SELC urges EPA to boost opportunities for solar and efficiency investments in low-income communities
SELC is urging the Environmental Protection Agency to strengthen the positive impact on low-income families from the Clean Energy Incentive Program of the Clean Power Plan. With EPA refining the program, SELC weighed in recently to highlight how the CEIP could more effectively help these households benefit from the growth in energy efficiency and renewable power.
Energy efficiency is a particularly pressing need in the Southeast, where low income families spend a higher percentage of household income on energy costs than their peers, allocating nearly three times the average for non-low-income households nationwide—9.6 percent compared to 3.2 percent. For families below the poverty line, those energy burdens are even greater; upwards of 30 to 40 percent of the annual income for these families in our region is spent on home energy needs. Contributing to these energy burdens are the prevalence of mobile homes. The Southeast is home to over 56 percent of the manufactured mobile homes in the U.S., which use nearly twice the energy per square foot as single-family homes.
Recognizing these types of challenges play out across the country, EPA has offered the CEIP as an optional tool within the Clean Power Plan that encourages early investments in renewables and energy efficiency, with extra incentives for investments in low-income communities. The agency adopted many suggestions submitted earlier this year from SELC and other advocates to improve the program. Many of those improvements will simplify compliance and boost participation. Of note is EPA’s decision to increase flexibility by allowing solar-energy projects that have direct benefits in low-income communities to qualify for extra credits offered by the EPA. Another way for the EPA to give states the flexibility they need to make the most cost-effective, best use of this early action program is to allow energy efficiency measures outside of low-income communities to earn regular credits from the Renewable Energy reserve, which is currently limited to solar, wind, hydro, and geothermal projects.
As currently outlined, however, the latest Program Design Rules for the CEIP risk falling short of EPA’s laudable goals of boosting low-income energy efficiency, solar, and other clean renewables.
“Given the higher rates of poverty in the Southeast, it’s important that we be able to meet Clean Power Plan goals through energy efficiency programs and solar installations that directly benefit lower income communities,” said SELC Senior Attorney David Neal. “Low-income customers are too often forced to spend large amounts of their limited income on home energy bills, so energy efficiency programs offer families the greatest savings, while also creating good local jobs.”
SELC is asking the EPA to address some of these fundamental design flaws with the CEIP. Under the current version, the program would not provide enough incentives to spur new investments in needed energy efficiency in low-income communities. While there is uncertainty about the economic value of the incentives that the EPA is offering, current estimates suggest the value will be too low to justify new spending on low-income efficiency or solar projects. Second, the incentives that are provided, in the form of tradable carbon allowances or emissions rate credits, are not available until some years after projects would be completed. EPA needs to bridge the gap between the initiation of low-income projects and the provision of incentives.
“If the EPA can make further improvements to the incentives offered under the CEIP, it could spur new investments in solar and energy efficiency that will help families who struggle to make ends meet,” Neal said. “Those early investments in our most vulnerable communities will make later compliance with the Clean Power Plan easier, a win-win for all involved.”