Getting Real About Bringing Solar Programs, Benefits to Lower-Income New Jerseyans

Tom Johnson | June 16, 2020 | Energy & Environment
Solar systems have sprouted across the state, but rarely in poorer communities; the Board of Public Utilities and state lawmakers are trying to change that
Credit: Kimco Realty (CC BY-ND 2.0)
The BPU does not currently maintain a breakdown of how much clean-energy funds are spent in low- and moderate-income communities.

For much of the last decade, it seemed new solar systems popped up nearly everywhere you turned — on rooftops on homes in well-heeled suburbs, on the grounds of corporate campuses, and next to New Jersey’s schools and colleges.

As of the beginning of May, there were 127,834 solar arrays installed in New Jersey.

But not many of them are in the state’s poorest communities, where energy bills account for a much larger bite of a household or renter’s income in percentage terms, even though those clean-energy projects are funded by a surcharge on monthly electric bills.

At a time when the state is gearing up to spend billions in ratepayers’ dollars to invest in new solar, offshore wind, and energy-saving projects, community activists, environmental groups and policymakers are now pressing to ensure those living in low-income communities share and benefit, too, from that spending.

This past week, New Jersey Board of Utilities president Joseph Fiordaliso pledged to create a new Office of Clean Energy Equity within the agency, a proposal already advanced in a bill (S-2484) introduced last month by Sen. Troy Singleton (D-Burlington). It aims to ensure those populations win a bigger share of the pie.

“Historically, the state hasn’t been very good at delivering those benefits to low-income customers,’’ said Ana Baptista, chair of the Environmental Policy and Sustainability Management program at the New School in New York City. Traditionally, much of the spending on clean energy has gone to the industrial sector and to those in higher-income segments, according to Baptista.

It is hard to track where utility spending on such things as energy efficiency is targeted because companies use different definitions of low-income customers. But a study by the Consortium of Energy Efficiency, an industry trade group, found ratepayer-funded and non-ratepayer spending amounted to $6.7 billion nationwide in 2015 on electric energy efficiency programs.

Low-income programs nationwide: 6% of spending

The study found the residential sector accounted for 28% of the spending followed by the commercial and industrial sector with 23%. Low-income programs represented only 6% of spending, the lowest of any sector.

“Most of the clean energy deployment has not happened in low-income communities,’’ agreed Hilary Lewis, of Vote Solar, a Washington D.C.-based group trying to bring solar energy into the mainstream.

To some extent, the state is trying to bring solar to disadvantaged communities. Last year, it approved 45 community solar projects across New Jersey, all of which are expected to serve low-income residents. A community solar project is a system whose output is divided among several participants, such as residents living in multiple dwelling units or whose single-family houses are not suitable for solar installations. The projects will be built on parking lot canopies, brownfields, landfills and rooftops.

Fiordaliso did not offer much detail on how the office would work, unlike Singleton’s bill, which has attracted wide support, including from environmental justice advocates and community activists.

What is especially appealing to those groups is the bill sets specific targets for reaching low-income populations with clean-energy programs. For a wide variety of reasons, those residents have not participated in programs that could lower their energy bills, including energy efficient projects.

“Many environmental advocates think it’s a critical part of the bill,’’ said Baptista, referring to the spending targets.

The state BPU does not currently maintain a breakdown of how much clean energy funds are spent in low- and moderate-income communities, according to Peter Peretzman, a spokesman for the agency. “We are evaluating various programs funded through clean energy and are working towards compiling such a breakdown,’’ he said.

Landlords may not be that motivated

For example, low- and moderate-income residents often live in aging housing whose deteriorating structures make energy efficient projects not suitable. Or, they live in structures where landlords must be the ones who apply for assistance but may not be motivated to do so since they are not paying the bills.

As a result, low-income households generally pay a much larger share of their household  incomes on their energy bills or 7.2 % — more than triple the 2.3 % that those with higher incomes  pay — according to the American Council for an Energy Efficient Economy (ACEEE). If lower-income housing could be made as energy efficient as the average American home, the low-income energy burden could be eased as much as 35%, according to the council.

Under Singleton’s bill, various targets would be established for increasing penetration of clean-energy projects and programs in underserved communities. Eighteen other states have established such spending goals for those communities, according to Lauren Ross, local policy program director for ACEEE.

“Many environmental advocates think it is a critical part of the bill,’’ Baptista argued. “Without a target, it is hard to achieve these goals.’’

The targets are aggressive, such as requiring 250,000 or 35% of low-income homes, whichever is greater, have access to solar by 2030. “That’s the type of scale we need to address a segment that has been underserved,’’ Ross said.

The legislation, not yet taken up in committee, also would allocate at least $50 million a year or 10% of the state’s clean-energy fund to low-income communities and ensure than 2,500 residents of disadvantage communities receive training in solar installations by 2025.

The clean-energy fund, however, has repeatedly been diverted for other uses by the past three governors, most recently last month by the Murphy administration, which diverted $80 million in unspent balances out of the fund to help plug a potential $10 billion hole in the state budget created by the coronavirus pandemic.

Singleton, who did not return a call, said in a statement earlier, “Our proposal establishing the Office of Clean Energy Equity will ensure that clean energy reaches every corner of our state, especially those communities that have been traditionally underserved.’’

“It is really addressing both the pandemic and ensuring disadvantaged communities are benefitting from clean energy,’’ Lewis said. “I think the clean energy jobs will be a big part of our economic recovery.’’