Using Energy Efficiency to Maximize Low-Income Solar at the EPA

$7 billion Greenhouse Gas Reduction Fund for equitable solar goes further with efficiency.

Solar installation at Monsenor Romano apartments in Washington, D.C.


National Housing Trust

In February, the U.S. Environmental Protection Agency (EPA) announced that the Greenhouse Gas Reduction Fund’s (GGRF) $7 billion Zero-Emissions Technologies Program (ZET) competition would focus on residential and community solar, associated storage technologies, and related upgrades. These funds will flow through states, municipalities, tribal governments, and eligible nonprofit recipients, and 100 percent of the funds will be devoted to low-income and disadvantaged communities.

The ZET portion of the GGRF is a critical component in this program’s potential to catalyze a more equitable clean energy transition. And how EPA defines “related upgrades” in the ZET competition will significantly determine whether the GGRF lives up to this potential.

The following are recommendations to ensure that the ZET program reduces pollution and energy costs in all communities across the country, allowing millions to benefit from this historic investment.

Specifically, EPA should include the flexibility for GGRF ZET recipients to support solar and storage in combination with energy efficiency. Classifying “related upgrades” as inclusive of energy efficiency will maximize the program’s ability to move the needle in reducing greenhouse gas (GHG) emissions and deliver significant and tangible benefits to communities and households.

Providing flexibility by including energy efficiency as qualified “related upgrades” will allow for more holistic and equitable investments. This flexibility will empower states, local governments, and tribes to maximize reductions in energy costs and energy burdens, improve health, stimulate job growth, and improve program accessibility, in addition to maximizing pollution reduction in Black, brown, rural, low-income, rental, and climate-vulnerable communities that need it the most.

In addition, EPA should enable programs that target energy efficiency upgrades for low-income households to readily tap into the ZET so that solar can become an additional component that supplements existing energy efficiency and electrification projects. Since originating new projects that successfully serve low-income households is a critical element of successful program design, these energy efficiency programs bring enormous value to the EPA's goals of reaching target populations.

Why pair solar with energy efficiency?

There are a myriad of benefits related to energy efficiency. Efficiency is still the cheapest resource we have, so allowing applicants to include efficiency improvements will stretch program dollars and enable additional households access to solar power. Long-term affordability of housing is increased by reducing energy and operating costs; since energy efficiency produces the largest energy cost savings in utility bills, it can offset potential rent increases for renters. Solar provides free electricity generation, but a customer interacts with appliances and home construction, not electrons. What good is free solar-generated electricity when you have an air conditioner that doesn’t work or a leaky envelope or inefficient/insufficient lighting? Residents living in homes or apartments with better ventilation, climate control, lighting, and environmental quality also have measurably better physical and mental health.

Energy-efficient home repairs and other repairs and upgrades some homes may require to safely install solar address starting line disparities to right historical wrongs and ensure that no community is left behind in the clean energy transition. Importantly, efficiency is also critical to successfully deploying solar technologies. A report by Green & Healthy Homes Initiatives details that without integrating these starting line measures, historically underserved communities will lag behind in solar uptake. Integrated investments also provide public benefits like new clean energy jobs and reduced pollution. 

Building a flexible program that includes energy efficiency improvements, together with solar and storage, is considered good program design by the U.S. Department of Energy’s own standards. This flexible approach would make it easier for residents, building owners, and small businesses to more effectively direct limited time and resources to comprehensive building improvements. Such investments would reduce household peak consumption that net metering alone does not address, avoiding the need for dirty peaker plants and demand charges in rural and environmental justice areas.

Further, in small or rural towns in the United States where residential or community solar may be less accessible due to market or regulatory barriers, including efficiency simultaneously with solar would reduce up-front costs associated with solar installation. For example, St. Peter Apartments in New Orleans paired efficiency measures with solar and batteries to provide occupants with low energy bills and the ability to keep the lights on during blackouts. Twenty-nine of the 50 units in this building are set aside for occupants earning 60 percent of the area median income or less, providing access to both clean energy and efficient, healthy homes. This approach has the potential to produce health, comfort, and bill savings for low-income single-family homes as well.

Taken together, energy efficiency paired with solar and storage provides the opportunity to produce the greatest reductions in energy burden and GHG emissions, as well as enhance the non-energy benefits of access to solar. EPA should consider the evidence and real-life experiences to create a flexible, well-designed ZET program that sets up communities for lower costs and fewer emissions, saving people on energy bills and delivering cleaner air for them to breathe. 

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