Why Should Only the Wealthy Get Solar Panels?

Washington, D.C., has embarked on an aggressive clean-energy plan, but a big challenge will be making sure it doesn't worsen existing inequalities.

Lucy Nicholson / Reuters

WASHINGTON, D.C.—For homeowners and renters, drawing energy from solar panels on their roofs can be very cost-effective: Some estimates put monthly electric-bill savings between 10 and 30 percent, and on top of that, households that install solar systems can get 30 percent of the cost as a tax credit. But for many, installing solar panels is simply not within reach: Setting up such systems can cost tens of thousands of dollars, which means that their use—and subsequent savings—are predominantly enjoyed by wealthy households.

That's why, as Washington, D.C., moves forward with its clean-energy plan—which would have at least half the city's power coming from renewable sources by 2032—it is doing so with an eye on inequality. The city has mandated that a portion of the money set aside for solar initiatives—just under one-third—target low-income neighborhoods.

In 2015, the top 10 percent of earners in Washington D.C. made six times more than did the lowest 10 percent. That meant that D.C. ranked higher than any state in income inequality, according to information parsed by the District’s Office of the Chief Financial Officer.

D.C.’s inequality is not unlike that of most growing major cities, and the divide between its affluent and its poor runs, troublingly, along racial and geographic lines. Wealthier wards, like Ward 3, can have populations that are over 80 percent white, while poorer ones, like Wards 7 and 8, have populations that are over 90 percent black. That socioeconomic segregation takes on added meaning considering the history of D.C.: After years of living in a predominately minority city, longtime residents are quickly being pushed out by whiter and more affluent newcomers as housing prices rise. Maintaining affordability has proven a staggeringly difficult task.

While the city’s highest-profile efforts have focused on the availability of housing, it is now devoting some attention to helping poorer households save money on their energy bills. Utility bills for low earners can eat up as much as 10 percent of household income, according to a report from Groundswell, a nonprofit focused on energy issues. For the highest 20 percent of earners, utilities make up less than 2 percent of expenditures. But it’s not just a matter of percentages: Poorer families actually tend to have higher utilities bills, usually because their homes are less energy-efficient. On average, a monthly utility bill cost an American household around $115 in 2013, by Groundswell’s calculations, but poorer families were significantly more likely to have bills that topped $200 every month.

So, in a city where the gulf between the rich and poor is vast, those who could most use the energy savings have had little access to it. “In the wealthy wards you had hundreds and hundreds of solar installations,” said Ted Trabue, the managing director of the D.C. Sustainable Energy Utility (DCSEU), the independent organization enlisted by the District to handle some of its efforts to improve efficiency. “We looked at Wards 7 and 8 and you had less than a dozen systems at the time. We thought, ‘Here’s the most fertile area for our installations.’”

In July, D.C.’s city council approved a bill specifying that the city’s renewable portfolio standard would require 5 percent of the city’s energy to come from solar by 2032. The District’s plan to bring solar into lower-income neighborhoods is aggressive but not unachievable, Trabue said. Part of the concern, at the outset of the project, was that residents in low-income neighborhoods simply wouldn’t know about solar panels, let alone accept the offer to install them. “When you go to someone’s house and say you’re offering something for free, there’s natural skepticism,” Trabue said. “We thought if we got 20 people to accept these solar systems in the first year we’d declare success.” They wound up installing close to 90.

Despite budgetary restrictions—and Trabue says he isn’t interested in spending any of DCSEU’s allotment on marketing—word has spread about the program, through homeowners and contractors. “I was told that I would save between 30 and 40 percent, which is major,” said Edwin Amaker, a D.C. homeowner who has participated in the program, in DCSEU’s annual report. “The less money out of my pocket, the more money I have for the family.” The single-family solar-panel program is probably the most well-known of DCSEU’s initiatives in low-income communities.

But focusing on how to ensure that renters in multi-family units can access solar savings can have an even more significant impact, Trabue says. That’s because many of D.C.’s low-income residents don’t live in single-family homes, and most are renters. But wrangling the necessary space, permits, and access required to install solar panels on apartment buildings can be tricky.

A solar array on one of the National Housing Trust’s D.C. properties. (via DCSEU)

To ensure that renters can also access the savings solar brings, the District is seeking out partnerships with the owners of apartment buildings, such as the current agreement with the National Housing Trust (NHT). NHT, a nonprofit, owns and operates about eight multi-family properties in the district, with hopes of adding about three or four more over the next year, according to Jared Lang, the organization’s sustainable-development manager. The properties all contain affordable-housing units, which made the organization anxious to find new ways to keep their costs low.

“Affordable housing is unique. If the expenses go up—if you make certain investments—you can't raise the rent,” Lang said. “You have to become more efficient.” Lang estimates that the savings from their most recent solar installation, on a 223-unit building called Channel Square, will amount to $20,000 each year. The plan, Lang said, is to take that money and channel it into resident services such as after-school programs for kids who live in the building.

While Tommy Wells, the head of the District’s Department of Energy, says the city is far from done working on solar installations on residential properties, it is piloting another program aimed at small-business owners in Wards 7 and 8. The city, he says, is putting around $500,000 into a program that will add solar capabilities to about 15 businesses located east of the Anacostia River, which divides most of Wards 7 and 8 from the rest of the city. The goal, he says, is “hopefully driving down their power bills but also showing us what's the barrier for small businesses to participate.”

D.C.’s program is about more than just energy-bill savings, though. The District hires local contractors for its projects and trains residents in how to install solar panels, with the intention that they can find work in a growing field. That means—the city hopes—creating a form of self-sustaining economic revitalization that can be used well beyond a single project.

But D.C.’s energy program isn’t without its challenges. Many developers who are focused on market-rate properties aren’t interested in installing panels, Lang said, because they do not consider them cost-effective. And even willing partners face limitations: Lang says that because the NHT’s properties tend to be small, their roof space is often tiny, which limits the options for solar installations. And D.C.’s dense tree cover, while great for shade and scenery, isn’t especially helpful when it comes to optimizing solar-panel exposure.

On top of that,  lots of the housing stock owned or occupied by lower-income residents—particularly in Wards 7 and 8—is relatively old, built around 60 years or so ago, Trabue estimates. That means that their roofs are usually flat, fragile, and in need of repair—in other words, not suitable for the installation of heavy, expensive solar panels. And inside these older homes, the circuits often weren’t designed to be hooked up to a solar-energy system.

Now, the District is loosening up the limits on its funding in order to allow DCSEU to put money toward clearing trees, repairing roofs, and updating electrical boxes, which will provide opportunities for solar panels on buildings that DCSEU has thus far had to skip over.

But perhaps the biggest shift in the coming year or so will depend upon how the District’s community-solar plans are finally implemented. The program will set up a system meant to allow residents who don’t have the option of installing or utilizing solar panels on their homes to buy into solar panels that would be placed elsewhere, such as on government property or office buildings. Those who buy in would receive a credit toward their energy bills for the amount of solar power produced by their shares.

But programs utilizing the community-solar model are just getting off the ground, and some say that the provisions for energy-sharing favor those who can access their own solar panels over those who are buying in. An early complaint from D.C. Solar United Neighborhoods, an advocacy group, alleged that some iterations of the plan turned those using credits into “a second class of solar citizens.” And some don’t believe that the rules for community solar—which were finalized this summer—are firm enough. “The ink isn’t quite dry yet. Until it is and the funding parameters are clear, we’re still in the discussion phase,” Trabue said.

According to its own timeline, the city still has 16 years to figure out how to derive at least half of its energy from renewable sources. But perhaps an even bigger challenge will be ensuring that the distribution of pricey environmental technology doesn’t further divide an already economically stratified city.