Massachusetts boosts solar programs for low-income residents with $156 million federal grant

A $156 million federal grant will fund groundbreaking solar energy investments for low-income households in Massachusetts, advocates and officials say.

The U.S. Environmental Protection Agency's Solar for All program has awarded Massachusetts money for its plans to provide interest-free loans, financial grants and technical assistance for solar projects that benefit low-income households and public housing facilities. The state's proposal was largely designed to leverage existing programs and resources to maximize the impact of federal funds.

The grant is the largest any New England state has received from the program, but it's well below the $250 million Massachusetts requested. Still, the state expects to implement all of the initiatives outlined in its application, although planners are now working to reallocate the money to designated programs to maximize impact.

“We reached for the stars,” said Elizabeth Mahony, commissioner of the state Department of Energy. “This was an extremely competitive procurement process.”

Solar for All is a $7 billion program created in 2022 by the Inflation Reduction Act, a stimulus package that provides $369 billion for energy and climate programs. Solar for All will award grants to states, territories, nonprofits, tribal governments and municipalities to advance solar energy development. The goal is to reduce greenhouse gas emissions, create energy savings for overburdened households and build markets for renewable energy companies. The grants are targeted at low-income and other marginalized communities where renewable energy has previously been less accessible.

Last month, the EPA announced the selection of 60 applicants for grants ranging from $25 million to $250 million. Only five applicants received grants larger than Massachusetts; 22 received the same amount.

Massachusetts' proposal is structured around initiatives in three program areas: small housing, multifamily housing, and community solar. The programs will be administered by a coalition of agencies including the Massachusetts Clean Energy Center, the Boston Housing Authority, and MassHousing.

“They've brought a really strong coalition of key players on board,” said Kyle Murray, program director at the Massachusetts-based climate nonprofit Acadia Center. “While it's disappointing that we didn't get the full award, I can't stress enough how much of a difference this money will make in bringing solar energy to low-income and disadvantaged communities.”

The small residential portion of the program – originally planned at $40 million – includes two main initiatives. The first would provide low-income households with interest-free loans to finance solar panels. The program would be modeled after the MassSave Heat Loan program and the Mass Solar Loan, which expired in 2020 and provided about 3,000 loans to low-income borrowers to install solar panels.

“We’re going back there and reviving it because it’s been quite successful,” Mahony said.

The original proposal also included $65 million for programs to install solar panels on affordable housing and public housing, which would benefit residents. In housing developments where tenants pay their own utilities, they would save through lower electricity bills. In housing where utilities are included in the rent, that benefit could be something other than energy cost savings: free Wi-Fi or improved amenities, for example.

Another provision of the Inflation Mitigation Act will further strengthen the financial power of installing solar panels on public and affordable housing. In the past, nonprofits were ineligible to receive clean energy tax credits because they did not pay taxes. Now, clean energy tax credits are available to nonprofits in the form of a direct payment.

“That means we can then bring more federal funds into the state of Massachusetts,” said Joel Wool, deputy director of sustainability and capital transformation for the Boston Housing Authority, which will manage the state's share of the grant program for public housing. “Every dollar we can save on operating costs in public housing, we can invest in improving housing.”

The plan's community solar sector builds on the state's existing Solar Massachusetts Renewable Target (SMART) program. All community solar projects receiving funding must meet the existing SMART requirement that at least half of the project's customers be low-income residential customers. Additional points are awarded to projects that provide greater savings, serve a higher percentage of low-income households, or have members – such as nonprofits or public housing agencies – that benefit the community.

At the same time, the state is modernizing SMART to meet current environmental and economic demands. The Solar for All community solar program is likely to be closely tied to these changes, Mahony said.

“We’re really betting big on SMART when it comes to community solar energy that serves low-income customers in a way we’ve never done before,” she said.

Smaller amounts of money from the original plan were to be used to fund improvements – such as roof repairs or wiring updates – necessary to prepare buildings for solar panels, and to provide community outreach and engagement, workforce development and technical assistance.

In addition to the environmental benefits and savings for low-income citizens, supporters of the plan expect the inflow of funds to have a long-term impact on growth and stability in all renewable energy sectors.

“This really allows the Commonwealth and surrounding states to make these investments in their workforce and their supply chain, knowing that there will be demand for this equipment and these services in the years to come,” said Maggie Super Church, director of policy and programs at the Massachusetts Community Climate Bank, part of MassHousing.

The state is currently in the midst of negotiations with the EPA on the final grant agreement. That process is expected to be completed in the spring, with the goal of beginning to roll out the first programs in the fall.

“The numbers are still impressive for what we can do,” Mahony said. “It's just going to look a little different than what we originally planned.”

Anna Harden

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