Is 2016 the Year Solar Reaches Low-Income Renters?

Looking back on 2015, several game changing events occurred or were put in play that will enhance solar access and improve the economics of solar investments for affordable housing organizations for years to come.

To recap, a big highlight of 2015 was the enactment of the AB 693. AB 693 was introduced by Majority Caucus Leader Susan Eggman (Assembly District 13) and supported by a diverse coalition of environmental justice, solar, and affordable housing advocates.

The new Multifamily Affordable Housing Solar Roof program created by this bill was developed specifically to address split-incentive barriers that limit opportunities to scaling solar installations to serve low-income renters. The Affordable Multifamily Solar Roofs program – the largest solar program in the country targeted at low-income multifamily rental markets – will make available up to $1 billion over 10 years. We expect that this program will be able to reach over 200,000 low-income rental units in affordable multifamily rental properties throughout the State.  An important feature of this program is its emphasis on solar installations that serve low-income renters. By providing a deeper level of incentives for PV systems, the Affordable Multifamily Solar Roofs program will minimize and possibly eliminate the need for property owners to cross subsidize solar installations that serve low-income tenants. This is a giant step toward securing greater housing affordability for residents and safeguarding the financial stability of affordable multifamily rental properties. Ensuring that the implementation AB 693 meets its legislative mandates is a top priority for the California Housing Partnership and our allies working for the interests of low-income renters in California.

Equally important was Congress’ action in December to extend the Federal Investment Tax Credits (ITC) for renewable energy investments. The ITC extension continues the 30% tax credit on solar costs through 2019. The ITC can be combined with Low Income Housing Tax Credits (LIHTC) to offset the costs of solar installations on new construction and rehabilitation projects. For 9% LIHTC properties the combined solar and housing tax credits and benefits can fully cover solar costs.  Moreover, since solar installations generate operational cost savings and can also reduce tenant utility costs, scaled solar installations on tax credit transactions can actually increase funding sources relative to uses and make it possible to provide greater benefits to low-income households. All LIHTC transactions in California should leverage this opportunity.

There are also active proceedings before the California Public Utilities Commission (CPUC) tasked with reviewing and setting a value of electricity produced by solar as well as fees for solar installation and use. These matters direct affect the economics of installing solar PV. On January 28 the CPUC made an important decision on the adoption of successor rules to Net Energy Metering (NEM). The resetting of Net Energy Metering (NEM) rules is an inevitable step to resolving the politics over solar cost sharing and removing net meter caps to allow for the continued growth of residential solar installations. Resolution is particularly important to expanding solar opportunities in low-income markets that have been largely underserved in California. For now, the January 28 CPUC decision will continue current NEM rules and require solar customers to use Time of Use rates as a condition of using NEM. Importantly, the CPUC declined to impose demand charges, grid access charges, or other fees on NEM customers. Customers with solar PV arrays will also be able to count on the NEM tariffs adopted for 20 years from the year of interconnection. The NEM tariffs adopted will thus provide a certain and predictable method to value solar generation, a reasonable payback period for solar investments, and positive financial returns for property owners. This proceeding is still active and more changes are expected. CHPC will continue to be diligent in participating in these proceeding to ensure the future tariffs and fees allow housing organizations to recover the costs of solar installations within reasonable payback periods.

For all these reasons, the prospects for solar PV in affordable multifamily rental housing markets in California look very good in 2016. Solar companies like Helio Micro Utility see “unprecedented demand” for solar PV from developers and financers of moderately scaled low-income housing and community solar systems.[1] Moreover, with the implementation of AB 693, 2017 looks even better for California’s affordable housing organizations.

In sum, we are in a near perfect solar storm. Over the next 3-5 years the resources and policies we have to work with provide a rare opportunity to fundamentally reset the carbon footprint of the state’s affordable housing assets, improve housing affordability, and make a significant contribution to reducing green house gas emissions.

The time is right to take another look at solar economics. If you need assistance navigating California’s solar landscape, please send me an email at or give me a call at 775-771-5550.

Wayne Square

 – Wayne Waite, Policy Director


[1] See