Solar incentives designed to empower underserved communities

The Greenhouse Gas Reduction Fund (GGRF), a part of the Inflation Reduction Act (IRA), promotes solar and power storage installation in economically disadvantaged areas. During a recent webinar, the Connecticut Green Bank highlighted progress made in increasing the state’s supply of solar power generation and how homeowners and landlords can both take advantage of the $27 billion GGRF.

Josh Ryor, the managing director of the Public Utilities Regulatory Authority (PURA), explained to the webinar audience that the state is using the six-year Residential Renewable Energy Solutions program as the next step in shepherding federal funding to residents and homeowners.

“This replaced the legacy programs that we had in place prior to Jan. 1, 2022, which was traditional net metering,” Ryor said. “Legacy net metering compensated owners of residential solar for the energy that is produced from those systems and the Residential Solar Investment Program provided upfront or performance-based incentives for the renewable energy attributes of the system.”

The new program is available for clean energy projects of up to 25 kilowatts, though Ryor noted the average residential system tops out at around 10 kilowatts. The program also has a 20-year term and two options for compensation.

“The tariff or compensation under this program actually lasts for 20 years – so if you install a system, you will receive compensation for the output of your system for 20 years,” Ryor explained. “There are two different options for how you’re compensated. The first is a netting tariff, which is similar to that currently in place. The key difference is instead of getting kilowatt hour (kWh) credits on your bill for any excess generation that your solar projects produce you actually get monetary credits.”

The alternative is a “buy-all” option which provides a fixed compensation rate for the entirety of the 20-year term. The residential tariff rates will differ by energy provider and whether a customer opts for the buy-all or a netting rate.

Low-income residents will be able to receive an additional 3 cents per kWh under the buy-all rate, and 2.5 cents per kWh under netting. Living in a distressed municipality provides eligibility for an additional 1.75 cent adder under the buy-all and 1.25 cents per kWh through netting.

“That matters because there have historically been some issues in deploying solar in low-income areas because of the credit rating scores associated with those customers,” Ryor added. The result will be that utility companies can use their credit rating for financing solar installation in place of the customer.

Landlords will also be able to take advantage of the program for some properties under Public Act 21-48, which provides three tiers of access for multi-family affordable housing.
Ryor stressed that all levels will likely qualify for the low-income adders. According to PURA’s research, since its implementation in 2022 the program has already seen increased levels of solar installation across all income levels in the state, although the data did not immediately indicate how many participants were in multifamily housing.

Sergio Carrillo, the Green Bank’s managing director of incentive programs, spoke to the value of installing batteries to store the energy produced by solar programs, both to improve resiliency in emergencies and provide the entire power grid with greater flexibility. He discussed the Energy Storage Solutions Program which will provide for the coverage of installation costs and potentially provides hundreds of dollars in annual incentives to those who allow the grid to tap into home batteries when needed.

Connecticut Green Bank President and CEO Bryan Garcia emphasized the benefits of solar for low-income families as a way to insulate them from fluctuations in the energy market as well as inflation. He pointed to the sharp increase in overall energy costs that came with the Russian invasion of Ukraine, spiking by $0.12 to $0.37 per kWh in the first half of 2023.

“You could actually see that in the first six months of this year when those inflationary pressures hit them that their solar PV systems actually allowed them to hedge all of that off, so within six months they saved $4 million overall, about $900 per family,” he said. “Imagine what that does to families, specifically low-income families, and those that live in disadvantaged communities when an external market factor impacts electric rates.”