Connecticut’s solar LMI market

The combination of low-cost Green Bank capital with the LMI PBI gives security to private investors and enables the company to offer an attractive lease product to customers. The solar vendor’s unique underwriting approach evadescredit-quality issues LMI homeowners face, and a lease allows customers to get the full value of the federal investment tax credit in the price they pay for solar. The solar lease and optional energy savings agreement allows Connecticut homeowners to install additional energy efficiency upgrades and pay for them over time; it is available to customers regardless of income or traditional measures of creditworthiness.

Business model 

The model includes an alternative underwriting approach to qualify customers, and a community-based marketing model that targets LMI communities – two key ingredients to reaching this market segment.To improve the success within Connecticut’s LMI market, the Green Bank gives strategic support to community partnerships, outreach, and market research. In 2017, Green Bank worked several solar vendors to update Connecticut LMI solar customer segmentation analysis. This provides insights into market segments, size, geographies, and messaging. The Green Bank also worked with Yale University and Experian to analyze a large dataset of Connecticut residents’ credit and financial health. Both of these market analyses helped the Green Bank and PosiGen quantify market potential, hone outreach strategies, target efforts, and measure success. 
 

Program Results

The subordinated debt and working capital loans Green Bank provided to PosiGen supported the company in attracting over seven times more private investment than the Green Bank’s term financing contribution. These investments have supported a fund of $37 million for PosiGen’s Connecticut solar lease installations. The Green Bank support through the RSIP program’s LMI PBI provides an additional stream of high-quality cash flows that further attracts third-party capital into PosiGen’s Connecticut program. In addition, by driving down the cost of capital through its participation in the financing structure, the Green Bank allows PosiGen to offer a more competitive solar lease product and achieve deeper savings for LMI customers.Customers who go solar with PosiGen in Connecticut pay $60-$110 a month for a 4.5-8 kW system and receive an average net savings of $450 each year. This equates to over $690,000 in solar savings annually across PosiGen’s 1,540 solar homes, of which 900 are verified low-income.Connecticut’s Solar for All partnership demonstrates leadership and innovation in the way it tackles multiple barriers to LMI solar access while delivering a product that has real impact on household-level energy burdens. By taking a multi-pronged, strategic approach to addressing many of the barriers and needs of the state’s LMI communities, the Green Bank and PosiGen have created a model that works for Connecticut homeowners and that could be replicated by other states that want to provide solar benefits to LMI customers and meaningful reductions to LMI energy burdens.

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