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Solar Finance and Ownership Options

Communities facing specific solar project development opportunities or proactively planning their solar development strategies will need to have a basic understanding of solar financing and ownership options. How solar is financed and owned has large implications on how the solar project impacts local economic benefits, risk, and capital needs. This fact sheet provides a brief introduction to these considerations for local officials and community constituents to familiarize them with how local benefits and risks contrast across the basic ownership structures available.

14 SOLAR ENERGY

Power now, pay later: the evolution of U.S. residential solar financing

Most U.S. residential rooftop solar customers finance their solar purchases through loans or by buying power from third-party owned systems. Prior research demonstrates how third-party ownership (TPO) models such as leases emerged in the early 2010s and accelerated solar adoption by low- and moderate-income households while driving market concentration in the installation industry. Since 2015, loans have emerged as a prevalent financing alternative, but the potential effects of loans on the customer base and industry remain understudied. Here, we fill that research gap by developing a methodology to identify loan-financed and third-party owned systems in a household-level solar adopter data set. The data suggest that loans accounted for increasing solar market shares from 2017 until reaching as high as 70% in 2022, but that the market has since shifted back to TPO. The data show that TPO adopters in our sample earned about 16%–18% less and loan recipients earned 3%–7% less, at the median, than customers who self-financed systems. These results reaffirm prior research showing that TPO has accelerated low- and moderate-income adoption and that loans have likewise expanded the customer base to a lesser extent. The results suggest that loan-financed systems entail around a 16%–26% price premium that is only partly explained by loan fees. Finally, the data suggest that the emergence of loans has likely reduced market concentration in the rooftop solar industry.

financing

Accessible Training and Shared Capitalization Platforms for Low-Income Solar Finance

From March 2020 through November 2023, the University of New Hampshire Carsey Center for Impact Finance and its partners worked to create accessible training programs and shared capitalization platforms to enable community finance institutions – such as credit unions, community banks, and Community Development Financial Institutions (“CDFI”s) – to expand their engagement in solar finance in low-income communities.

14 SOLAR ENERGY

Financing Solar + Storage for Small Businesses in Underserved Communities

Solar and solar and battery storage deployment is under-utilized by businesses in low-income and disadvantaged communities, in large part due to system costs and limited or complicated financial options. This document summarizes existing financial tools, discusses important financial barriers, and identifies emerging programs and opportunities to address these barriers.

battery

Community Planning for Solar: Toolkit Overview

UMass Clean Energy Extension (CEE) and its partners have designed the Community Planning for Solar Toolkit to help municipalities in Massachusetts and throughout the Northeast proactively plan for solar PV development in their communities. The tools and processes are designed with rural and suburban communities in mind, though some of the tools may also apply to urban settings. Community Planning for Solar empowers community residents and officials to take the lead in solar development by providing communities with the resources that can help them to: (1) Identify and prioritize locations in the community for solar development; (2) Evaluate various solar financing options and provide guidance on community benefits that best match community goals and needs; (3) Assess their community's unique resources, solar development options, goals, and preferences regarding solar development; (4)Develop a Community Solar Action Plan.

14 SOLAR ENERGY

Safely Exploring Solar: A Guide for Austin Energy Customers

It's easy to get overwhelmed as you start to explore your solar options. There is a wealth of information available out there, particularly online, and it can be hard to know who to trust. This informational guide has been adapted from Austin Energy's Solar Education Course and other national best practice resources, as of May 1, 2023. It will help you understand some of the key concepts and resources available to help you on your solar journey if you have a home in Austin Energy's service territory and are considering installing solar. This document includes: (1) Austin Energy Programs and Services Related to Solar; (2) Tips for Spotting a Solar Scam; (3) Things to Know When Designing Your System; (4) Key Considerations When Shopping for a Solar Contractor; and (5) Final Takeaways.

14 SOLAR ENERGY

Austin Solar Guide (Flyer)

This flyer was developed to guide homeowners on their solar journey and expand the benefits of solar to local residents. The guide is an overview of various energy and solar programs and services through the Austin Energy utility with tips for spotting scams, a summary of common terms when designing a solar system, and considerations when searching for a solar contractor.

14 SOLAR ENERGY

Meaningful Household Savings: Best Practices for Achieving Equitable Solar Development

The Meaningful Household Savings Community of Practice—and this report—focuses on electricity bill savings, other household savings, wealth-building opportunities, and other benefits such as tenant services provided to residents in master-metered buildings. For this report, the project team collected information about ways meaningful household savings have been defined; researched best practices to define, achieve, and quantify meaningful household savings; and identified strategies to scale the adoption and implementation of successful methods.

14 SOLAR ENERGY

Rooftop Solar in Lawrence, MA: Community Perspectives, Deceptive Practices, and Financing Options

This report was prepared as part of the U.S. Department of Energy's Communities Local Energy Action Program (Communities LEAP) pilot competitive technical assistance for the Lawrence Massachusetts Stakeholder Coalition (LSC) composed of The City of Lawrence, All In Energy, MassDevelopment, Mill City Community Investments, BlocPower and Groundwork Lawrence, and led by Browning the Green Space. The LSC identified rooftop solar photovoltaics as a top priority for this technical assistance opportunity. Lawrence faces high energy burden and electricity prices, thus rooftop solar can be a tool to help lower those costs. However, the coalition received feedback that some solar companies were using deceptive and unfair practices when marketing, selling, or financing solar energy, costing residents more money than utility rates and increasing the energy burden. This project sought to address rooftop solar community priorities through two pathways: 1. facilitating community engagement to understand community perspectives and experiences with rooftop solar development; and 2. conducting a financial cash-flow analysis highlighting the varying fiscal outcomes for rooftop solar adopters based off rooftop solar leasing, ownership, or buying electricity from the utility (National Grid).

14 SOLAR ENERGY

Inclusive Shared Solar Initiative (ISSI) (Final Technical Report)

Between 2020 and 2024, the Inclusive Shared Solar Initiative (ISSI) served as a forum for three states to navigate the design and development of LMI-accessible community solar projects. A collaboration between the National Association of State Energy Officials (NASEO) and National Energy Assistance Directors Association (NEADA), ISSI provided financial and technical assistance to teams of State Energy Offices and State LIHEAP Agencies in Minnesota, Wisconsin, and the District of Columbia. The key goals guiding ISSI were to develop four new community solar frameworks in three new states and create greater momentum among state governments, community solar developers, and the finance community in scaling and investing in community solar projects that are affordable and accessible to LIHEAP households. Ultimately, in addition to developing and launching four new shared solar projects serving LMI subscribers, the ISSI state partners pioneered community solar policy and program design strategies that increased protections for low-income consumers, reduced barriers to enrollment and project development, and fostered inter-program coordination.

14 SOLAR ENERGY

Public policy for solar heating and cooling

Recent analyses indicated that solar heating and cooling systems for residential buildings are nearly economically competitive with conventional fossil fuel or electric systems, the former having higher initial cost but a lower operating cost than the latter. The paper examines obstacles to the widespread acceptance and use of solar space conditioning systems and explores some general policies which could help to overcome them. The discussion covers such institutional barriers limiting the adoption of solar technologies as existing building codes, financing constraints, and organizational structure of the building industry. The potential impact of financial incentives is analyzed. It is noted that a tax incentive of 25% could speed the use of solar energy by 7 to 8 years and produce an 8% reduction in fossil fuel use by 1990. A preliminary incentive package which could be helpful in promoting solar energy both at federal and state levels is proposed, and the necessary incentive level is analysed.

Hirshberg, A. S.

Advancing Small Business Solar Equity: Final Technical Insights Report

The Advancing Small Business Solar Equity: Final Technical Insights Report represents the culmination of two years of work in participation with Round 3 of the National Renewable Energy Laboratory's Solar Energy Innovation Network (SEIN). SEIN Round 3, titled "Equitable Solar in Underserved Communities," supported eight underserved communities across the United States in "exploring new approaches to the equitable adoption of solar energy in residential and commercial-scale settings" and in "confronting the solar barriers they face and unlocking the solar benefits most relevant to their own contexts" (National Renewable Energy Laboratory 2023). This project was one of four selected to support solar access for commercial entities in underserved communities. The research conducted for this report was done within the Minnesota Twin Cities geographic context, but certain findings and the proposed Solar Hub Network model may be found applicable nationally. Community-based organizations that serve small businesses, chambers of commerce, community development finance institutions and other community lenders, municipal governments, solar incentive providers, solar industry professionals, and others may find elements of this report useful.

14 SOLAR ENERGY

Solar Energy Economics Revisited: The Promise and Challenge of Orbiting Reflectors for World Energy Supply

A system of orbiting, large-area, low mass density reflector satellites which provide nearly continuous solar energy to a world-distributed set of conversion sites is examined under the criteria for any potential new energy system: technical feasibility, significant and renewable energy impact, economic feasibility and social/political acceptability. Although many technical issues need further study, reasonable advances in space technology appear sufficient to implement the system. The enhanced insolation is shown to greatly improve the economic competitiveness of solar-electric generation to circa 1995 fossil/nuclear alternatives. The system is shown to have the potential for supplying a significant fraction of future domestic and world energy needs. Finally, the environmental and social issues, including a means for financing such a large shift to a world solar energy dependence, is addressed.

Billman, Kenneth W.

Assessing Photovoltaic Capacity Factor Variability Using Long-Term Satellite Derived Solar Resource Data Under Brazilian Climate

Accurate estimation of photovoltaic (PV) energy yield and its variability is essential for reducing financial risk and supporting reliable system planning for rapidly expanding PV markets. In Brazil, high solar adoption and increasing levels of distributed energy resources are beginning to introduce operational challenges such as curtailment and evolving grid requirements. Understanding how natural variability in solar resource propagates into PV system performance is therefore increasingly important for both project design and grid integration. Modern PV yield assessments commonly rely on multi-year meteorological datasets and probabilistic exceedance metrics (e.g., P50/P90) to quantify energy yield uncertainty for project financing. However, the implications of long-term solar resource variability for PV system design choices and high-adoption grid conditions remain less well characterized for rapidly expanding markets such as Brazil. In particular, understanding how weather-driven variability propagates into PV production distributions and capacity factor expectations is important for evaluating curtailment exposure, deployment strategies, and storage requirements in regions experiencing rapid growth of distributed and utility-scale PV. Seasonal and interannual variability in atmospheric conditions can produce substantial fluctuations in monthly PV energy production, which propagate into uncertainty in annual energy yield and capacity factor expectations. Characterizing this variability using long-term meteorological datasets allows probabilistic estimation of PV system performance and provides improved insight into the range of expected PV energy outcomes. This study explores the use of long-term satellite-derived meteorological data from the National Solar Radiation Database (NSRDB) to evaluate the variability of photovoltaic system performance across multiple locations in Brazil. Using a 27-year dataset (1998-2024), PV system simulations are performed to characterize the distribution of annual and seasonal capacity factors and energy yield outcomes, while propagating key sources of meteorological variability and model uncertainty through the PV modeling chain. The analysis also investigates the sensitivity of PV performance outcomes to key system design assumptions within the PV modeling chain, including tracking configuration and system sizing parameters. The resulting probabilistic performance characterization provides insight into how weather-driven variability influences PV production expectations and capacity factor distributions. These results provide a foundation for evaluating how weather-driven variability interacts with high PV adoption and potential storage or curtailment mitigation strategies.

14 SOLAR ENERGY

Ulysses: A Solar Odyssey

This is a film to film transfer of a Media Four production by Charles Finance about the Ulysses Mission to the Sun. The prelaunch production uses graphics, animation, and live footage to describe how Ulysses will use the gravity of Jupiter to lift it out of the ecliptic plane into polar orbit around the Sun.

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