Solar panels are not limited to wealthy homes — it’s the middle class that is the biggest adopter of solar power in the U.S.
A new Center for American Progress (CAP) study shows that solar technology is being overwhelmingly adopted in middle-class neighborhoods in the U.S., as more than 60 percent of solar installations are occurring in zip codes with median incomes ranging from $40,000 to $90,000 (see chart below).
The CAP report used residential solar installation data from the Arizona Public Service (APS), California Solar Initiative (CSI) and New Jersey’s Clean Energy Program (NJCEP) databases to examine solar adoption trends across income levels in the three largest U.S. solar markets – Arizona, California and New Jersey. In addition to showing that middle-class homeowners are driving rooftop solar adoption, the report also found that the areas with median incomes ranging from $40,000 to $90,000 have experienced the most growth. In fact, the neighborhoods with the most year-over-year 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.
These findings are in contrast with the current utility-industry narrative, which paints rooftop solar as a technology that is only being adopted by the wealthy. The contention then from many utility executives is that lower-income customers are subsidizing wealthy customers through solar policies, such as net metering. Earlier this year, Southern Company CEO Thomas Fanning told shareholders that if solar customers aren’t paying the utility for the use of the electric grid, then “…you in effect have a de facto subsidy of rich people putting solar panels on their roof and having lower-income families subsidize them.”
Net metering, which is a rate structure that allows solar customers to get credit for excess energy they supply to the electric grid, has been in the news a lot lately. High-profile battles over net metering are taking place in states across the country, including California, Arizona and Colorado. Utilities argue that customers with solar power systems are not paying their fair share for upkeep of the grid and are worried that rooftop solar may undermine their business models as more of their customers go solar and buy less power from them.
Solar power advocates believe that net metering and other solar policies ensure greater access to rooftop solar and are necessary for its continued growth. These advocates argue that rooftop solar power generation offers many benefits to the grid that aren’t always accounted for in studies on net metering and its impact on non-solar customers. These benefits can include: avoided fuel costs, reduced transmission and distribution costs, and an energy source that generates electricity without emitting carbon pollution, among others.
Mari Hernandez is a Research Associate on the Energy team at the Center for American Progress.