Using solar photovoltaics to power affordable housing is a concept that is gaining momentum.
‘It makes business sense for us,’ says Scott Sarem, CEO of Carlsbad, Calif.-based installer Everyday Energy. ‘We figured out a way to make money while we provide a valuable service to an underserved community.’
Everyday Energy is one of several companies participating in a project coordinated by the California Public Utilities Commission (CPUC) to install solar photovoltaics on low-income residential housing. The program, Multifamily Affordable Solar Housing (MASH), provides rebates to offset the project costs of installing solar on multifamily affordable housing buildings in California.
In 2008, the CPUC established MASH with $108.34 million as a component of the California Solar Initiative program. Pacific Gas and Electric Co. and Southern California Edison administer the program in their service territories, and the California Center for Sustainable Energy administers the program in San Diego Gas & Electric's service territory. Incentives are $1.90 per watt to offset common-area load and $2.80 per watt to offset tenant-area load. Common areas include elevators and laundry facilities.
Sarem says it helps that the CPUC implemented virtual net metering (VNM), which was piloted under the earliest MASH projects and is now available to the general multi-tenant market. VNM allows the building owner to install a single solar system to cover the electricity load of both common and tenant areas connected at the same service delivery point, but the electricity does not flow directly to each tenant meter. Instead, it feeds back onto the grid, and the utility then allocates the kilowatt hours from the solar energy produced by that rooftop system to the building owner's and tenants' individual accounts, based on a pre-arranged allocation agreement.
The alternative, having individual tenant meters, would not be cost-effective. ‘Our typical building size is 100 units to 300 units,’ Sarem says. ‘You would have to install inverters, and that would be too expensive.’
He adds that the affordable housing developers typically do not have a lot of money. ‘It has to make financial sense,’ Sarem says. ‘Everybody wants to go green, but it has to pencil.’
The MASH program is still taking applications, and it is funded through 2015. Assembly Bill 217, which is awaiting a hearing in the state legislature's Utilities and Commerce Committee, would fund the program through 2021.
Other solar companies agree that affordable housing is a logical place to install solar panels and that the projects do have their challenges.
‘In our experience, the biggest challenge of providing solar for affordable housing projects is the amount of time it can take for projects to be implemented and for agencies to pay their vendors,’ says Raju Yenamandra, vice president of sales and business development for solar panel manufacturer SolarWorld, based in Camarillo, Calif. ‘If these aspects can be streamlined, it would not only improve efficiency for the agency but improve cashflow for the manufacturer and installer as well.’
SolarWorld has supplied solar panels for affordable housing projects, such as a 2 MW installation for the Housing Authority of the County of Santa Barbara installed by Planet Solar in 2011 and a 330 kW project for the Tampa Housing Authority developed by Johnson Controls and installed by Vergona Bowersox Engineering in 2012. A Denver Housing Authority project featuring SolarWorld panels is scheduled for completion this year. The installer of that 2.5 MW project is Boulder, Colo.-based Namaste Solar, and Denver-based Oak Leaf Energy Partners developed the project and negotiated the financing. Atlanta-based Enfinity America Corp. provided financing and owns and operates the system.
‘Supplying solar panels for affordable housing projects makes inherent sense because it allows housing authorities to reduce their operating costs, freeing up these agencies' resources to serve the core needs of their stakeholders,’ Yenamandra says.
Solar thermal companies are also finding opportunity in affordable housing. In April, AMCAL Housing, a Los Angeles-based affordable housing developer, announced it entered an agreement with solar thermal company Skyline Innovations for the financing and development of solar hot water systems in 11 multifamily properties in Los Angeles and San Diego. The solar thermal project will enable AMCAL to secure a 10-year, 30% discount to its utility rate for solar hot water used by each building, with no capital investment.
‘Affordable housing projects present unique opportunities and challenges,’ says Sandra Lee, director of sales and marketing for Skyline Innovations. ‘In certain cases, owners do not qualify for federal tax incentives for renewable energy, or they are capital-constrained.’
Lee adds that Skyline is a project financier as well as a project developer, which can help affordable housing customers, as they do not have to invest capital into obtaining a solar system. The financier passes on the benefits of tax credits through a low energy price.
‘Solar hot water makes sense for affordable housing,’ Lee says. ‘It is a simple, reliable and proven technology.’
Nora Caley is a Denver-based freelance writer.