Community solar programs are designed to allow households that don’t own their homes or have access to rooftop solar to benefit from solar energy. However, renters who rely on federal assistance have faced barriers to accessing those benefits because the savings from a community solar subscription can impact monthly rent payments or the utility allowance these households receive to cover monthly energy costs.
In July 2022, the U.S. Department of Housing and Urban Development (HUD) issued guidance (PDF) that enables residents of HUD-assisted housing to access cost-saving community solar subscriptions without inducing a rent increase or utility allowance adjustment. The guidance is limited to certain community solar models. For states with different program models, HUD can issue state specific guidance upon request. This is an important step in ensuring that the 4.5 million families who live in affordable housing can benefit from low-cost, renewable energy.
If you are a state government official interested in receiving guidance from HUD that would enable affordable housing residents in your state to benefit from community solar subscriptions, email firstname.lastname@example.org for more information.
Learn more about how community solar and utility allowances work below.
What is a community solar program and how does it work?
The U.S. Department of Energy (DOE) defines community solar as any solar project or purchasing program, within a geographic area, in which the benefits of a solar project flow to multiple customers such as individuals, businesses, nonprofits, and other groups. In most cases, customers are benefitting from energy generated by solar panels at an off-site array.
Community solar customers can either buy or lease a portion of the solar panels in the array, and they typically receive an electric bill credit for electricity generated by their share of the community solar system—similar to someone who has rooftop panels installed on their home. Community solar business models vary depending on where a subscriber lives. Learn more about how community solar works.
What is a utility allowance?
A utility allowance is a predetermined amount of money needed to cover the utility costs of a resident of subsidized housing. HUD administers several multifamily housing assistance programs, all of which vary in terms of how the subsidies flow to tenants and property owners and in the methodology for calculating utility allowances. Learn more about utility allowances on HUD’s website.
How does community solar affect utility allowances and rent?
The relationship between rent, income, and utility allowance in affordable rental housing is important in the context of understanding the impact of community solar programs. When utility costs are included in rent for HUD-assisted households, the household’s total monthly payment includes the rent for their apartment and the utility allowance. In general, that amount is capped at 30% of the household income.
When HUD-assisted households are responsible for paying for their utility costs directly, they receive a monthly utility allowance that pays for certain utilities, such as electricity. The new guidance provides clarity for when community solar credits can be excluded from household income and utility allowance calculations, meaning housing costs for residents in properties participating in HUD Multifamily, Public Housing, and Housing Choice Voucher rental assistance programs will not increase due to the added savings and benefits from a community solar subscription. In this way, the savings from community solar will accrue to the affordable housing resident. HUD can issue state-specific determinations to exclude community solar from utility allowance calculations. Email email@example.com for help receiving guidance on state-specific determinations.
How much community solar can be built on HUD-assisted housing?
According to an analysis created by the National Renewable Energy Laboratory (NREL), almost 50% of HUD-assisted facilities have been identified as suitable for rooftop solar systems, much higher than the national average, which is only 26% of buildings. NREL has identified as much as 8.7 GW of rooftop solar technical potential across approximately 200,000 HUD-supported facilities, which could provide community solar benefits to the households residing in them.
Are community solar projects installed on buildings where subscribers live?
Not necessarily—and that’s the beauty of community solar. It doesn’t matter where the solar array is located. As long as you’re subscribed, you’re reaping the benefits of the solar energy being produced, regardless of where you live. The vast majority of community solar arrays are off-site, but some do exist on-site at an apartment or condominium building, either on the roof or on the property.
How does someone subscribe to community solar?
Check with your utility to see if there are any local community solar programs available to you. You can also search the internet by typing in phrases like “community solar near me” or “community solar near (your location)”. If possible, read reviews or ask to speak with other members of the program to make sure it’s a good fit for you. Don’t be afraid to ask questions.
- U.S. Department of Housing and Urban Development's Treatment of Community Solar Credits on Tenant Utility Bills Memo
- Stewards of Affordable Housing for the Future's Community Solar and HUD Subsidized Housing: An Overview of Current Policies, Programs and Practices and the Impact to Tenant Utility Allowances and Income