February 26, 2024 — Report

The ongoing transition to a clean economy requires utilities, advocates, and policymakers to consider how to balance equitable access to carbon-free resources with rising energy bills and the need to address climate change. Currently, 34 million U.S. households—more than a quarter of households—struggle to meet their energy needs, and many of these households frequently face the risk of having their utility service terminated due to late or non-payment. The energy affordability crisis disproportionately impacts Black and Latino/Hispanic households, households with children, and renters. Low-income families, for example, spend, on average, 8.6% of their household income on energy bills compared to higher-income households, which spend 3% of their income on energy bills.

Community solar, in particular, provides an opportunity to expand solar access to low-income families, renters, and multifamily building residents. The U.S. Department of Energy (Energy Department) defines community solar as “any solar project or purchasing program, within a geographic area, in which the benefits of a solar project flow to multiple customers such as individuals, businesses, nonprofits, and other groups.” Community solar customers typically subscribe to—or in some cases own—a portion of the energy generated by a solar array, and receive an electric bill credit for electricity generated by their share of the community solar system. Community solar can allow customers or subscribers to access meaningful benefits of renewable energy, such as reduced energy costs, expanding access to low- income households, community ownership, and equitable workforce development and entrepreneurship opportunities.  

Community solar can bring clean energy within reach of those for whom rooftop solar is not a feasible or economic option. But if community solar programs are not designed with intentional consumer protections, low-income subscribers or participants may not experience equitable outcomes or meaningful benefits. When carefully designed and coordinated with other low-income economic assistance and clean energy programs, community solar may go a long way toward reducing the low-income energy burden and helping low-income communities to address climate change. 

Although community solar programs can provide substantial benefits, states must implement robust consumer protections to avoid adverse impacts on low-income families. Low-income consumers are frequently the targets of predatory sales and marketing, and have been for decades. To combat the repeated targeting of these communities, federal and state regulators have adopted numerous consumer protections, such as the Federal Trade Commission’s door-to-door sales rule and state Unfair and Deceptive Acts and Practices (UDAP) laws. Emerging energy technologies, and deceptive and abusive practices related to energy, have led regulators to adopt new protections as these products come onto the market. To protect low-income consumers from financial harm and to preserve the integrity of new community solar programs that will serve low-income families, consumer protections should be implemented from the start. 

This report will provide states with model community solar consumer protections to ensure equitable outcomes for low-income participants. Specifically, this report will discuss existing community solar models, best practices, and state policies; the U.S. Department of Energy’s effort to advance community solar through a state-managed low-income subscription software; and examples of key guardrails to protect low-income subscribers or participants and ensure substantial bill savings.