Getting Solar+Storage to Scale: How affordable, clean, and resilient energy solutions are being made more accessible in Texas

Note: This blog is a recap of a recent episode of HARC’s Energy Crossroads Podcast, Solar + Storage Finance Opportunities, featuring Greg Rosen.

Communities across the country, including Houston and other Texas communities, are trying to accelerate a transition to a clean and just energy economy that includes options for everyone to participate and benefit. Emerging technologies such as solar+storage (S+S) systems allow utilities and their customers to generate, consume, and store their own solar energy that can be used later when the sun doesn’t shine or for resilience in the event of power outages. Even with prices for renewables and S+S systems continuing to come down, we still see a lack of access to capital to acquire this technology, especially for low income communities who pay three times more of their household income on energy costs compared to non-low income households and face disproportionate, negative impacts due to climate change. This is why our research project, Powered for Good, is currently investigating how to rapidly scale up finance and other strategies that result in more accessible, affordable, and resilient renewable energy solutions for low income communities in Texas.

Clean energy landscape in Texas

Texas has more wind power than any other state. Over the last few years, Texas has also established itself a national leader in installed solar capacity, having installed 3.4 GW solar in 2020 alone, more than any other state except for California–and enough to power about 340,000 homes. There is a growing value proposition for S+S in Texas: a battery can be charged with cheap solar energy and be used when the wholesale market cost of power is very high. There’s also a resiliency component: S+S can support a home, apartment building, or a critical government need with backup power during weather emergencies caused by extreme heat, hurricanes, and winter storms, which are increasingly more common due to climate change.

Although this abundance of renewable resources, coupled with the decline in costs, have made it possible for Texans to enjoy low-priced clean energy, access to these resources is not always available for the 6.5 million Texas households that can choose their electricity supplier. There are several barriers and deficits that are preventing households from switching.

Consumer and market barriers preventing clean energy adoption

Through our Powered for Good project, we identified the following barriers that have kept consumers from more actively participating in purchasing renewable energy or accessing S+S products:

1. Information Deficit: Like cell phone or insurance offerings, Texans are inundated with sly advertising and offerings from Retail Electricity Providers that sell power to households that aren’t actually economical. This challenge is exacerbated by the fact that many consumers are not fully literate or numerate, and English is not the first language for many Texas households.
2. Trust Deficit: It’s also very difficult for consumers to determine which sources of information are reliable.
3. Attention Deficit: People don’t have the time or inclination to look at opportunities to save money and switch to 100% clean energy.
4. Credit Deficit: Traditionally, retail electricity providers require large security deposits to help mitigate customer credit risk.

Addressing deficits through community and market-based solutions

Informed by Powered for Good research, a new company called Energy Well Texas was formed to address these deficits. Its mission is to speed the transition of millions of customers to green energy, build community wealth and resilience, and contribute to rectifying historic issues of environmental justice and equity. The business model has already been piloted in Houston, and the results were astonishing–30%+ savings on household electric bills, and critical emergency power provision for 3+ days when storm Uri hit Texas a few weeks ago!

Powered for Good and Energy Well are considering a multi-dimensional approach to address key deficits that involve:

• Marketing designed to educate, not confuse.
• Offering consumers a flat rate as an all-in, fixed cost per kWh.
• Developing partnerships with community serving organizations to help residents better understand their electricity bills and how to save money.
• Setting up ways for Energy Well Texas to be guided–and held accountable–by the communities it serves through some innovative components of its business model related to customer ownership and community leader stewardship. Similar to a co-op where each customer is a partial owner of the company, part of the ownership of Energy Well Texas will be held in trust to benefit and build wealth for customers–and their communities–that adopt Energy Well Texas products.
• Mitigating customer credit risk through a combination of reserves and other financial risk mitigation instruments.
• Providing different sizes of backup power to customers ranging from cell phone charging, to critical household circuit backup, to community centers–some of which will be portable S+S systems that could allow people to shelter in place during a power outage.

It only takes about two minutes for a new customer to sign up and switch their power to green power, which often can be cheaper than their current (brown power) provider’s offering. This approach can be a stepping stone to the adoption of technologies that make individuals safer by adding some level of energy storage at home. Switching also makes the air cleaner and reduces emissions. This new approach and its related electricity offering bundle will also open access to low income communities currently facing higher energy burdens.

With so much solar in Texas going up right now, it is easy to imagine a green-powered Texas economy in the coming decade!

Acknowledgements

Powered for Good is a research collaboration between HARC, High Noon Advisors, Moonlight Interests, and the Texas Energy Poverty Research Institute (TEPRI) that seeks to explore, develop, and accelerate accessible clean energy initiatives in the deregulated electricity market in Texas. This research is supported by the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE) under the Solar Energy Technologies Office Award Number DE-EE0009007 as well as the Jacob and Terese Hershey Foundation.

About our Guest Blogger

Gregory Rosen is Founder and Principal at High Noon Advisors (HNA), an advisory firm focused on the rapidly evolving space comprising renewable energy, efficiency, storage, software, finance, policy and energy access. He is a 20-year renewables finance veteran and strategist who has developed or financed more than $400 million worth of residential, commercial and utility solar projects.  He is currently working with a variety of companies and non-profit organizations to craft and raise scalable, community-friendly financing for clean energy initiatives in both the US and the developing world.