2.1 Energy burden impacts of rooftop solar for the overall study population
After rooftop solar installation, energy bills for the entire sample of adopters shifted from a median of 3.3–1.4% of gross income (Fig. 1). However, taking off-bill loan and lease repayment into account muted the downward impact of rooftop solar on a household’s EB, while ongoing benefits such as renewable energy certificates for host-owned systems amplified savings. Altogether, adopters in our sample settled to a median EB of 2.7% (Fig. 1). From the perspective of customers, the median customer saw a 1.7 EB point reduction when looking at bill savings alone ($1,893 annually) versus a 0.5 point reduction ($600 annually) considering off-bill financial impacts. When off-bill impacts are excluded, the effect of solar installation on burden appears to be over three times as large as it actually is, illustrating the overestimation of rooftop solar EB reduction potential that may occur if off-bill impacts are disregarded.
Each customer was assumed to finance its system through either a loan or lease. The 56% of customers with host-owned (loan financed) systems saw a median burden of 3.0%, absent solar, decrease to 2.5% with individuals seeing a median 0.43 EB point drop ($558 annually). Those with third-party owned (leased) systems saw median burdens fall from 3.7–3.0% with individuals on average seeing a 0.56 point reduction ($635 annually) (Fig. 1). Overall, loan-financed and leased systems exhibit many financial similarities, and we merge the two separate groups throughout the analysis to best compare impacts and understand overall EB reduction of rooftop solar across all customers in the sample.
There were a number of households whose off-bill costs exceeded their bill savings in the analysis period of 2021, and thus their EB increased as a result of solar (Fig. 2). There are several reasons why this may be the case. First, since this was only a snapshot of 2021 impacts, it does not inform whether a system is economical over the course of its lifespan and an adopter may initially pay a premium to hedge against future rate increases. Indeed, Fig. SI.2 shows a positive net present value for 2021 adopters, regardless of cash, loan, or lease payment. Second, a number of our financial assumptions related to the loan and lease terms are based on state averages at the year of adoption. Third, an adopter may also choose solar for other reasons apart from economics as well.
We explore this topic further in SI 7 “Linear regression to explore instances where solar increased energy burden” and find that a low EB absent solar, low electricity prices, larger solar system sizes, more expensive per-Watt solar costs, smaller home square footage, and higher income all were linked to lower EB reduction (in that order of magnitude). We also find that homes using fuel oil or propane were more likely to see low levels of savings, as were homes located in the South.
2.2 Impacts by income group
Across the 500k households in the study sample, 23% were low-income (≤ 80% of area median income (AMI)), 21% were moderate-income (80–120% AMI), and 57% were non-LMI (> 120% AMI). Without solar, 34% of these low-income households would have experienced a severe EB over 10%, while an additional 32% would have experienced a high EB of 6–10%. By comparison, the corresponding numbers for moderate-income households experienced were 2.6% and 19%. and those for non-LMI households were 0.25% and 2.7% (Fig. 3). With solar, the number of low-income households experiencing severe and high EB experienced a percentage point drop of 7.8 and 4.7, respectively while moderate-income households saw corresponding point drops of 0.3 and 7.8, respectively. Overall, solar was able to reduce EB to manageable levels below 6% for 33% of the subset of LMI adopters experiencing severe or high burden.
Rooftop solar reduced median low-income EB from 7.7–6.4% and from 4.1–3.4% for moderate-income adopters (Fig. 4). Post-adoption EB above 6% may be linked with ongoing difficulty to pay for energy, indicating that solar alone may not be able to fully alleviate high EB for the majority of low-income adopters and a smaller group of moderate-income adopters. Consequently, households with post-adoption burdens exceeding 6% may require additional measures (e.g., energy efficiency) or incentives (e.g., low-income solar programs) to reduce all LMI households’ EB below 6%. Figure 4 further illustrates the importance of incorporating off-bill impacts into EB, particularly for lower income groups. For example, rooftop solar reduced the share of LMI households experiencing high or severe EB from 45–35%, however, solely using bill impacts would erroneously imply a reduction to just 16% of low-income households.
2.3 Energy burden impacts in 2021 based on year of adoption
This analysis looks at EB impacts for the year 2021, but incorporates empirical cost and incentive information specific to the year of adoption, as well as loan and lease terms from each respective year/state combination. Over time, EB absent solar has increased slightly across the entire sample from 2.9% in 2013 to 3.2% in 2021, consistent with the fact that incomes of adopters have been slowly migrating downwards.28 While the 2021 income estimates for low-income 2021 adopters are 6% less than those of 2013 adopters, EB absent solar is 8% higher. Thus, while solar has been increasingly reaching lower income households, it has been comparatively less successful at increasing adoption among low-income households with higher EB (Fig. 5). This may be due to the broadening of the solar market into lower income regions, among other factors.28
2.4 Regional and state differences
Across our sample, the impacts of solar adoption on household EB vary by region. Location-specific impacts include differences in income; solar incentives, cost, and resource; and energy costs impacted by prevalent heating fuel types and energy prices (Table 2). SI 7 “Linear regression to explore instances where solar increased energy burden” finds that, controlling for many of these variables still show regional differences, which could be due to additional factors such as heating degree days, cooling degree days, housing stock, or energy usage behavior.
Table 2
Descriptive statistics of solar adopters by region
| Med. AMI [%] | Med. Inc. [$1,000] | Med. PV Size [kW] | Med. PV Cost [$/W] | TPO [%] | Fuel oil or propane heat [%] | Med. Electricity Price [$/kWh] | Med. 2021 Energy Costs without PV [$] | Med. EB without PV [%] | Med. EB with PV [%] |
Midwest | 136% | 120 | 6.6 | 5.05 | 0% | 1% | $0.13 | 3250 | 2.8% | 2.5% |
Northeast | 123% | 117 | 7.2 | 4.29 | 64% | 30% | $0.20 | 4508 | 4.1% | 3.5% |
South | 146% | 98 | 6.9 | 4.41 | 0% | 0% | $0.08 | 2138 | 2.1% | 2.6% |
West | 137% | 121 | 5.8 | 4.64 | 38% | 1% | $0.28 | 3598 | 3.1% | 2.5% |
Figure 6 shows that rooftop solar on average decreases EB across income groups in the Midwest, Northeast, and West. Notably, for low-income adopters, solar was able to push the majority of adopters in the West from a high energy burden (7.3% median) to just below the 6% level. However, across all income groups, median EB increases in the South. This is consistent with a study based in Florida37 and is explored further in SI 7 “Linear regression to explore instances where solar increased energy burden”. We hypothesize that this is largely due to the relatively low cost of electricity which attenuates the bill reduction potential of rooftop solar. In the Northeast, EB demonstrated higher variation, likely due to the prevalence of propane and fuel oil heating (Table 2), which tend to be costlier than electricity and natural gas and cannot be offset by solar.
2.5 Limitations of rooftop solar for energy burden reduction
Solar alone can only impact the volumetric cost of electricity. As such, in utility territories with high fixed costs or minimum bills, solar will not fully offset electricity bills. Additionally, rooftop solar alone cannot offset energy costs associated with non-electric loads such as natural gas, propane, or fuel oil heating. Figure 7 illustrates that the highest EB across income groups are for households with either propane or fuel oil heating. Moreover, almost all households in the small group of non-LMI solar households whose EB remains above 6% have propane or fuel oil heating. Moderate-income solar households with propane heating also maintain a median EB just above 6% and of all low-income adopters with propane and fuel oil heating, 88% and 80%, respectively, maintain an EB greater than 6%.
Since rooftop solar adoption can only reduce EB a limited amount for those with non-electric heating, strategies such as weatherization may be necessary in order to reduce heating energy requirements regardless of fuel type. Alternatively, the electrification of large non-electric loads such as heating would allow for solar to offset those costs, albeit with a larger system. This is an area for further exploration.