Majority of rooftop users are middle-income — report
By: Maxine Joselow, E&E News reporter
Published: Thursday, April 20, 2017
How wealthy are residential solar customers? A new report has found an answer to this question, which often surfaces in debates about net metering and changes to electricity rates.
The report, which was conducted by market analysis firm GTM Research and California technology company PowerScout, relied on satellite imagery to identify households with solar panels in California, Massachusetts, New Jersey and New York. Together, these four states account for roughly two-thirds of all residential solar installations to date.
The report found that about 70 percent of households surveyed were middle-income, with annual earnings between $45,000 and $150,000. In comparison, about 65 percent of the general population in those four states is middle-income.
“This means that solar households in the middle-income bracket are overrepresented in the general population,” said Attila Toth, CEO of PowerScout and co-author of the report.
This marked the first time that a report has surveyed household-level data on the relationship between residential solar and household income. Previous studies have only surveyed ZIP-code-level data, which doesn’t account for potentially wide income variations within ZIP codes.
The report also found that although low-income households are underrepresented, a decent number have gone solar. About 13 percent of the households surveyed were low-income, with an annual income less than $45,000.
This finding is particularly relevant for states like Massachusetts, where solar advocates are warning that dialing down solar incentives could leave low-income consumers behind (Energywire, April 19).
While 13 percent may seem like a small slice of the pie, it represents about half a gigawatt of solar energy. This is halfway toward the target the Obama administration set in its Clean Energy Savings for All Americans Initiative, which aimed to bring 1 GW of new solar energy to low- and moderate-income solar households by 2020.
“If you took that 70 percent finding in a vacuum, it could be pretty misleading. The other thing we found that there’s actually a decent number of low-income households with solar,” said Shayle Kann, head of GTM Research and the other co-author of the report.
“That’s already halfway toward what Obama set as a target for the entire country toward the end of his tenure as president,” Kann said. “It’s hard to say the extent to which the initiative will continue under the Trump administration. But this suggests that target is achievable.”
The income breakdown of solar households could be explained by a number of factors, the report’s authors said. One explanation is that the possibility of saving money on a monthly utility bill might hold the most appeal for middle-income families, they said.
“I think this has to do with how solar has been sold in the U.S. in the past decade. It has been marketed as 10 to 15 percent savings on the monthly utility bill,” Toth said. “One could argue that value proposition resonates more with middle-income families.
“For low-income families, that could be a strong value proposition, but there could be other challenges, such as availability of financing or credit,” he said. “And for very high-income families, maybe that value proposition of saving $30 or $40 per month is not necessarily very strong.”
The report’s authors said they foresee the percentage of low- and middle-income solar households increasing as the cost of solar comes down. In the meantime, they said, community solar initiatives will continue to play an important role in making solar more accessible.
Unlike with residential solar, community solar doesn’t require people to install solar panels on the roof. This makes it a convenient option for renters and people who don’t own their own homes.
“A large portion of the U.S. population, particularly low-income people, tends to be renters,” Kann said. “So I do think that’s an important piece of the puzzle.”