To Meet Biden's Solar Goal, Working Families Need Equitable Access to Affordable Solar
The White House announced a goal last week of producing 45 percent of our nation’s electricity from solar power by 2050. This is an encouraging target and reaching it will require all Americans to have the opportunity to access affordable solar energy generation. Unfortunately, the way existing federal policy is designed, many families – particularly in communities of color – are being left behind.
Recent extreme weather events have shone a spotlight on this unfortunate reality. If policies don't make clean energy technologies more affordable to low- to-moderate income households, then we all can envision a future where one neighborhood has power and is marginally disrupted after a severe storm while another neighborhood is left in the dark for days and potentially weeks, because that is exactly what is happening right now in Louisiana. This isn’t an if it happens, it’s the norm. We must stop leaving our most vulnerable communities, many of which are black and brown, in the dark.
One of the primary federal tools used to support homeowners looking to invest in solar panels is the residential solar tax credit, which provides a write off for a portion of that investment. But for lower-income earners with limited or no tax liability, the credit is essentially ineffective and non-existent.
Of those lower income earners, 3.2 million Black households and 3 million Hispanic households, are unable to benefit from the residential solar tax credit because they do not have sufficient taxable income. These are families that have the least ability to bear the upfront costs of clean energy investments, yet who stand to benefit the most as lower income households spend a disproportionately high amount of their income on energy because they can ill afford costly home maintenance and efficient appliances.
The bottom 50 percent of income earners currently require more than 7 years on average to realize the full value of the residential investment tax credit for solar. Making this tax credit more accessible to lower-income households and main street Americans will enable the rapid deployment of solar needed to protect many of our most vulnerable communities from the impacts of climate change, while making them more resilient to its effects.
By making the residential investment tax credit direct pay or refundable we will realize a solar policy shift that will bring material benefits to our communities who have long been left behind and will allow us to begin to address systemic racial, economic and environmental justice disparities.
A 2018 report from the National Renewable Energy Laboratory found that approximately 42 percent of all new energy needs to come from residential solar panels on low-to-moderate income households across the U.S., with the greatest potential found on single-family owner-occupied buildings. Converting the residential solar tax credit to direct pay would open up solar access for at least 26 million low-and-moderate income households, enabling a more just and equitable transition to a clean energy economy.
An additional study by the University of Michigan’s Urban Energy Justice Lab determined that “in many communities of color, at least three out of every four homes are estimated to be solar suitable,” based on technical potential estimates. The failure to ensure black, brown and working households are able to fully realize the benefits of the residential solar tax credit is not just financially impacting them – it also perpetuates pervasive environmental injustice. We have already seen growing inequities in terms of which communities have access to resilient sources of energy, and the growing impacts of climate change and extreme weather will only further exacerbate this underlying problem.
In 2016, a New Orleans based nonprofit proposed the development of a network of microgrids, including residential solar systems and batteries that would provide backup generation during extreme weather events and if the grid went down. Instead, the City decided to approve a new natural-gas-fired power plant, which itself failed during Hurricane Ida — contributing to a complete and catastrophic utility electric failure across the metropolitan area.
Solar-powered and battery-supported homes were among a small number of New Orleanians to have power in the wake of the disastrous storm. Environmental and civil rights groups, non-profits and good Samaritans are now scrambling to deploy solar equipment at a larger scale in the region as a temporary solution. We must shift from these piecemeal band-aid responses and empower homeowners across the U.S. to become more energy independent and participate in a decentralized and distributed approach to energy resiliency.
But none of this is possible unless Congress takes action. We have a singular opportunity to amend the tax code through the upcoming budget reconciliation bill, which must include a provision that would convert the residential solar tax credit to direct pay. This would single-handedly extend the benefits of solar to millions of low-to-moderate income families. Sadly, to date, not a single member of either the Senate or the House has introduced a bill or an amendment to this end.
As temperatures rise with no signs of slowing down and devastating storms become more and more common, elected officials in both parties are talking more about the need to invest in clean energy and resiliency. This is an opportunity for them to literally put their money where their mouths are and take a simple step that would advance both climate and racial justice for families in every state. Build Back Black.
Denise Abdul-Rahman is NAACP Environmental and Climate Justice Field Organizer.