LoTradeCoin Wealth Hub

One of the most common critiques of policies that encourage the adoption of rooftop solar is that the benefits go mostly to affluent households.

But as solar grows in popularity across the country, it also is expanding its reach across income levels.

The median income for a household that installed rooftop solar in 2023 was $115,000, down from $141,000 for households that installed solar in 2010, according to the 2024 edition of an annual report from Lawrence Berkeley National Laboratory.

The progress is clear, but gradual. The $115,000 figure from 2023 is just $1,000 less than in 2022.

The long-term trend is that the median income for a household with rooftop solar is getting closer almost every year to that of the median income for owner-occupied households.

“Solar has gotten cheaper, and so that has made it more accessible to a broader swath of the population,” said Galen Barbose, a research scientist at the lab and co-author of the report.

He was referring to the long-term decrease in the installed price of a rooftop solar system. Other factors include government policies that aim to make solar less expensive for low-income households, and the availability of financing methods such as solar leasing that help to reduce the upfront cost.

The report also describes a broadening and deepening of the market for rooftop solar.

“More people can access solar in new places and also within places where the market already existed,” said Sydney Forrester, a policy researcher at the lab and a co-author of the report.

The broadening includes the growth of solar in places such as Maine, where electricity generation from small-scale solar increased by 87 percent from 2022 to 2023, according to the U.S. Energy Information Administration.

The annual report, “Residential Solar-Adopter Income and Demographic Trends,” is based on a sample of 4.1 million rooftop solar systems, which is nearly 90 percent of all such systems in the country as of last year.

The large sample includes enough data to show state-level trends. For example, Michigan has the largest gap between the median income of households with solar and the median income of all households. Idaho has the smallest gap.

There are many possible explanations for the state figures. A large gap may indicate that a state has a concerning lack of access to solar for low-income households. But it also may mean that a state is only beginning to develop solar, with small sample sizes that can skew the results.

I asked the authors why they think it’s important to track incomes and other demographic information for rooftop solar customers.

“Distributed solar has for a long time benefited from public policy, from policies that, ultimately, everybody is paying for whether it’s through tax credits or through utility rates,” Barbose said. “Because the cost of these policies is being borne broadly, it’s important that the benefits also accrue broadly. And so one of the motivations for this report is to kind of track and document the progress towards achieving a more equitable, proportional distribution of those benefits.”

Most of the main findings show progress, but I still asked the authors if there was anything in the data that’s concerning.

Barbose said he has concerns that some low- and middle-income customers may be receiving fewer financial benefits from their systems because of the use of solar leasing and other third-party ownership models.

Leasing makes solar accessible to people who can’t or don’t want to pay $10,000 or more to buy a complete system. The downside is that leases often come with terms that mean that the lease company gets some of the financial benefit of the system.

The upshot is that people with an ability to pay high upfront costs for solar can end up saving much more money on their electricity bills over time than someone who is leasing a system.

John Farrell, co-director of the Institute for Local Self-Reliance, works to expand access to renewable energy. I asked him what he thinks of the Berkeley lab’s report.

“I’m very encouraged by the report’s findings that solar continues to spread further and further down the income scale, as we’d expect from the history of technology diffusion like smartphones,” he said. “In particular, I expect the expansion of access to low- and middle-income households to accelerate due to the impacts of the Inflation Reduction Act and Solar for All programs.”

In other words, next year’s edition of this report should be interesting.

Several state and federal laws were too new to have much of a bearing on 2023 results, but may have effects that show up in data for 2024.

The big one is the IRA, the 2022 federal law that has provisions for rooftop solar, including the Solar for All program that helps to provide this technology to low-income households. Some of those programs hadn’t yet started in 2023.

Another significant change is the implementation of California’s revised rules on net metering, which reduced some of the financial benefits for solar owners. The new rules took effect on April 15, 2023, but installations that year were front-loaded by customers who wanted to get ahead of the rule changes.

It’s difficult to predict what the 2024 data will show, but the long-term trend is clear: Solar is gradually moving closer to being within reach for everyone.

---

Other stories about the energy transition to take note of this week:

Lithium-Ion Battery Pack Prices See Largest Drop Since 2017, Falling to $115 per Kilowatt-Hour:Lithium-ion battery prices fell by a lot this year due mainly to oversupply, as BloombergNEF reports. The global average of $115 per kilowatt-hour is down from $144 per kilowatt-hour in 2023. Prices were lowest in China, a country in which EVs have achieved price parity with gasoline vehicles. Prices in the United States were 31 percent higher than in China, reflecting that the United States has a less developed EV market. A decrease in battery prices helps with affordability of EVs, but it also hurts profitability for battery makers.

Battery Recycling Had a Rough 2024:This year has been difficult for the emerging battery recycling industry in the United States. The problems included layoffs, stalled and canceled projects and reduced expectation of what new recycling technologies are capable of doing, as Julian Spector reports for Canary Media. Battery recycling is going to be essential for managing waste as electric vehicles reach the end of their lives. People working in the industry remain hopeful that the recycling technologies will work in the long run.

Small SUVs Are Now the Country’s Cleanest Cars as EVs Become More Popular in the Segment:Compact SUVs are the cleanest category of vehicles on the road, according to the U.S. Environmental Protection Agency. This surprising result is due in large part to the popularity of EVs in this segment. More than one-third of new compact SUVs being sold are electric, which is a much larger share than the 15 percent of sedans that are electric, as Nicolás Rivero reports for The Washington Post. Examples of compact SUVs include the Tesla Model Y and the Ford Mustang Mach-E.

BP Forms an Offshore Wind Joint Venture in Renewables Retreat:BP and the Japanese power company JERA have agreed to a joint venture that will become one of the world’s largest operators of offshore wind farms. The formation of the venture means the offshore wind assets would be a step removed from BP’s core business, which reduces the company’s focus on renewables, as Ron Bousso and Yuka Obayashi report for Reuters. BP actions are part of a larger trend as oil companies such as Shell and Equinor also are focusing on oil and gas operations in an attempt to boost short-term profits.

Inside Clean Energy is ICN’s weekly bulletin of news and analysis about the energy transition. Send news tips and questions to [email protected].