| IMPACT AREA | Affordability, resilience, climate mitigation, green jobs |
| TOPIC | Utility bills |
| REGION | State, Federal, Utility |
| AFFORDABILITY PATHWAY | Decarbonization |
| OVERSIGHT | State social service agencies, energy offices, green banks |
| POLICY MECHANISM | Legislation |
PolicY OVERVIEW
Challenge
Although solar installations have been trending up among low- and moderate-income households, they are doing so at a slower pace that higher-income households, and energy storage capacity (e.g. batteries) among low- and moderate-income households lags significantly. In addition, nearly all onsite solar (+storage) installations are undertaken by owner-occupied households, meaning renters are much less likely to benefit from these clean energy technologies.1 With clean energy tax credits revoked2 and threats to the Solar for All program,3 solar (+storage) adoption—and associated affordability and resilience benefits—can be expected to remain financially out of reach for many low- and moderate-income households in the absence of state interventions.
Policy Solution
Programs targeted at low- and moderate-income households and multifamily homes can facilitate the equitable and affordable adoption of solar (+storage), lower energy costs, and increase climate resilience. For households with incomes at or below 80% of Area Median Income (AMI), solar installations were found in one study to reduce median energy burden from 7.7% to 6.2%. For those with incomes below 120% AMI, energy burdens decreased from 4.1% to 3.3%. High or severe energy burdens (above 6% or 10% respectively) decreased from about two-thirds of low-income households to just over half through adoption of solar energy.4
Model Policy Features
Key policy components that make solar (+storage) programs effective include:
- Funding and/or financing for residential solar (+storage) for low- and moderate-income households, tiered by income level (e.g., <100% or <150% of Federal Poverty Level, <60% or <80% of Area Median Income); may be part of a larger incentive program targeting households at all income levels.
- Funding covering some or all of up-front solar (+storage) installation costs is provided in the form of grants, on-bill financing with stringent consumer protections (e.g., to ensure combined bill is lower with solar), low- or no-interest loans, and rebates, with a preference for grants for the lowest-income households.
- Programs targeted at both single-family and multi-family (renter) homes, individually or as companion programs.
- No-cost home energy assessments and referrals to pre-weatherization and/or weatherization assistance.
- Stacking capability (i.e. grants can be used with other incentives), paired with system navigation assistance for applicants, to take advantage of other federal, state, or local incentive programs.
- Multifamily affordable home programs typically use virtual net metering to provide a guaranteed savings discount for tenants of multifamily affordable home programs, while providing landlords certain benefits (such as offsetting electricity needs for common areas)5—thus addressing the split incentive problem.
- May include higher-level incentives or funding set-asides for priority low- and moderate-income households, such as those in areas with frequent outages, medically vulnerable populations such as the elderly or those dependent on electrically-powered medical equipment, or those in particularly climate-vulnerable regions.
- Reduces participation barriers, such as language access, consolidation of existing programs and/or no-wrong-door approaches, categorical eligibility (whereby participation in other government assistance programs qualifies a household for eligibility in offered programs), geoeligibility (whereby applicants within a priority census tract or census block are automatically eligible), plain language contracts, simplified applications, robust outreach, and bans on application/exit fees and credit score review.
- Includes provisions for regular data reporting and public transparency (e.g., public-facing data dashboards, program evaluation, audits to ensure meaningful benefits reach intended populations).
- Includes high road job and training or apprenticeship opportunities, including strategies to reach underemployed communities.
- Requirements for utilities to prioritize solar (+storage) interconnections for program participants, including financial repercussions for unreasonable delays.
- Provisions to allow for deed restrictions that strike a balance between the needs and interests of low- and moderate-income households and the protection of public investments (i.e. preventing property flipping), such as agency discretion in application of deed restrictions, deed restriction duration, and other measures to maintain low-income housing stock.
Potential Policy Drawbacks and Pitfalls
- Net metering (the mechanism typically used to compensate solar customers for the solar power they generate) can disqualify residents for bill assistance programs.6
- Customers on low-income electricity rates will have longer payback times for their upfront cost share of the solar (+storage) project since their effective savings, per kilowatt-hour generated, will be lower.
- Incentives that are provided only after a project is installed and interconnected may still require households to meet upfront costs out-of-pocket, presenting a barrier for those without access to sufficient cash.
- In many places, residential solar (+storage) installations face long interconnection delays from utilities, delaying customers from seeing benefits for months or even years.
Complementary Policies
Complementary policies that can enhance the functionality of residential solar+storage programs include:
- Pre-weatherization, weatherization, electrification readiness, and electrification to facilitate the shift to clean energy sources.
- Community solar and balcony solar to expand accessibility to solar.
- Distributed energy interconnection reform to address interconnection delays.
- Residential building codes to codify requirements and standards for solar+storage installation or readiness in new residential construction and remodels.
- Comprehensive DER valuation to enable residential solar+storage to be paid for, in part, through compensation of any broader benefits provided to the grid, such as deferral of distribution upgrades or peak demand reduction.
Additional supporting policies include contractor education and public housing energy efficiency improvements.
EXAMPLES
1. Connecticut Residential Solar Investment Program (RSIP)
Details:
- Created in 2011 and sunset in 2022, the program offered rebates and incentives for homeowners to install or lease rooftop solar.7
- Administered by the Connecticut Green Bank, which was also created in 2011, with a requirement that it implement a residential solar program that would lead to at least 30 megawatts of new capacity (later increased to 350 MW) by the end of 2022.8
- Program funded through a combination of federal funds, renewable energy charges on electric bills, and the sale of Solar Home Renewable Energy Credits (SHRECs), which are created through the generation of energy from a homeowner’s panels by the Connecticut Green Bank; utilities then purchase the SHRECs from the Green Bank through Master Purchase Agreements.9
- Households leasing through the program typically pay a monthly fee; power generated offsets leasing costs.10
- An evaluation of the RSIP found that it was successful in increasing access to residential solar for low-income and Black, Indigenous, and People of Color (BIPOC) households, with solar adoption in low- and moderate-income communities increasing by 187%.11
- The program has now been replaced by the Residential Renewable Energy Solutions Program, which offers both net metering and a “Buy All Tariff,” whereby the utility buys all the electricity generated in exchange for a fixed-rate tariff in effect for 20 years.12
Challenges:
- Although an evaluation found the program to be effective in increasing solar uptake in low-income and BIPOC communities, the incentives offered may not be sufficient to enable some households to afford the upfront costs.
- The Residential Renewable Energy Solutions Program improves upon the RSIP by allowing master-metered multifamily affordable housing to participate, with the requirement that 20% of the net present value of the system is used for tenant-serving building upgrades.13
2. California Self-Generation Incentive Program (SGIP): Residential Solar and Storage Equity Incentives and Residential Equity Resilience Incentives
Details:
- Administered by the California Public Utilities Commission (CPUC), provides incentives for distributed energy resources, primarily battery storage and some combined solar+battery storage systems.14
- Funded through a mix of ratepayer funds and the Greenhouse Gas Reduction Fund, which in turn is funded by the state’s cap-and-trade (now referred to as “cap-and invest”)15 program.
- Includes specific carveouts with higher incentive levels for the Residential Solar and Storage Equity Incentive and the Residential Equity Resilience Incentive.16
- Households qualify for the Residential Solar and Storage Equity incentive if they are:
- Single-family homeowners earning less than 80% of the Area Median Income (AMI), who have participated in previous equity-focused single-family solar programs, or who participate in a low-income energy rate program; or
- Apartment residents living in a disadvantaged community (as defined by the state’s environmental justice screening tool, CalEnviroScreen), 80% of building inhabitants earn under 60% of AMI, or the property already participated in previous equity-focused multifamily solar programs.
- The Residential Equity Resilience Incentive is set aside for households who:
- Live in a high-threat fire district or have experienced a minimum number of outages (including Public-Safety Power Shutoffs) and
- Are eligible for the equity budget, are reliant on electricity-powered medical equipment, have a serious illness, or rely on an electrically-powered pump to provide well water.17
- Equity-focused carve-outs are set at a level where, when paired with federal tax credits, they are expected to bring the upfront costs of the projects to $0.
- The SGIP Advanced Payment Program provides half of the funding up front so households do not have to cover any costs out of pocket until the project is complete and the full incentive is received.18
- Funding allocation for 2025 is $280 million for the Residential Solar and Storage Equity program.19
Challenges:
- Offers a list of installers, but they are not vetted by the CPUC.20
- Rebates were intended to be stacked with Inflation Reduction Act tax credits,21 which are being revoked and were not refundable, meaning that they were not available to those without a federal tax liability—and will no longer be available to anyone after the end of 2025.
- Funding levels are not sufficient to avoid waitlists for Equity customers.22
- Previous iterations of the SGIP equity-focused incentives were too low, leaving these budgets underutilized and prompting changes in the incentive levels.23
- Previous versions of SGIP did not include bridge funding, leaving customers to pay upfront costs before receiving the full incentive.
- Forrester, S., Barbose, G., O’Shaughnessy, E., and Darghouth, N. (2024). Residential Solar-Adopter Income and Demographic Trends: 2024 update. ↩︎
- See, for example, Wharton, R. (2025). Grab Your Home Energy Tax Credits While You Still Can. New York Times. ↩︎
- Simon, J. and Brady, J. (2025). EPA plans to end a program that makes solar power available to low-income Americans. NPR. ↩︎
- Forrester, S. P., Montañés, C. C., O’Shaughnessy, E., and Barbose, G. (2024). Modeling the potential effects of rooftop solar on household energy burden in the United States. Nature Communications, 15 (1), 4676. ↩︎
- California Public Utilities Commission. The Solar on Multifamily Affordable Housing (SOMAH) Program. Accessed: October 6, 2025. ↩︎
- Solar United Neighbors. (2023). Cleveland Low- to Moderate-Income (LMI) Solar Project Final Project. ↩︎
- Hansen, L. (2020). Residential Solar Incentive Program. ↩︎
- Hansen, L. (2020). Residential Solar Incentive Program. ↩︎
- Hansen, L. (2020). Residential Solar Incentive Program. ↩︎
- Hansen, L. (2020). Residential Solar Incentive Program. ↩︎
- Holt, E. G. and Sunter, D. A. (2024). Growth in energy justice: Exploring impacts of Residential Solar Incentive Program on rooftop solar adoption growth rates in Connecticut. Energy Research & Social Science, 109, 103410. ↩︎
- Connecticut Department of Energy and Environmental Protection, Public Utilities Regulatory Authority. Residential Renewable Energy Solutions Program. Accessed: October 6, 2025. ↩︎
- State of Connecticut, Public Utilities Regulatory Authority. (2024). Docket No. 23-08-02 Annual Residential Renewable Energy Solutions Program Review-Year 3. ↩︎
- California Public Utilities Commission. Participating in Self-Generation Incentive Program (SGIP). Accessed: September 25, 2025. ↩︎
- California Assembly. Climate change: market-based compliance mechanism: extension, AB 1207, 2025-2026 Regular Session. ↩︎
- There is also a Non-Residential Equity Budget targeted at local government, non-profit, Tribal government, and small businesses serving disadvantaged, Tribal, or low-income communities. See: Self-Generation Incentive Program. (2025). 2025 SGIP Handbook. ↩︎
- Self-Generation Incentive Program. (2025). 2025 SGIP Handbook. ↩︎
- California Public Utilities Commission. Participating in Self-Generation Incentive Program (SGIP). Accessed: September 25, 2025. ↩︎
- California Public Utilities Commission. Self-Generation Incentive Program (SGIP) Energy Storage Incentives for Low-Income Homes Available Starting May 20, 2025. Accessed: September 25, 2025.Offers a list of installers, but they are not vetted by the CPUC.
Rebates were intended to be stacked with Inflation Reduction Act tax credits, which are being revoked and were not refundable, meaning that they were not available to those without a federal tax liability—and will no longer be available to anyone after the end of 2025.
Funding levels are not sufficient to avoid waitlists for Equity customers.
Previous iterations of the SGIP equity-focused incentives were too low, leaving these budgets underutilized and prompting changes in the incentive levels.
Previous versions of SGIP did not include bridge funding, leaving customers to pay upfront costs before receiving the full incentive. ↩︎ - California Public Utilities Commission. Self-Generation Incentive Program (SGIP) Energy Storage Incentives for Low-Income Homes Available Starting May 20, 2025. Accessed: September 25, 2025. ↩︎
- California Public Utilities Commission. Participating in Self-Generation Incentive Program (SGIP). Accessed: September 25, 2025. ↩︎
- Self-Generation Incentive Program. Program Metrics. Accessed: October 6, 2025. ↩︎
- Verdant Associates. (2024). 2023 SGIP Program Performance and Process Evaluation (PPPE). Prepared for Pacific Gas and Electric, SGIP Working Group. ↩︎