State of Green Business
Meet the ex-White House official growing the market for community power
It's no secret that solar prices are dropping, but who ultimately stands to benefit from renewable energy gains remains something of an open question.
As the chief executive of Groundswell, a Washington, D.C.-based nonprofit focused on community power, Michelle Moore spends her days devising new business models to expand the reach of energy efficiency measures, solar and wind energy.
Michelle Moore will be speaking at VERGE 16, Sept. 19-22 in Santa Clara, California.
With community solar and new approaches to financing coming into focus, Moore is focused on a range of efforts to roll out new renewable installations across the country — an outgrowth of her days in Washington as a senior advisor at the Office of Management and Budget. She also previously served during the administration of President Barack Obama as the federal environmental executive on the Council for Environmental Quality
In an interview edited for length and clarity, Moore talked pairing affordable housing and solar, moving beyond credit scores to finance renewable energy and gliding on the coattails of Pope Francis' climate advocacy.
Lauren Hepler: One of the knocks against the accessibility of solar is the financial barrier to entry. Do you see potential to move beyond reliance on credit scores and other financial metrics that can put those with lower incomes at a disdvantage?
Michelle Moore: The first thing for us is really solving or creating financial models that put low- and moderate-income households at the center of the solution, instead of as an add on at the end of the day that’s enabled by policy incentives or policy mandates.
The rooftop solar marketplace has really exploded. I mean we finally hit the 1 million solar installation mark a couple months ago after 40 years in the making, and we’ll double that to 2 million installations within the next two years. So the model that’s based on consumer credit and a long-term power purchase agreements and sometimes cash up front has been very effective in scaling the marketplace and investors. Structured finance has gotten very comfortable with that model, so it’s something that the market understands.
Hepler: What alternatives are out there?
Moore: There’s a demand for innovation there that will be able to get investors comfortable. One of the places that we’ve looked for inspiration is focusing on utility credit models. For instance, for getting projects developed instead of treating community solar arrays like a big rooftop.
By looking for inspiration in how utility credit models work, I think that another source for inspiration for Groundswell and our partners at Sustainable Capital Advisors has been looking for affordable housing. Not only for models for project finance, but also looking to affordable housing for models for long-term, community-aligned ownership that has been very fruitful as well.
There are other models that I’m aware of where big employers with big rooftops can think about the real estate aspect of their roof — not only how they can monetize it, but also how they can give their employees subscriptions to more affordable clean power, even as a part of their CSR commitments and employee benefits program.
It just takes, as Ray Anderson always said, courageous innovation to create that first demonstration. It's those first examples of models that the market is going to be able to get its mind around that aren’t so exotic that they won’t scale that can help bring many more people to the clean power table.
Hepler: Where are we now in terms of rolling out more community solar?
Moore: Community solar is this really incredibly exciting, very nascent stage of the marketplace where there’s a lot of stuff going on. There’s this tremendous promise — this tremendous potential upside that the National Renewable Energy Laboratory has helped to identify as being the single largest distributed power source in a country within five years, or an $8 billion potential investment opportunity.
But the market is just really getting organized around that. There’s what, 100 megawatts of community solar projects in operation today, maybe 120 projects around the country? It’s hard when you’re thinking about 100 megawatts potentially turning into gigawatts.
Where we focused is executing on the goals that we announced last November. From the Groundswell perspective, our aim is to convene a target of five community solar projects by the middle of next year to demonstrate our model towards replication and scale. And what we’ve found — in working in communities, in low- and moderate-income communities primarily in D.C. and in Baltimore, where you’ve got policy environments that are enabling — is that the demand is potentially tremendous.
There’s some explaining you have to do for sure. But the possibility of people who rent — people for whom, from a financial perspective, even if they own their home, installing a solar array on the top of it just really isn’t feasible for them — to attract investment to their community, and to make better use of a vacant lodge or under-utilized asset. Even in the past six months, we’ve gone from announcing goals to having five projects under letters of intent moving into technical design and feasibility.
Hepler: Can you share any details about the five community solar projects currently in the works?
Moore: I can share with you in general who we’re working with. We don’t want to release the names until we finish feasibility and we know we’re going to be able to plug into the grid.
The five projects in D.C. and in Baltimore would total around 2 megawatts between them, and they’d be a mix of ground mount and rooftop mount. The projects that are under an agreement now, and many of the projects in the pipeline, are working in partnership with faith institutions — with the church community, and primarily with the African American church community.
In churches, you have institutions in some cases with big roofs and land that they’re not using. And when you’re talking about a lower income community the church is also a center of community. Right? It’s where you go when your kids don’t have a coat in the wintertime to get a coat.
Hepler: And you see potential for those partnerships to ultimately lower people's power bills?
Moore: It’s discounted versus the utility standard service, but also that’s more just in terms of providing investment for the community and a source of power that honors people’s health and well-being is a really powerful offering.
We’re seeing not only interest, but uptake that we’re also talking with affordable housing developers. There are many organizations that are looking at affordable housing and the role that it can play in providing clean power to its residents, and that’s something that some of the new policies that have come out from the Obama administration as a part of their energy equity initiative are certainly helping to enable.
We think that there’s some real promise there and the opportunity to solve some challenges from a real estate perspective, because oftentimes the ownership horizon might not match up with a 20-year lease of a roof.
Hepler: It’s interesting that you mentioned the faith community. It does seem like we’re at an interesting point there, too, where even at an international level you have the pope weighing in on climate change.
Moore: I think that there’s a transformational element of the conversation with the faith community around community solar in particular. You have Interfaith Power and Light, Green Faith up in New Jersey, the Green to Black Church Initiative from Greens for All. A lot of groups have been talking about the stewardship aspect of environment and climate as it relates to the role of the church and the church’s responsibility as an owner-operator and also as this support for a community.
If you’re a church community and a significant component of your service is not only to your membership but also to the broader community that you serve of lower-income families, climate and environment may be important but it may not be the first most important priority, right? The immediate needs related to people’s survival as a family is what you’ve got to think about.
If you’re living in a rental home and you’ve got high utility bills because the landlord is not exactly investing, your household budget means that you’re just replacing stuff when it breaks. Your energy costs are high — 10 percent plus of your income, and then you go through a heat spell or a cold snap in the winter and get slammed at the end of the month with a $350 utility bill. That's a real story of one of the members of one of the churches that we’re working with.
It’s not a panacea, but it’s part of the solution set and it’s something that we believe that community solar has a really unique opportunity to help bring to communities.
Hepler: Do you think there’s promise for new models where there’s more private sector involvement in some of these initiatives?
Moore: Groundswell’s project development model would depend on private investment to drive project construction. We're serving as a nonprofit project developer and subscriber manager, if you will. And then we’re working to develop projects that would then leverage private sector investment and low-cost debt from community development finance corporations or from the U.S. Department of Agriculture, depending on where the project was located.
One of our goals is to demonstrate that that finance model works at scale, so that we can create a business case if you will. We also think that working community solar because of the community investment components, because of the visibility, because of the agency that people can take in bringing it to their community has the potential to be a powerful pull through for energy efficiency.
Energy efficiency is a fundamental part of the way that we engage with the people who live in the community as a way that you can help people start saving immediately. But clearly, energy efficiency is probably one of the least sexy things in the world. It’s all behind the wall. A lot of it is behind the wall. It’s hard to see because you get your utility bill at the end of the month and especially if you’re struggling. Any savings just kind of, like, disappear into this thing that the average American family thinks about all of nine minutes a year.
Once you’ve built a relationship with where people get their energy through a community solar project, we think that there’s some real opportunity there — especially with the scale that utilities would really be able to leverage. We see some of that happening actually among rural electric co-ops already.
Hepler: I did want to ask about the geography of solar. How much is the footprint of renewable energy really growing, and do you have a concrete definition of what's considered community solar?
Moore: From a technical perspective, a community solar project and its subscribers typically need to be within the same utility service territory. That could be next door. That could be many miles away.
When you’re talking about size and scale of project, there’s also the issue of economics. In some markets, a 250-kilowatt project may make sense from an economic perspective.
From a community perspective, I think that we can define it in terms of just how people identify as members of community. If it’s a church community, you may have people who are served in the neighborhood. You may have people who drive in from the other side of town. If you’re working for a school community, you’re going to have a boundary that’s likely designed by the school district.
In any case, I think a key thing to think about is just visibility of the asset. Even in the circumstance where a project is maybe tucked away or further away — maybe a little bit bigger in terms of where the bulk of the power is being generated. Where might there be opportunities to create like showcase installations so that people have the opportunity to see and experience this wonderful community asset.
Hepler: If you think about solar as infrastructure, are there opportunities to kill two birds with one stone in terms of building multi-use systems like solar-powered electric car chargers?
Moore: There are a lot of interesting opportunities. Again, the market is so nascent and is predicated to grow so fast. One solution that we’re specifically looking at is storage. Especially when we’re talking low- and moderate-income communities, there are some tremendous community resilience opportunities associated with integrating storage.
Not only are you able to make the overall project more efficient, but say the project is hosted by a school and the school also serves as a shelter in the case of power outages or a natural disaster.
Low-income communities often have a higher percentage of people with chronic health problems like diabetes and heart disease, which makes them more vulnerable to big temperature shifts which means they have medication that has to be refrigerated. Integrating storage into community solar project would have the potential to help to create a physically more resilient community.