Report: Low-Income Renters Face Barriers to Clean Energy

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A groundbreaking new report uncovers numerous barriers that prevent low-income and disadvantaged communities from receiving the benefits of energy efficiency and renewable energy programs. The report also highlights ways the state can improve access to clean energy programs so all Californians can cut energy waste and save money.

NRDC, other members of the Energy Efficiency for All Coalition, and numerous stakeholders contributed to the California Energy Commission’s report findings, which include 12 statewide policy recommendations. 

Who are California’s lower-income residents?

Low-income residents represent a significant portion of California’s population and face considerable housing affordability challenges:

  • One-third of California households make $32,000 or less for a family of two;
  • 54 percent of low-income households use a primary language other than English;
  • 70 percent of California’s low-income residents are renters, and of those, over two million households are in rental properties with two or more units; and
  • One-third of renters statewide spend more than half of their income on housing (far above the Federal standard for housing affordability).

These characteristics pose several unique challenges to installing clean energy upgrades and solar investments, not to mention the fact that low-income Californians tend to live in older homes and apartments that are decades out of date on energy efficiency and weatherization. As a result, they generally spend more of their income on energy bills as compared to average-income residents.

Further, there is less of an incentive for property owners to invest in energy-efficiency upgrades that tend to benefit renters who pay the utility bills. Affordable property owners, too, tend to have limited budgets with restricted opportunities to take on additional debt, further limiting their ability to undergo property improvements.  

What prevents access to clean energy programs?

The report finds that while smart policies and programs can help overcome these structural barriers, California’s plethora of programs are actually creating more barriers such as:

  • Fragmented programs and delivery challenges: While numerous programs exist for this sector, each has its own definition of low-income or disadvantaged community and requires different applications. These programs are not coordinated, and costs are put onto customers with slow rebate processing and incentives disbursed only following project completion.  
  • Insecure and inadequate funding: Many programs rely on limited and unpredictable funding cycles that do not lend themselves to combining with other offerings. Moreover, most program funding terms do not reflect the longer construction cycles necessary for multi-unit property upgrades.
  • Inconsistent goals and data limitations: Instead of focusing on goals like energy savings or greenhouse gas reduction, which in turn lower utility bills, programs primarily aim to minimize costs and do not account for co-benefits, such as improved family health, safety, comfort, and tenant retention. In addition, each program tracks different data, making it nearly impossible to compare the success of individual programs, to combine program offerings, or to use the data to employ innovative approaches to reaching residents.

How can the state make clean energy accessible to all?

The good news is the report outlines 12 feasible recommendations to maximize benefits for California’s lower-income and disadvantaged communities. The overarching message: align programs, offer technical assistance, and provide long-term, secure funding as well as enhanced financing.

Among other recommendations, the report advises:

  • The State should facilitate coordination of all state agencies administering energy, water, resilience, housing, and low-emission transportation infrastructure programs. To reach more customers, program eligibility requirements should be aligned, redundancies reduced, and administrative overhead mitigated.
  • The State should act to enable the economic advantages of community solar to be readily accessible to low-income and disadvantaged populations across California.
  • The Legislature should require collaboration among all program delivery agencies to establish common metrics and collect and use data systematically across programs to increase the performance of these programs in low-income and disadvantaged communities.
  • The State should establish regional one-stop-shops to provide technical assistance, targeted outreach, and funding services to enable owners and tenants of low-income housing across California to implement energy efficiency, clean energy, zero-emission and near-zero emission transportation infrastructure, and water-efficient upgrades in their buildings.
  • The Legislature should direct funding for all state programs to collaborate with trusted and qualified community-based organizations and local governments, who are well poised to communicate opportunities for customers, small businesses, and to expand local workforce opportunities.

Implementing these recommendations to streamline eligibility and compliance requirements, set common performance goals and metrics, and make it easier to combine funding across programs will result in wiser use of the funding, increase participation in existing programs, and yield greater greenhouse gas reductions, energy bill savings, and public health benefits for California residents.

What’s next?

Now that the initial barriers study is complete, the Energy Commission will work with other state agencies, community groups, interested stakeholders, and the Legislature to accelerate and transform access to clean energy investment in low income communities.

Among its next steps, the commission plans to hold implementation workshops in early 2017, develop timelines for carrying out solutions, and identify potential funding sources.

And the study has already sparked action in the Legislature. Assembly Bill 1088 was introduced by Assemblymember Susan Talamantes Eggman last week to improve the accessibility of California’s numerous programs for residents and owners in rental properties.

California now understands the extent to which program complexity and cost barriers are blocking the clean energy economy from reaching all of its residents. It’s time to adopt largescale and meaningful solutions to make sure everyone benefits from these programs. California’s communities and our climate cannot wait.  

About the Authors

Maria Stamas

Western Director, Energy Affordability

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