In the United States, approximately 54% of low-income households live in single-family homes (69% of which are owner occupied and 31% of which are renter occupied). Single-family home retrofits are an important focus for most low-income energy programs across the U.S. given utility costs are, on average, highest in this type of housing. For example, very low-income (0-30% Area Median Income), owner-occupied households spend an average of over 20% of their annual income on energy bills. (Source: LEAD Tool based on Census 2011-2015 averages)
CELICA Program Models
What follows are some specific program design options for low-income, single-family homes explored by partners in the Clean Energy for Low Income Communities Accelerator (CELICA). While some of the models may have applicability to other housing types, CELICA partners primarily applied them with a focus on low-income, single-family home retrofits.
Utility on-bill tariff models with promised net savings
The CELICA Issue Brief: Low-income Energy Efficiency Financing through On-Bill Tariff Programs provides an overview of how on-bill tariffs can address barriers to low-income home energy efficiency. Examples of how state and local agencies can support the development and financing of such programs are also provided in the brief. The on-bill tariff model has so far been implemented primarily by rural electric cooperatives. In addition to owner-occupied homes, this model may also address barriers associated with financing energy retrofit projects for rented homes.
Incentives for energy efficiency savings agreements combined with on-site solar leasing that guarantee savings and fixed (non-escalating) costs for participating households
As noted in the CELICA Case Study: Connecticut's Efforts to Scale Up Integrated Energy Efficiency and Renewables for Low-Income Homes, the Connecticut Green Bank’s Solar for All Program bundles energy efficiency savings agreements and rooftop solar project financing for customers and offers guaranteed cost savings to participating households. Alternative underwriting allows energy bill payment history to be used for participant qualification. As of 2018, Connecticut reports that the rate of rooftop solar PV on low-income homes in the state is on par with the rate for non-low-income households.
Utility and state funding combined with federal funds to incorporate solar measures into Weatherization Assistance Program projects
Stakeholders can learn from the State of Colorado’s experience incorporating rooftop solar into their state-run, low-income Weatherization Assistance Program. The CELICA Preliminary Assessment Guide for Integrating Renewable Energy into Weatherization and Weatherization Grantee Renewable Energy Technology Application Template can help weatherization grantees understand whether they are ready to pursue this approach.
Unsecured loan underwriting to make a low cost financing option for energy retrofit projects and home repairs accessible to qualifying low-income households
As noted in the CELICA Case Study: Connecticut's Efforts to Scale Up Integrated Energy Efficiency and Renewables for Low-Income Homes, this model has been employed by the Connecticut Green Bank as part of its Smart-E Loan Program. Under this program, the Green Bank uses alternative underwriting to support access to financing for credit-challenged customers, including low-income households that are unable to access grant programs and that the bank has determined can afford the monthly payments on the loan.
Integrated energy efficiency and healthy home program interventions and leveraged funding that improve access to energy services for low-income homes
CELICA partners in Washington, New York, and Connecticut have developed pilots and pathways to utilize additional state funds to address health and safety issues that are beyond the scope of federally-funded energy programs. These efforts are featured in the CELICA Issue Brief: Promising Examples of Integrated Energy Efficiency and Health Services for Low-income Households. Such approaches that demonstrate improved health outcomes hold promise to improve access to energy efficiency services while promoting home health for many low-income households.