On Earth Day, the Biden Administration marked an important step toward accessible, affordable, and equitable residential and community solar as the U.S. Environmental Protection Agency (EPA) announced the program awardees. Funded by the Inflation Reduction Act, Solar for All is part of the Greenhouse Gas Reduction Fund, a $27 billion set aside to reduce greenhouse gas emissions and other air pollutants, deliver the benefits of greenhouse gas- and air pollution-reducing projects to American communities, and mobilize financing and private capital to stimulate additional deployment of greenhouse gas and air pollution reducing projects.
What Is It?
The Solar for All program, designed to provide forms of low-interest capital for residential solar and residential-serving community solar projects, as well as addressing the non-financial barriers to solar deployment, will allocate $7 billion worth of grants to applicants across the vast majority of states, as well as territories, tribes, municipalities, and non-profits. Ranging from $30 million to $250 million, the grants were awarded to applicants who intend to invest in solar programs serving low-income and underserved communities.
On April 21st 60 applicants were selected to receive grants, chosen through a competitive review process including experts in climate, power markets, environmental justice, labor, and consumer protection. To be eligible, grant recipients are required to fit within the program’s list of eligible technologies:
- Behind-the-meter solar, including rooftop, pole, and ground-mounted, that serves single- and multi-family residences.
- Residential-serving community solar, with the caveat that at least 50% of the generated electricity must be delivered to residential customers in the same utility service territory.
- Associated energy storage, deployed in conjunction with solar, maximizing the potential of the grant’s funding.
- Enabling upgrades, which houses any investments to ensure a building is ready for solar to be installed – such as roof repairs and energy efficiency upgrades.
How Will It Work?
Solar is one of the most affordable forms of electricity with immense potential to lower energy costs for Americans. Plus, residential solar electricity leads to reduced levels of air pollution in neighborhoods, and ultimately healthier communities. Yet the upfront costs of going solar, installing energy storage, and making efficiency improvements are steep, leaving the massive benefits of residential and community solar, energy storage, and energy efficiency out of reach for many.
The impressive, targeted investments of the Solar for All program will provide significant household savings for communities that haven’t traditionally had access – to the tune of roughly $350 million in annual energy savings. These cost savings are central to the program’s purpose, as low-income families spend as much as three times more than the average household on energy. While many of the grant recipients have already been supporting solar programs in low-income communities, in at least 25 states, recipients will launch programs in communities that have not seen substantial investment in clean energy before, opening markets, and enhancing the impact of distributed solar in the area.
And the grant funding supports more than just solar. The program puts a special emphasis on reliability and resiliency by including funding for energy storage and energy efficiency upgrades in conjunction with residential and community solar developments. Alongside distributed solar, battery storage is a dispatchable source of backup power that can help weather a power outage with no fuel inputs and can support a building’s essential loads for days at a time. This combination of distributed generation and storage is vital to ensuring reliable power, especially as there were 64% more major power outages in the 2010s than in the decade prior.
These upgrades also unlock another innovative technology that can support the growing electricity demand: virtual power plants (VPPs). VPPs become available when distributed energy resources (DERs), like the solar panels, battery storage, and energy efficiency upgrades promised by Solar for All, are combined and managed as a single resource. VPPs offer an affordable and efficient way to reduce or shift demand, as well as an opportunity for consumers to sell unused electricity back to the grid. By providing equitable access to DERs for low-income communities, more households can participate in VPPs – increasing their potential benefits for everyone
What Needs to Happen?
Solar for All can indeed unlock the reliability and cost savings of distributed solar and energy storage for hundreds of thousands of households. But it’s not going to happen overnight. Despite program assistance for obstacles like complex siting, permitting, and interconnection processes, states still play a big role in ensuring the funds don’t get caught up in the rocky path to implementation.
In some states, energy policies pose challenges to deploying these technologies in communities, with some outright or obstructing them. But this doesn’t mean deployment is out of reach. To ensure deployment, states will need to lean on and develop smart policies that can streamline implementation to guide funding through these complexities.
For example, many of the communities that are set to receive distributed solar and storage from Solar for All haven’t seen much investment in clean energy before. Ahead of deployment lies siting and permitting, which can be especially long-winded and complex for local governments that have yet to encounter an influx of applications. In these cases, deployment for solar projects funded by Solar For All may stall, meaning higher costs and potential benefits lost.
To address some of these difficulties, the U.S. Department of Energy supported the creation of the Solar Automated Permit Processing Plus (SolarAPP+), an online platform that processes instant permits for code-compliant residential solar and battery storage systems. SolarAPP+ helps local governments streamline permitting and inspection processes for households looking to adopt DERs – and can help ensure grant funding from Solar for All is fully realized. Several members of Congress also proposed the SHINE Act (S.3099), designed to further support state, local, and Tribal governments using SolarAPP+.
Additionally, some states have a ceiling on the amount of distributed generation, including solar, allowed to connect to the grid. In this case, these caps could limit Solar For All’s effectiveness in areas where proposed projects may exceed the cap. However, states can raise these ceilings, making it easier for projects to connect to the grid and begin bringing communities the suite of benefits offered by distributed solar. Michigan, for example, raised its utility’s distributed generation program from 1% to 10% of peak load (SB 271), enabling more customers to connect their rooftop solar systems to the grid.
Without state coordination, regulatory framework implementation, and political will to ensure Solar for All’s funding successfully deploys distributed solar and storage, the value these investments provide won’t match their potential, and the communities who need it will continue to go underserved. Ensuring Solar for All delivers actual, tangible benefits – cost savings, cleaner air, resiliency, and reliability – will take a shared dedication to a clean energy future that benefits all Americans equitably and affordably. Advanced Energy United and its members are dedicated to working with states to support policies that get advanced energy on the ground, bringing us closer to realizing that envisioned future.