Energy, Democracy, Community

How can we build a transition to renewable energy that doesn’t leave the already marginalized behind?

A story from Baltimore

In 2009, the residents of Curtis Bay—a multiracial, working class neighborhood on Baltimore’s industrial southern edge, learned that history was about to repeat itself. Many of the residents could remember how fifteen years ago nearly all the residents of the nearby neighborhoods of Fairfield and Wagner’s Point were evacuated from their homes—built on land that had been more or less sacrificed to petrochemical-driven development and thus rendered unfit for human life. The tight-knit communities—mostly black in Fairfield, largely white in Wagner’s Point, were torn apart, and the houses that remained brought down by demolition or decay.

Now, Curtis Bay, already the most polluted neighborhood in the city, would be made into another sacrificial victim—the nation’s largest trash burning incinerator was going to be built less than a mile from Benjamin Franklin High School that hundreds of young people from the community attended every week day. The most galling part of the proposed incinerator plan, however, was the pretense that this all was somehow “green”—the business plan for Energy Answers, the company behind the scheme, depended on selling the electricity generated by burning trash to the public and nonprofit institutions, including the very school board responsible for the wellbeing of the children at Ben Franklin, as renewable energy. This was thanks to a 2011 Maryland law, supported fervently by then governor Martin O’Malley, that made it possible for sustainable energy quotas to be met as easily buying power from a company burning trash as from those putting up solar arrays or wind farms—and exempting such “green” incinerators from inconvenient regulations like those that prevent schoolchildren from breathing mercury.

What happened in Curtis Bay shows quite clearly that our transition to green energy (or in this case, “green” energy!) is not an automatic process driven unambigously towards happy outcomes by technological progress and good intentions. Who benefits from the green transition is clearly going to be dictated by money and power. Those with neither are likely to be left off the sustainability bus—or even thrown under it.

But there’s another lesson to be learned from Curtis Bay: organized communities can successfully demand something other than business as usual. It started with just a few high school students, who started talking about building neighborhood resistance to the incinerator. With the help of local economic human rights organization called the United Workers, that small initial group snowballed into a massive campaign, bringing students and neighbors together with supportive activists and artists from across the city, all showing up at meetings of the institutions who had signed up to purchase power from the planned incinerator, and demanding they do otherwise. Against all expectations, as of August 2015, it looks like they are winning. The consortium of school boards, local governments, and nonprofits has canceled their contracts with Energy Answers, and the incinerator is far from even beginning construction. Meanwhile, Curtis Bay residents have become leading voices working to create an alternative development plan.

Solar, naturally, has come up as an obvious choice, in no small part due to a parent of one of the children attending Benjamin Franklin High, who also happens to be a self-taught utility-scale solar installation designer. Adamantly opposed to the mercury and other pollution Energy Answers’ project promises to pump into the neighborhood’s air, she’s put forward some detailed and rigorous plans for just how much power could be generated in a truly sustainable fashion on the footprint of the proposed incinerator location. In so doing, she’s made it clear that real alternatives are possible. But alternative energy sources, by themselves, are not automatically wins for economic justice—we need alternatives that are structured to truly benefit communities.

What follows tries to offer a catalog of such solutions: what are the kinds of alternatives that not only sustainably generate electrical power, but also generate economic power in the communities that currently need it most? With the recent announcement by President Obama of a major initiative to support a more inclusive solar economy, it’s imperative that folks concerned with economic and ecological justice have a solid understanding of what’s possible—both within current frameworks and as a result of continued mobilizing and organizing.

The problem with solar

Solar capacity in the United States, while still only meeting a small percentage of our overall energy needs, is growing by leaps and bounds. And the fastest growing sector here is residential solar. But the important question is: who is taking advantage of these new possibilities? When, as one study claimed, installing solar is a better investment than the stock market in 46 of our 50 largest cities, who is accumulating all the new wealth being generated on our decentralizing electrical grid?

Who is accumulating all the new wealth being generated on our decentralizing electrical grid?

For the most part, the growth in residential solar is being driven by a system of incentives and financing which largely targets middle-class households. The tax credits that reward residential investments made in green power largely require homeownership and stable personal finances as prerequisites—at least in the absence of robust mechanisms to facilitate inclusion in the solar boom for renters and low-income households. Companies like Elon Musk’s Solar City and Sungevity, which lease residential photovoltaic systems to homeowners, are growing tremendously, thanks to the generous tax credits their customers can take advantage of.

Historically, the American middle class was largely built on such industry-friendly government subsidies—the homes whose roofs today are going solar in record numbers are largely a product of the federal tax deduction for home mortgage interest, a massive subsidy to middle class property owners and the construction industry. While home ownership is a powerful way for working people to build assets, not every American had the same opportunity to take advantage of these incentives.

Starting with the New Deal, racial discrimination (“redlining”) in the way federal housing policy was conceived and implemented resulted in a white middle class enjoying relative financial stability and the benefits of an investment in home ownership, with both low-income and middle class communities of color locked out of this pathway to prosperity. The discriminatory practices around predatory lending in the run up to the financial crisis of 2007–2008, and the subsequent wave of foreclosures, further wiped out much of the wealth that had been built up through homeownership, however difficult, in communities of color.

Today, this pattern continues in the transition to green energy. While the explicit racial animosity that expressed itself in the redlining maps marking black and brown communities as dangerous might be absent in the policies around solar, certainly the pervasive and persistent results of ongoing racial discrimination in housing policy and real estate financing has has made it that much harder for those on the economy’s margins to benefit financially from the green transition.

Of course, there’s a real need to reduce carbon emissions quickly enough in order to avert planetary disaster, and any cuts to solar subsidies could be catastrophic. But that doesn’t absolve us from considering the economic implications of how we subsidize green energy. We need to challenge policymakers to create and support pathways to sustainability that reverse rather than reinforce existing lines of economic privilege. We need to multiply ways to reduce the barriers preventing low-income communities from making investments in the green economy, and to multiply the ways in which these investments can be held cooperatively and in common. There’s no silver bullet here—just a lot of great strategies that need to be amplified and generalized with the resources needed to take them to scale. Here’s a few key ones to consider:

In a solar purchasing cooperative, people come together to disrupt the individualistic pattern that’s all too prevalent in today’s marketplace, with single homeowners going green all by themselves. Instead of tackling the problem of figuring out how to afford a solar install in isolation, a cooperative allows multiple households to band together and negotiate a better deal with a solar installation firm. (The firm, for its part, can offer a lower rate because of the guaranteed bundle of installation contracts the cooperative is offering.) Besides bringing down prices, these kind of cooperatives help give neighbors a chance to come together and build a community around ecological action. Here in Baltimore, the first solar coops have started springing up thanks to the efforts of Interfaith Power and Light, which is leveraging existing faith-based networks to help potential cooperative members find each other. While solar purchasing cooperatives still depend on home ownership as well as some amount of savings or credit that can be invested in going green, they nevertheless can, by dropping installation costs by up to 30%, significantly reduce the financial barriers that might prevent many people from participating in the decentralized energy economy.

Solar worker cooperatives help bring some economic democracy into the installation side of the solar transition. Solar jobs can be the kind of skilled, good paying work that’s far too often missing in historically marginalized communities—and the solar transition, a giant decentralized industrial project that’s remaking the entire energy sector of the country one roof-top at a time, could help deliver much needed employment opportunities. But it’s important to ensure that jobs and profits stay local, and that workers build real equity in the solar industry. Worker cooperatives can help do this—the one worker, one vote model for running a business is a powerful pattern for maximizing the benefits that accrue to the people actually doing the labor involved in the switch to solar. Moreover, long-running companies like Namasté Solar in Colorado or PV Squared in Massachusetts’ Pioneer Valley prove that the democratic workplace model can thrive.

 

A particularly interesting example is Evergreen Energy Solutions (formerly Ohio Cooperative Solar) in Cleveland, Ohio. Part of the Evergreen cooperative network, this worker-owned business was catalyzed by significant non-profit investment as a job creation strategy in low-income communities of color facing massive levels of unemployment. Because of its social mission, the Cooperative is first in line for contracts with major local nonprofit universities, hospitals, and city governments. The key to note is that from the financing to the ownership structure to the client strategy the business has been designed around economic inclusion, not shareholder profit. With a rapidly accelerating business case for solar combined with growingexcitement around worker cooperatives at the municipal policy level as an economic development tool, it’s possible to imagine popular mobilization could help channel the necessary resources into more and more green worker cooperatives organized along similar lines.

Not everyone has a roof. Not everyone has a roof that’s big enough or ideally oriented for solar power production. And not everyone has the capital to install, by themselves, a photovoltaic system that makes economic sense. Acommunity solar garden is a design pattern for working around these limitations. In the simplest case, a community solar garden works like a community garden does: find a piece of land that’s empty, unprofitable to develop, or even impossible to develop (like a brownfield), and bring it into productive use that benefits a large number of participants. Given the capital investment, of course, a community solar garden needs to have some clearly defined ownership of the land and the panels that are installed on it: one way this can work is to create a cooperative business owned in common by a number of neighborhood residents, who invest money in the solar garden and receive a return from the power generated that’s fed back into the grid. This kind of arrangement lowers a few key barriers to entry; the share of a solar garden may be a much smaller investment than the cost of a whole house system, and people without ownership of a suitable roof can make an investment in the green transition. And the installation costs of a single large solar garden, especially at ground level, are far lower than the costs of installing individual systems on individual rooftops, further increasing the chances of inclusive participation.

Community solar has been in the news recently: it features prominently in the policies announced by President Obama, for instance. Even Solar City, whose explosive growth has focused on single-family residential installations, is moving into community solar, with a planned initiative in Minnesota to roll out 100 megawatts of solar spread across one megawatt solar gardens, open to all customers of the electrical utility. But it’s important to understand that there’s “community” and then there’s “community”: in the same way that a community garden can be the living heart of a low-income neighborhood or a first beachhead of gentrification, and in the same way that “affordable” housing can be truly affordable for everyone or merely targeted at the marginally less affluent at some high fraction of the local AMI, “community solar” can be a vehicle of inclusion, or merely a way for well-off apartment dwellers to participate alongside their suburban compatriots.

In the same way that a community garden can be the living heart of a low-income neighborhood or a first beachhead of gentrification, “community solar” can be a vehicle of inclusion, or merely a way for well-off apartment dwellers to participate alongside their suburban compatriots.

Variations on the basic principle of the community solar garden can be designed to explicitly generate more inclusive or more community-focused results. In Edmonds, Washington, for instance, a solar garden installed on the roof of a city-owned community center through crowdfunded investment in a local energy cooperative will help lower the energy costs the muncipality incurs. Basically, in an age when there’s far too many public-private partnerships, Edmonds and other projects like it show us the possibility for public-community partnerships, where local, decentralized, cooperative investment helps finance infrastructure to benefit the public good.

In Sheperdstown, West Virginia, organizers have created a powerful symbol of a post-coal energy economy rooted in the local community with their Solar Holler project, which used decentralized crowdfunding to finance transition to solar power for the Sheperdstown Presbyterian Church. The best part of the Solar Holler model is that the “investment” required no money from the community investors; instead, local residents installed special smart monitors on their hot water heaters which reduce energy consumption at peak times and agreed to allocate these savings to the costs of financing the solar installation on the roof of the local church. So merely by making their own energy consumption more green, these residents of coal country were able to cooperatively pay for an entirely renewable power supply for a local community institution — which now serves as a highly visible symbol of the possibility of the solar transition in a community whose livelihood used to be tied to the project of burning carbon into the atmosphere as fast as you could dig it out of the ground. (In the Edmonds and Sheperdstown cases, it’s important to note that the city and church both do not pay income tax—and this means they need to rely on community financing in order for tax credits to come into play.)

Building a community solar garden can be done in such a way as to explicitly model racial justice in the energy economy. In Gulfport, Mississippi, the local NAACP branch went up against a politically powerful coal burning power plant operator — in a state with some of the highest electricity rates in the nation, and a long legacy of discrimination and economic marginalization of black communities — and won a comprehensive victory for energy justice, shutting down two coal plants disproportionately polluting communities of color and clearing the way for community solar demonstration projects, including a solar garden where ownership stakes for low-income community members are subsidized by a local foundation. In Highland Park, Michigan, a predominantly black suburb of Detroit, budget constraints and municipal austerity resulted in the removal of the city’s street lights; undeterred, residents have organized a crowdfunded campaign to relight their streets with solar power, replacing the top-down process that would have left them in the dark with a decentralized process of bottom up participatory planning and cooperative ownership.

The key point is that a solar economy that simply grows out of existing power relationships and concentrations of capital is going to look a lot like the old economy in terms of who gets left behind: we need a politics capable of challenging the status quo and ensuring that the solar transition serves as an opportunity to make reparations for a history of dispossession and marginalization.

Virtual net metering, despite its terminological opacity, is one of the key regulatory changes that enables a more inclusive solar economy. Let’s start with net metering, which works on the assumption that someone with solar panels on their roof is also connected to an electric grid, which they purchase power from on cloudy days and during the night. Net metering simply means that the electric utility is required to buy any excess electrical power these solar panels generate while the sun is shining; in essence, you are running the meter backwards — and your electrical bill is based on the net amount of power you’ve used minus the power you generated.

Virtual net metering takes this a step further, and allows you to receive a credit on your electrical bill for solar generated with panels that are located somewhere else — say, in a community solar garden. Without virtual net metering, you can still participate in a community solar garden — but you need to be engaged in a complicated set of accounting relationships, generating profit by selling power like a small electrical utility, pay taxes on that profit, using the proceeds to then pay your home electric bill; for folks who are hustling to put food on the table for their children, this may be a few complicated steps too many. Virtual net metering drastically simplifies things: you buy into a solar garden, your electric bill goes down — end of story.

Right now, state policies around virtual net metering are all over the map, since traditional power companies recognize the power of this seemingly small tweak to upend the energy market. In Maryland, for instance, you can already enjoy the benefits of virtual net metering if you are a large non-profit institution, and the state legislature recently announced that virtual net metering would become possible for individuals — but only for a three year pilot window to evaluate the impact of community solar. It’s a key time to demonstrate the positive impact such policies can have generally and specifically for low-income communities.

Of course, all of this still depends on having some money to invest in solar in the first place. With the extreme asset poverty common in low income communities, and especially communities of color, this is a tall order. The problem is one of sequencing: on the one hand, a lack of wealth prevents communities from investing in solar, but on the other, an investment in solar would save them money and allow them to build that wealth. On-bill financing solves this dilemma by using those projected future savings as a revenue stream to fund an investment in green power. Simply put, it is a loan that is paid back by using the money you saved on your electric bill by going green. Because this happens directly on a user’s electric bill, the repayment of the solar loan is much more likely, and this comparative lack of risk makes lower interest rates possible than would otherwise be available to a low-income individual. A middle-class suburban homeowner, or a wealthy urban apartment dweller, doesn’t really need on-bill financing; they can finance an investment in solar using the assets and credit access their position in the economy comes with. But for someone caught in the trap of asset poverty sketched above, on-bill financing can be critical.

Because this is really a mechanism geared around economic inclusion, it’s predictably less common than some of the other policies outlined here, but there are good models out there — in New York, for instance, thanks to the work of a large coalition of ecological and economic justice advocates, low-income households can make a broad range of investments in energy efficiency through a statewide on-bill financing mechanism. To make things even better, the New York law attaches a state-level community benefits agreement to the policy, ensuring that any work done using this financing creates and preserves good jobs at living wages. It’s when we close the loop between the urgent need to transition away from carbon intensive power and the need to build a more inclusive economy that we can really begin to build the grassroots alliances capable of taking on the entrenched energy interests and winning.

Ultimately, we need to remember that decentralized power generation, while a key part of limiting the impacts of climate change, is not a magic wand that automatically makes the economy more just. The playing field is not going to level itself, no matter how green it gets. To that end, we need to actually shift resources into the communities that have been the most marginalized—in its simplest form, this means subsidizing low-income solar directly, rather than assuming the market or a clever policy tweak will make this happen on its own at the scale that’s necessary to get to true energy justice.

California offers some illustrative examples of a public commitment to funding a more inclusive renewable transition in its SASH and MASH programs: The SASH (Single-family Affordable Solar Homes) program, recently renewed through 2121, uses rebates to provide deeply subsidized — or even free — solar installations to qualifying low-income residents. The MASH program is designed to help bring the benefits of solar to low-income individuals living in multiple-family buildings, by incentivizing landlords to install solar and cut their own costs — as long as they share those reduced costs with their tenants. For both programs, California has partnered with a non-profit called Grid Alternatives that uses this state-subsidized stream of solar installation work to create a statewide green jobs training platform, further increasing the benefits to low-income communities. Locally, although Maryland lacks such a comprehensive framework for advancing energy justice, it is encouraging to see that Grid Alternatives has recently started a pilot project around solar job training in Baltimore.

Finally, we should not be afraid to think big: what would a truly just energy sector look like? Is a highly financialized energy market dominated by unaccountable concentrations of capital the best we can hope for, with maybe some regulation and after-the-fact inclusionary measures thrown in as consolation prizes? Or can we imagine scaling up a truly democratic and sustainable energy system, designed around broad community, cooperative, and public ownership?

Is a highly financialized energy market dominated by unaccountable concentrations of capital the best we can hope for, with maybe some regulation and after-the-fact inclusionary measures thrown in as consolation prizes?

Such a hybrid system was largely responsible for the electrification of much of the rural US, for instance: the market couldn’t see the profit in supplying a public good, so a different set of mechanisms was used to get the job done. Getting a transition to renewables that moves as far away from carbon as possible (and not just when its profitable to do so) may present a similar opportunity: the activists from Hamburg to Boulder who are leading the campaigns to remuncipalize their electrical utilities certainly think so.

It’s important to remember, however, that even a large-scale switch to renewable power doesn’t automatically guarantee inclusive or just outcomes. And public ownership is no panacea, either: as Baltimore knows all too well, a public utility is perfectly capable of denying basic services to poor communities of color while giving large corporations a free ride. But remuncipalization efforts do present a chance to demand a politics of solidarity aimed at reversing disinvestment and building long-term community power rooted in democratically controlled institutions — indeed, it’s only with such an explicitly inclusive agenda that one is going to be able to build the alliances capable of winning fights for deprivatization and democratization in most major American cities. If poor communities and marginalized communities of color don’t see more than a token place for themselves in the new green economy, they’re highly unlikely to vote and organize to support it.