the extra energy savings to low-income families.

“We want to make it possible for people to send their excess energy production — in the form of net-metering credits — to low-income customers,” said Ben Underwood, Resonant’s co-CEO and co-founder. Net metering allows customers with solar to be paid for the energy they send to the grid, with the value credited to customers’ power bills. Sharing those savings with low-income families through the company’s Solar Equity Platform, Underwood said, would ​“help people benefit from the transition to clean energy who might otherwise be left out.”

Owners of the oversized arrays can also get a boost, Underwood explained. Incentives for solar energy systems that benefit low-income communities often help offset and can even exceed the cost of building bigger.

The Solar Massachusetts Renewable Target or SMART program pays solar owners a bonus rate for the energy they sell to the grid if at least 15 percent of the system’s production goes to low-income households. For a system that qualifies, for example, an owner could get compensated at the baseline net-metering rate, $0.238 per kilowatt-hour, and the SMART bonus, $0.068 per kilowatt-hour, for a total of $0.306 per kilowatt-hour, according to Underwood.

In the scenarios Resonant has analyzed, the solar owner almost always breaks even or actually makes a better return on their solar system investment with this approach than they would have otherwise, Underwood said. The outcome depends on the utility jurisdiction and other details, but ​“in most cases, you can get an extra half a percent, or up to 1 percent, on internal rate of return,” he said.

Underwood estimates that if a quarter of residential solar installations were oversized across Massachusetts, the Solar Equity Platform could generate about $1.57 million in bill savings annually, eliminating the electricity costs for the equivalent of more than 1,300 low-income households.

How the platform works

Donating net-metering credits from one utility account to another is more straightforward than it probably seems; it just requires filling out a form, said Underwood. The platform draws the relevant data from the accounts of the donors and recipients, so both groups can easily see how many solar credits they’ve donated or received. That would normally be a challenge to glean directly from their power bills. The platform also matches networks of donors and recipients, making it possible to send credits to low-income customers at a scale that would be impossible through one-off transactions, Underwood said.

A handful of solar donors and recipients are currently test-driving the platform, contributing an estimated annual $23,000 in savings. These include a few residential solar owners, as well as two community nonprofits: The Discovery Center, a children’s museum, and Homeowner’s Rehab Inc. (HRI), an affordable housing provider.

HRI worked with Resonant to plan a sprawling solar installation across 24 sites, which will power the common spaces in their buildings. That array will be 15 percent bigger than HRI needs. Resonant estimates that HRI’s extra panels will generate 55,000 kilowatt-hours, or approximately $13,000 in no-cost credits for low-income households each year.

Installing solar and donating the extra energy savings is a strategy that hits a triple bottom line, said Will Monson, senior project manager at HRI. It provides ​“a [financial] return to us investing in the solar energy,” meets ​“our goal as an organization to transition to green sources of power,” and produces extra savings that ​“can go to offset low-income families’ bills,” he said. ​“So much the better, right?” 

Partnering with community groups to find low-income recipients 

To qualify for low-income solar benefits in Massachusetts, a household needs to either earn 60 percent below the state median income or live in what the state calls an ​“environmental justice neighborhood.” The state uses several criteria, including income and demographic makeup, to define these areas.

Resonant is collaborating with community partners to help verify eligible households, as well as to distribute donations as part of local community development efforts.

For example, Resonant partner Codman Square Neighborhood Development Corporation is creating an energy ambassadors program to train community members on how to take advantage of the state’s Mass Save energy efficiency program, which provides financial assistance for home weatherization, energy-saving electric appliances and more. So far, participation in the energy efficiency program has been uneven. As with residential solar, ​“adoption in moderate- to high-income communities…is way higher than in low-income neighborhoods,” Underwood said.

Codman Square aims to turn the tide — potentially by giving out solar donations. Energy ambassadors who successfully complete the training and participate in the Mass Save program could receive energy savings via Resonant’s platform, which would lower their electric bills for up to 20 years, the life of a solar installation. The donation would be like a gift card that keeps on giving.

Expanding the platform with some federal help 

Resonant aims to grow the platform by hiring dedicated staff for software and business development. A helpful infusion of funds could be around the corner: Resonant’s platform is among 10 software solutions vying for $1.6 million in cash prizes in the U.S. Department of Energy’s American-Made Solar prize competition, now in its fifth round. Winners will be unveiled Sept. 20 at the renewable energy conference RE+. Resonant has already won more than $135,000 in previous rounds.

The company is also assessing how the platform could work in other states. Some, such as New York and California, have their own solar incentives for low-income households and communities. The Inflation Reduction Act also makes available to all states a 20 percent federal tax credit for solar projects (under 5 megawatts) from which half of the output financially benefits low-income households.

Developers could donate half of a solar project’s output without taking a financial hit, said Underwood, because ​“when you stack the state incentives and this new federal incentive, that’s enough to actually make systems still work economically.”

But the federal boost could soon evaporate. While the climate law provides a 30 percent investment tax credit for prevailing-wage solar projects for the next decade, the bonus 20 percent tax credit for low-income solar projects is currently slated to apply only in 2023 and 2024, up to a 1.8-gigawatt cap per year, according to Underwood.

“My hope is that with the Solar Equity Platform, we can really show that we’re taking that 20 percent bonus tax credit and driving substantial value directly to qualifying low-income customers,” Underwood said. ​“That would set us up to make a strong enough policy case…for whoever’s in the White House in two years, that it would be worth extending the bonus tax credits.”