Massachusetts will supercharge solar programs for low-income residents thanks to a $156 million federal grant

A $156 million federal grant is expected to fund a transformative investment in residential solar energy for low-income households in Massachusetts, supporters and officials say.

The U.S. Environmental Protection Agency’s Solar for All program has awarded money to Massachusetts for plans to provide zero-interest loans, financial grants and technical assistance for solar projects that will benefit low-income households and public housing facilities. The state’s proposal was largely designed to leverage existing programs and resources to maximize the impact of federal funds.

The grant is the largest of any New England state received under the program, but well below the $250 million requested by Massachusetts. Still, the state expects to proceed with all initiatives outlined in the proposal, although planners are currently working to reallocate funds among the intended programs to maximize their impact.

“We were flying towards the stars,” said Elizabeth Mahony, commissioner of the state Department of Energy Resources. “It was an extremely competitive awards process.”

Solar for All is a $7 billion program created in 2022 under the Inflation Reductions Act, an economic stimulus bill that included $369 billion in energy and climate change spending. Solar for All will provide grants to states, territories, nonprofits, tribal governments and municipalities to expand solar energy development to reduce greenhouse gas emissions, create energy savings for overburdened households and build markets for renewable energy companies. The grants will target low-income and other marginalized communities where renewable energy has historically been less available.

Last month, the EPA announced its selection of 60 applicants for grants ranging from $25 million to $250 million. Only five fellows received larger awards than Massachusetts; 22 received the same amount.

Massachusetts’ proposal centers around initiatives in three program areas: small housing, multifamily housing and community solar. The programs will be managed by a coalition of agencies including the Massachusetts Clean Energy Center, Boston Housing Authority and MassHousing.

“They brought in a really strong coalition of key players,” said Kyle Murray, program director of the nonprofit Acadia Center in Massachusetts. “While it is disappointing that we did not win the entire award, I cannot emphasize enough how much this money will be a game-changer in bringing solar energy to low-income and disadvantaged communities.”

The small portion of the program earmarked for housing – originally slated to receive $40 million – includes two main initiatives. The first would provide low-income households with zero-interest loans to purchase solar panels. The program would be modeled after the MassSave Heat Loan and Mass Solar Loan programs, which ended in 2020 after providing about 3,000 loans to low-income borrowers to install solar panels.

“We’re going back to it and reviving it because it’s been quite successful,” Mahony said.

The original proposal also earmarked $65 million for programs that install solar panels on affordable and public housing units to benefit residents. In housing estates where tenants pay for utilities on their own, they would achieve savings in the form of lower electricity bills. In apartments where utilities are included in the rent, this benefit may be something other than savings on energy bills: free Wi-Fi or improved amenities, for example.

Another provision of the Inflation Reduction Act will further increase the financial power of installing solar panels on public buildings and affordable housing. In the past, nonprofits were ineligible for clean energy tax credits because they didn’t pay taxes. Currently, clean energy tax credits are available to nonprofits as a direct payment.

“This means we will be able to bring more federal resources to Massachusetts,” said Joel Wool, associate administrator for sustainability and equity transformation at the Boston Housing Authority, who will administer the statewide portion of the public housing grant program. “Every dollar we can save in operating costs in public housing is a dollar we can put toward improving housing conditions.”

The community solar portion of the plan builds on the state’s existing SMART program, the Solar Massachusetts Renewable Target. All community solar projects receiving grants will have to meet the existing SMART requirement that at least half of the project’s recipients be low-income residential customers. Additional points will be awarded to projects that offer greater savings, serve a greater percentage of low-income households, or have members – such as nonprofits or affordable housing facilities – that benefit the community.

At the same time, the state is in the process of updating SMART to meet current environmental and economic needs. The Solar for All community solar program will likely be closely linked to these developments, Mahony said.

“We’re really big on SMART when it comes to community-shared solar that serves low-income customers in a way we’ve never had before,” she said.

Smaller pots of money in the original plan were to be used to fund upgrades — such as roof replacement or wiring updates — needed to prepare buildings for solar panels, as well as to provide community outreach and engagement, workforce development and technical assistance.

In addition to the environmental benefits and savings for low-income residents, supporters of the plan expect the influx of funds to have a long-term impact on the growth and stability of all aspects of the renewable energy industry.

“This really enables the Commonwealth and neighboring states to make investments in their workforce and supply chain, knowing that there will be demand for this equipment and services in the coming years,” said Maggie Super Church, director of policy and programs for the Commonwealth of Massachusetts Climate Bank, part of MassHousing.

The state is currently in negotiations for a final grant agreement with the EPA, a process expected to be completed this spring. The goal is to start implementing the first programs in the fall.

“The numbers are still impressive in terms of what we can do,” Mahony said. “It’s just going to look a little different than what we had planned initially.”

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