Pioneering project helps renters cash in on solar savings

This story was originally published by Energy News Network.

A Minnesota solar co-op and affordable housing group are working together to pilot a new approach to helping renters benefit from solar.

Cooperative Energy Futures recently completed rooftop solar installations on five Minneapolis apartment buildings owned by Beacon Interfaith Housing Collaborative, a nonprofit that provides deeply affordable housing and social services to residents who have experienced homelessness or who are living in poverty.

Through a somewhat complicated arrangement that involves net metering, third-party ownership and an exchange of renewable energy credits and other incentives, the organizations have devised a way to finance projects that immediately slash renters’ utility bills by about a third — far more than a typical community-solar subscription.

It’s all possible thanks to a two-year-old change to Xcel Energy’s Solar Rewards program that opened the incentives to non-homeowners. Beacon and Cooperative Energy Futures believe their projects are the first to take advantage of that change.

“By combining low-barrier, cooperative ownership of their own rooftop energy source with ongoing and growing cost savings over time, our residents have access to the broad benefits of clean energy and look forward to a brighter future,” said Kevin Walker, Beacon’s vice president of housing.

Beacon and Cooperative Energy Futures also took advantage of a green cost-share program in Minneapolis that targets low-income neighborhoods. Isaac Evans, the sustainability program coordinator for the city’s Green Cost Share Program, said he had not seen any other solar developer use the same approach of tying solar energy installations directly to individual apartments.

Timothy DenHerder-Thomas, program manager for Cooperative Energy Futures, was among a group of housing and clean-energy advocates who worked with the utility and state Department of Commerce in 2021 to open the program to renters. Previously, participants had to own their residences.

The solar developer had already worked with Beacon on multiple projects, including a community solar array serving one of its downtown Minneapolis apartment buildings and rooftop arrays at three other locations that helped power common areas but not individual apartments.

After the Solar Rewards change, DenHerder-Thomas saw the potential for a new approach that would combine various utility and city incentives to directly benefit renters. He pitched the project to Walker, who had worked with Cooperative Energy Futures on other solar projects.

Beacon became the first customer of Cooperative Energy Futures’ affordable solar program.

Despite the contractual complexity, the advantages are stark for residents, who can expect to see their electricity bills drop by about a third as installations have begun to be activated. A typical Cooperative Energy Futures community solar subscription would reduce a resident’s electric bill by about 15% over a 25-year contract, according to its website.

Beacon residents are typically earning 30% or less of the region’s median income — around $35,200 for a family of four — so helping to reduce their energy burden is critical to its mission of helping people get back on their feet.

Here’s how it works:

• The developer and a nonprofit partner knock on doors to explain the opportunity to the building residents. Those who are interested sign a contract transferring various incentives to a third-party investor and agreeing to buy solar power from Cooperative Energy Futures at a rate less than what they currently pay for electricity.
• The developer installs multiple separate rooftop solar arrays, each sized to 120% of a customer’s average use. The arrays are wired directly into individual apartment meters, where they offset power drawn from the utility’s grid. 
• Participants get two monthly bills: one from Cooperative Energy Futures for the cost of power generated by their solar system and a second from Xcel Energy for any remaining electricity balance for the month.

“We have to build the system just like you would on someone’s house,” said Dan Grantier, solar development manager for Cooperative Energy Futures.

The contracts are structured so that if a tenant moves, the system transfers to the next resident. Cooperative Energy Futures administers the billing and payments, but the systems are sold to an investment company, which claims the tax benefits from them for a decade.

Walker said the five projects, along with three more that will be finished soon, are projected to save Beacon and its residents as much as $500,000 over the next 25 years, with about three-quarters of that accruing for residents.

At least a quarter of residents in Beacon’s larger buildings chose to participate, along with nearly all residents in the smaller buildings. In one case, residents who share a single meter receive benefits from the program.

Altogether, 105 households are participating.

Toya López, Cooperative Energy Futures’ outreach and engagement associate, worked with the nonprofit Community Power to try to sell Beacon’s residents on the concept. It wasn’t a quick or easy process, often requiring coordination with caseworkers or interpreters. One challenge was convincing them it wasn’t too good to be true.

“A lot of these communities have been preyed upon by folks who said they had awesome deals,” López said. ​“There’s definitely a lot of trust we have to earn from community members.”

The complicated invoicing system was also a disincentive for some residents who were unsure about receiving two monthly electricity bills. Participants also had to be persuaded to share energy-use data for use in sizing the systems.

Going forward, Xcel Energy has agreed to let Cooperative Energy Futures design systems based on the apartment’s square footage and total building energy consumption, eliminating the need to collect and analyze residents’ power use, which can vary depending on the household size or the presence of medical or other equipment.

Three more Beacon buildings are expected to have installations by the end of the year. The concept has proven successful enough already that Cooperative Energy Futures is partnering with another nonprofit, Project for Pride in Living, on similar projects atop four of its affordable apartment buildings.

The first installed projects on Beacon’s buildings are expected to be activated this month, with customers seeing the difference in their electric bills in March.

“It’s been a really positive experience,” Walker said. ​“It’s been a bit of a long road, but I’m thrilled to see we’re turning on solar at several buildings.”