Solar Power to the People: The Rise of Rooftop Solar Among the Middle Class
SOURCE: flickr/Michael Mazengarb
Endnotes and citations are available in the PDF version of this issue brief.
Homeowners across the United States
Solar Power to the People: The Rise of Rooftop Solar Among the Middle Class
SOURCE: flickr/Michael Mazengarb
Endnotes and citations are available in the PDF version of this issue brief.
Homeowners across the United States have begun a rooftop solar revolution. Since 2000, more than 1,460 megawatts of residential solar installations have been installed across the country, and more than 80 percent of that capacity was added in the past four years. In 2012 alone, rooftop solar installations reached 488 megawatts, a 62 percent increase over 2011 installations and nearly double the installed capacity added in 2010.
Residential solar photovoltaic, or PV, systems—also referred to as “distributed” or “rooftop solar” in this report—consist of an array of solar panels that are roof or ground mounted to produce electricity that is either fed back into the electric grid—grid connected—or solely used onsite by the residential building—off grid.
The question is: Who is buying up all of those solar power systems? Through our analysis of solar installation data from Arizona, California, and New Jersey, we found that these installations are overwhelmingly occurring in middle-class neighborhoods that have median incomes ranging from $40,000 to $90,000. The areas that experienced the most growth from 2011 to 2012 had median incomes ranging from $40,000 to $50,000 in both Arizona and California and $30,000 to $40,000 in New Jersey. Additionally, the distribution of solar installations in these states aligns closely with the population distribution across income levels.
But many within the electric utility industry have claimed that distributed solar is mainly being adopted by wealthy customers. Concerned by the threat that rooftop solar’s rapid growth poses to traditional utility business models, some utility executives have used this claim to support a rising desire within the industry to alter existing solar programs and policies. The idea is that through solar policies such as net metering, middle- and low-income customers who cannot afford to go solar are subsidizing the wealthy customers who can.
In this issue brief, we show that rooftop solar is not just being adopted by the wealthy; it is, in fact, mostly being deployed in neighborhoods where median income ranges from $40,000 to $90,000. In the first section, we present the overall findings from our income analysis of solar installation data from Arizona, California, and New Jersey. We then discuss the implications of those results in the context of the current growth of rooftop solar and the ongoing discussion of solar policies that will affect its future growth.
Rooftop solar adoption trends
California, Arizona, and New Jersey are currently leading the nation in solar deployment and therefore offer insights into the way that rooftop solar is being adopted across the country. Although these states are home to varying solar programs and incentives, similarities exist in the way that residential solar installations occur across income levels, with our research showing that the majority of solar power systems are being installed in middle-class neighborhoods.
We collected solar installation data contained in the Arizona Public Service, or APS; the California Solar Initiative, or CSI; and New Jersey’s Clean Energy Program, or NJCEP, databases to examine the adoption of rooftop solar by income level. These databases contain information on individual installations for which residential and nonresidential customers have applied for solar incentives, such as rebates or renewable energy certificates.
The APS database contains data on installations made under the solar rebate program offered by Arizona Public Service, which is the largest utility in Arizona and provides electric service to most of the state. The CSI database tracks installations made under the California Solar Initiative program, which offers rebates to customers of three investor-owned utilities: Pacific Gas and Electric, Southern California Edison, and San Diego Gas & Electric. The NJCEP database contains data on installations made under any of the following incentive programs offered in New Jersey: Solar Renewable Energy Certificates, the Renewable Energy Incentive Program, and the Customer On-site Renewable Energy Program.
By analyzing the median household income that corresponds with installations from each ZIP code in the three datasets, we found three key similarities. First, they all exhibit a similar installation distribution pattern, in that at least 60 percent of homeowners are installing solar panels in ZIP codes with median incomes ranging from $40,000 to $90,000. In fact, 80 percent of APS installations were for customers in that income range. To demonstrate this, Figure 1 shows the percentage of rooftop solar installations by dataset and income range.
Another characteristic the datasets share is that the distributions of solar installations across income levels are similar to the population distributions within each region. Figure 2 displays the installation and population distributions across income levels for each dataset.
As you can see in Figure 2, the APS and CSI graphs show that installations and populations are more closely aligned in the lower income brackets of less than $60,000, while the NJCEP graph shows nearly perfect alignment in the higher income brackets of $90,000 and above. This alignment between solar installations and household distribution indicates that installations are being spre