How to bring solar power to the poor

The Gunther Report

How to bring solar power to the poor

Solar roof

Like many environmentally friendly products, rooftop solar power is a luxury that most Americans can’t afford: Before subsidies, it costs tens of thousands of dollars to power a typical house.*

GRID Alternatives, an Oakland, Calif.-based nonprofit, is trying to change that -- and is making headway.

Launched in 2004, GRID Alternatives has grown along with the solar industry. This year, it expects to install solar on the rooftops of about 1,000 California homes owned by low-income people. It has seven offices, a staff of about 100 and a budget of about $25 million. The organization will soon expand to Colorado and beyond.

GRID Alternatives relies on volunteers, panels donated or sold at low cost by the solar industry, subsidies from the state of California and donations to make the model work. “It’s a barn raising model,” says Erica Mackie, the co-founder and executive director.

This month, GRID Alternatives announced partnerships with two big solar panel manufacturers that should drive its growth further. SunPower, with headquarters in San Jose, Ca., and Yingli Solar, a Chinese manufacturer with U.S. offices in San Francisco, are supporting GRID Alternatives with a combination of donations and “fair market value sales” to bring clean energy to as many as 600 low-income families in California and Colorado, and to provide hands-on solar experience to thousands of green job seekers. Many who volunteer with GRID Alternatives go on to jobs in the solar industry, it turns out.

I met recently with executive director Erica Mackie in Oakland. Erica is a mechanical engineer. She was was working with her co-founder, Tim Sears, as energy efficiency consultants when the two of them decided to leap to the nonprofit world. They could see solar PV starting to become accepted in the commercial sector and wondered why “people who are struggling month to month to pay their bills have no access to this wonderful technology,” she told me.

The reason, of course, is that the upfront costs of rooftop solar are high and the complexity of installing panels is daunting to many people. To overcome the financial hurdles, GRID Alternatives takes advantage of a program known as Single-family Affordable Solar Homes (SASH) that it manages for the state of California. Financed by utilities Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric, SASH provides fully or highly subsidized solar systems to qualified low-income homeowners. Then, once the money’s lined up, GRID Alternatives does everything a for-profit solar contractor would do -- the paperwork, the arrangements required to connect to the utility, installation, the warranty and maintenance.

Homeowners own the solar systems which, in theory, should add value to their homes. In the meantime, they enjoy dramatically reduced utility bills. When solar panels go up on one house, demand grows. "In a lot of neighborhoods, it’s families telling each other," Erica says.

Photo courtesy of Smileus via Shutterstock.
 

 

All of this is laudable. But can it scale? Nonprofits that depend on donations can’t be counted on to grow. Having said that, it’s smart for utilities and the solar industry to support programs like SASH and nonprofits like GRID Alternatives. If solar spreads widely, utilities won’t have to build more power-generating facilities. The solar industry, meanwhile, needs all the goodwill it can get, given its dependence on subsidies from Washington and state capitals.

Jigar Shah, a solar industry pioneer who now leads the Carbon War Room, told me by email:

The process of bringing in “everyone” in to the solar revolution is much harder than it appears.  Most people believe that the poor should be grateful that they are receiving solar and consequently reduced electricity bills, but the education process is just getting started [and] Grid Alternatives is doing it better than anyone….My sense is that their model for bringing solar to everyone will be commonplace within 5 years.

Certainly the solar industry as a whole is growing. Just today, the Solar Electric Industries Association reported that the industry "installed a record 1,855 megawatts (MW) of photovoltaic (PV) capacity in 2011, more than doubling the previous annual record of 887 MW set in 2010." It’s the first time the U.S. solar market has topped 1 gigawatt (1,000 MW) in a single year.

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* It’s not easy to estimate the cost of putting solar panels on a typical home. GRID Alternatives says its average systems size is around 2.8 kW (AC), but it has put in systems as small as 1 kW and as large as any residential installer would. Our range for retail cost would be $10,000-$30,0000. Last fall, Martin Lamonica of CNET, citing a government study, reported that:

From 2009 to 2010, the price of a residential solar electric system fell 17 percent to $6.20 per watt, or a $1.30 decline. Measured from 1998, the installed costs fell 43 percent.

According to a solar industry website, an average home requires about a 5- or 6-kilowatt solar system. Do the math and the costs add up to $25,000 to $30,000 per home.

But if you’re thinking of installing solar on your roof, you need not pay in cash. Leasing models from such companies as SunRun, Solar City and Sungevity have made solar more affordable. So have an array of subsidies for homeowners (here in the U.S.) and manufacturers (in China).