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Why solar is leapfrogging Black & Brown communities

Updated: Jul 6, 2020

WHY SOLAR IS LEAPFROGGING BLACK & BROWN COMMUNITIES

FROM AN EQUITY PERSPECTIVE

[BASED ON THE RULE OF THUMB THAT MOST PEOPLE HIRE

PEOPLE WHO LOOK LIKE THEM & DO THINGS THAT ARE BEST FOR THEMSELVES]

JULY 8, 2020, IPA PRESENTATION

1. Insufficient analysis of the capacity of Black & Brown community capability to implement legislative policy on the ground. Therefore legislative policy is pursued with the assumption that if it looks good for Black & Brown communities to politicians on paper, Black & Brown communities should be able implement it, if it is approved.

2. Fallacy Example: Extreme effort has been put into the passage of Community Solar legislation as if somehow Black & Brown communities will implement their share of these projects. The reality of the REC allocation for well over 100 Community Solar Projects in 2020 revealed that in an environment in which there was a 600%+ oversubscription of these projects, less than 1% of the projects were awarded for Black & Brown communities.

3. Fallacy Rational: Significant financial capital & technical expertise is needed to implement Community Solar Projects. They cost a typical investment of $30K-$50K to make a project application to be eligible for REC awards for the projects. And a SWAT analysis would have revealed that that kind of expertise and financial capital is not typically readily available in Black & Brown communities.

4. Fallacy Solution: If Community Solar is viewed by the policy formulators as a significant tool for Black & Brown communities to immerse themselves in the solar marketplace, then policy formulators need to provide the financial capital & technical expertise necessary to help Black & Brown communities to begin to implement their share of these projects.

5. Fallacy Result: This approach seems to say that Black & Brown communities simply should follow the approach that white communities use to get their solar needs fulfilled. That is impractical and virtually impossible because institutional racism makes it extremely difficult for Black & Brown communities to access the financial capital necessary to accomplish solar implementation. And since Black & Brown median family wealth is only approximately 10% of white median family wealth, Black & Brown community implementation success probabilities are extremely lower than white community implementation success probabilities, which typically show a 20% success probability for business startups in the first 5 years. Therefore there are only a very limited number of Black & Brown solar design/build subcontractors in the field today. And there are no Black & Brown solar design/build general contractors in the field today, with the exception that 1 is in the process of being certified to enter the field soon. But that is a horrendous statistic, because the greatest impact on the number of Black and Brown subcontractors and employees in the field is directionally proportional to the number of Black & Brown solar general contractors that are in the field.

6. Insufficient analysis of the impact of policy change impact upon implementers seems to be occurring relative to implementing proven solar subsidized products that are helpful to Black & Brown communities. Therefore policy changes are being implemented that will likely harm Black & Brown community residents that need the subsidized solar products the most.

7. Fallacy Example: When Illinois Solar For All (IFSA) was initially offered in the field, the subsidized solar product had to provide solar customers in EJ communities with a 50% discount on the expense rate of the solar energy consumed by the customer. And that proved very beneficial to those who can least afford energy expenses in EJ communities. But as the year progressed, the discount was raised to 65% seemingly based on the rational that if a 50% discount was good, a 65% discount would be better. However the impact of this upon the profit margins of the solar design/build companies that provide the solar for the customers seemed to not have been sufficiently analyzed. That is because the profit margin was already low with the 50% discount. But with the 65% discount, the profit margin had passed the tipping point; so that it is no longer profitable to provide small solar projects at the low-end of the solar marketplace, which is where the EJ community customers are, who need the IFSA products the most. Therefore solar providers will likely begin to abandon that smaller end of the IFSA market to offer the product to customers with larger facilities in EJ communities, where it is still profitable to provide the IFSA service. But the EJ customers with the larger facilities typically have greater affordability capacity than the customers in those communities with smaller facilities. And those customers with the smaller facilities are the very customers who needed the IFSA subsidies the most.

8. Fallacy Rational: It is true that a 65% discount sounds better that a 50% discount, which is why the IFSA discount was increased to 65%. However the real marketplace reality of the cut needed to be sufficiently analyzed. This is because for-profit companies can only operate in areas where their profit-margins are healthy enough to keep them in business. Therefore if the discount that is being offered no longer makes it profitable for solar providers to operate at the lower end of the EJ community market, where the discount is needed the most, the increased discount then is counter-productive to the stated goals of the IFSA product.

9. Fallacy Solution: If the goal of the IFSA product is to target the product discount toward the IFSA customers in the EJ communities that need it the most, the discount probably needs to be reduced back to 50%.

10. No focus upon establishing MBE Solar General Contractors. Instead the focus is upon tinkering around the edges, by assisting the establishment of MBE solar subcontractors through the 15 CEJA Hubs that will be established around the state. In the beginning and probably for the lengthy near term, most of the subcontractors will have a single employee, which will consist of themselves. Whereas MBE Solar General Contractors, if given adequate assistance to establish & sustain them, will most minority subcontractors and minority employees in the solar marketplace.

11. No focus upon implementation. With the only focus of the organizing & environmental communities being upon policy formulation, these communities are missing out on an understanding of what works best on the ground in terms of implementation. And no matter how good policy formulation is, the greatest impact comes through implementation. Therefore without greater focus upon implementation, our efforts by definition are focused upon less than optimum impact, instead of optimum impact

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