This Startup Wants to Bring Solar Power to Low-Income Neighborhoods

Liz Biscevic 

Serious fans of renewable energy already know the economic case for installing solar panels on your roof: saving anywhere from $50 to $150 per month on bills, increasing your home value, tax incentives—and that’s not including the environmental benefits. For the affluent family, solar panels are becoming an obvious choice, but for the 40 million Americans living below the poverty line, despite the long-term financial benefits, solar panels are a luxury they can’t afford. Enter Resonant Energy: a new solar company that launched in August 2016 with a “Solar Access Program” to expand solar energy's upsides to everyone, regardless of “income, race, or creed.” They’re currently developing shared solar arrays in communities around Massachusetts and New York.

Resonant Energy’s goal isn’t only to change the dialogue around who solar is for, but also who it’s by. The company endeavors to create a staff of at least 50 percent women and people of color who live within the communities Resonant serves. That's an attractive opportunity, considering solar is one of the fastest growing job sectors in America, with anticipated growth of over 100 percent in the next nine years. 

We caught up with Isaac Baker, the co-founder and president of Resonant Energy, to discuss how the business plan relies on communities to survive the “solarcoaster” that is the renewable energy market. 

How did Resonant Energy begin?

I met my partner Ben Underwood in late 2014. We had both just graduated with undergraduate degrees up in Vermont and had been thinking about doing work right at the intersection of climate change and social change. We were initially interested in biogas systems, turning food waste and animal waste into clean energy, which was this big growing technology of interest in Vermont at the time because there are a lot of farms out there. 

But in about six months we learned that [biogas] technology was a little bit before its time, so we went to this place called the Co-op Power, which was working on developing shared solar arrays that could be accessible to everyone regardless of their income, credit score, race, or creed. We did that for about a year together and founded “the Future of Solar” division at Co-op Power, and through that process we got connected with a lot of resources. That was our real incubation. 

During SOCAP17 [an industry conference for social enterprises and impact investors], Steph Spiers of Solstice Initiative—a nonprofit that works on community solar projects—said that people who need solar the most are least likely to use it. Can you speak to that?

Limited-resource communities—folks that have the lowest incomes—are paying the highest percentage of their monthly salary towards electricity. So, for your average high-income household, they're never going to think about their electric bill. They'll put it on autopay and it’s just going to get paid and they aren't going to worry too much about it. For low-income households, energy can be 10-15 percent of the monthly costs that they have, which can be second to rent as their largest monthly expense. In thinking about who needs clean energy based on the savings that can come from implementing it, it's most meaningful for limited-resource communities. But because there are educational barriers and financing barriers, they are also the least able to adopt clean energy right now. 

Would you say that's purely a cost thing? 

Under current market conditions for the average home, the average solar contracts will cost $20,000 to $30,000 dollars to install. It can be financed, but in order to take out a loan for that you need around a 680 credit score or higher, and you have to want to take out a pretty burdensome loan. So, [many] folks who are limited-income are not able to access rooftop solar because of that underwriting criteria.  

You say on your site that solar energy can "turn a current source of injustice into a new power base for communities that need it the most." Can you talk to me about that injustice? 

The communities that have had coal plants sited in their communities, that are located near fossil fuel infrastructure and all kinds of dirty energy sources, these are the communities that have borne the brunt of our previous energy systems. And [now], just as we're creating the solutions to create a cleaner more vibrant world that's going to power itself in the future, these are the communities that are being left in the dark. 

Resonant Energy’s Solar Access Program is called the “first inclusive financing model” for installing a solar rooftop. How does the program work?

Unlike many rooftop solar products and solutions, ours isn't designed for a single family home—it’s focused on limited resource neighborhoods. That means it can work for the single family-home, but it also works for the retiree on a fixed income, the church down the block, and the small local business. We wanted to create a solar financing solution that will work for all of these equally. 

In Boston, where we've been for the last year, we sign with project hosts who agree to host the panels on their roofs for 20 years and in exchange they get 15 percent of the [electricity] value produced by the array right to their electric bill, and they pay nothing at any time [for hosting the panels]. So they're basically making their roof available and they get the equivalent of a few hundred dollars a year. So that's our goal: to cut people’s electric bill and have them pay nothing at any time. Then, we make that same offer available on a smaller scale for nonprofits and small businesses that can host larger arrays of solar panels. 

Then how do you make money? What’s the business model? 

The typical way solar financing works is that you have strict underwriting criteria—like a 680 credit score. A company puts solar on [the customer’s] roof and then charges them at a discount for the next 20 years. So, if you give them 100 dollars of value in a given month, you're going to charge them 85 dollars a month for the next 20 years to help recover the expenses. The way we change that is that we give away 15% of the output to each household and the rest of the 85% of that output we aggregate and we sell the extra power to a longterm, credit-worthy institution like a local affordable housing development or a municipality or a big business, so that we have a longterm revenue stream that can help pay off the assistance we give to limited income communities. 

And solar is cheaper than regular electricity.

That's right. Everybody saves in our model. A big electric user who buys the extra power off the roof saves money on their electric bill and the home or building owner that hosts the array is saving 20 to 25 percent off their electric bills. 

How’d your partnerships with Massachusetts faith communities start?

One of our founding members had a house that was great for solar and he went to church at this big old beautiful building called the Second Church in Dorchester that also had this amazing roof for solar. For various reason, neither his home nor the church was able to access financing to put up solar through the traditional models. As we were developing our program, we worked closely with our founding member to look at the problems we had to solve and figure out solutions—like how we can take his church, which was too small to finance on its own, and make it go solar. During our second meeting, the pastor joined us and said ‘Well if the church is too small, I have a list of 500 churches here in Boston—many of which I work with and I know the pastors—what if we just do this big campaign and get all of the churches, regardless of their faith, and do it all together to bring the cost down?’ So we worked in the community to run an interfaith campaign to allow the churches to go solar.

The pastors all worked together over a year to do it. And that's where the Solar Access Program began, through the process of working with these faith leaders and thinking about how we can do more when we bring a program together that leverages the entire community. 

Is this something other energy companies—like Solar City—could replicate? Is there a reason why more companies aren't doing this?

There isn’t anything that we're doing that others couldn’t do, technically. We're using the same existing laws and incentives, but what we're doing is very hard to do. For most companies, the reason they aren't doing it is because if you're building solar projects it's much easier to target affluent, single-family, unoccupied homes in the suburbs and persuade the [owners] to pay to put solar on their roof. So right now, the market will trend towards those communities first and foremost—like selling their product to the highest bidder. 

At this point we aren't getting rich off this project. But we have proven a model that can scale, and there's a good business case for it—like billions of dollars of solar [energy] that will need those rooftops in the next 20 to 30 years. 

What are the biggest challenges in expanding these types of solar initiatives? Is it mostly cost and time?

Yeah, I mean for any industry driven by state-level policies that change every few months, that alone is what we call "the solarcoaster." There's a changing landscape of incentives and regulations and an ongoing battle with utilities about what the value of solar energy will even be. I'd say [those] are the two biggest challenges. 

So, how long until everyone has a solar roof or at least some solar electricity? 

That's a hard question. There are some communities in Massachusetts that have already massively adopted solar. So we have some small towns that are net producing more electricity that they're using. Then there are the early adopters in affluent communities who are proving that it's possible and who want to be on the forefront of this transition. But in terms of everyone else, rooftop solar—though it's becoming popular—is just hitting its tipping point of becoming the expectation in some communities. There are communities now that have had so many installations that, if you have a good roof for solar, it's kind of weird if you don't get one. That, to me, is the social change that's going to drive this forward more than anything else. But I think we've got a long way to go. We've got thousands and thousands of homes to do installations on and it's going to take 20 to 30 years to do. But the work is definitely accelerating.

What's next for Resonant Energy?

In terms of expanding in the next coming years, our goal is expanding in a way that empowers the communities and organizations that are already serving the communities we want to partner with. So, when we think about going to Washington D.C. or New York or wherever, instead of just writing a business plan, hiring folks, and sending them in, we first go in and spend a few months working with local nonprofit partners and local co-ops and other local folks that we want to see leading the charge towards clean energy, so that we can expand by working with folks on the ground in each new community that we serve.