Original image from Canva by yangphoto
By Cyrus Reed
When the U.S. Environmental Protection Agency suddenly announced a $7 billion new “Solar for All” competition using money from the Inflation Reduction Act of 2022, the Lone Star Chapter of the Sierra Club was concerned that Texas entities might not apply. So we sent a letter to the Governor urging him to appoint a state agency to apply. We weren’t sure which state agency—the Public Utility Commission of Texas (PUC), the State Energy Conservation Office (SECO), or the Texas Department of Housing and Community Affairs (TDHCA)—was the correct one, but we didn’t want Texas to miss out on “free” money specifically designed to help low- and moderate-income Texans gain access to onsite solar and community solar.
Solar is hot in Texas. Large, utility-scale solar plants have dotted the Texas landscape and make our state second for installed solar just behind California. However, when it comes to smaller scale and local solar, Texas is lagging far behind. While growing, most onsite and community solar projects tend to benefit higher-income households that can afford the upfront costs, or “premium”-type community solar projects.
In announcing the program, the EPA was careful to note three different buckets of potential awardees—at least one per state, several for tribal applications, and another catch-all category for applications that might stretch across state boundaries. In all, around 60 awards of between $25 million and up to $400 million would be granted “to states, territories, Tribal governments, municipalities, and nonprofits to expand the number of low-income and disadvantaged communities primed for residential solar investment—enabling millions of low-income households to access affordable, resilient, and clean solar energy.” A copy of the announcement can be found here. Full applications were due October 12th, with an announcement for winners expected in early 2024.
According to agency data, the EPA received hundreds of “Notice of Intent” letters (the first step in the process) totaling more than $38 billion in requests, or more than five times the funding available. In Texas, we have at least 10 entities, including the state government, applying under the competitive grant program.
This is positive and a great sign for the future of solar in Texas, home to more than 30 million people and the largest electricity consuming state in the country. With this scale in mind, the Sierra Club is calling for the EPA to break the mode and consider approving more than one Texas application. Texas deserves more than $400 million in funding!
First, the State of Texas did apply for a full $400 million award through the TDHCA. The state agency already receives significant federal funding from the Weatherization Assistance Program (WAP) and the Low-Income Heating Energy Assistance Program (LIHEAP), and argues in their application that they are the logical entity to be able to assist thousands of low-income Texans in receiving the benefits of local, onsite solar.
The Sierra Club has submitted a letter supporting the application. The TDHCA approach is fairly simple—provide grants of approximately $1 million for multi-family affordable housing projects to add solar. Because the agency has a database of such projects that have in some way already worked with the agency on federal funding or federal tax credits, and because it already works with community action agencies and other non-profits to provide energy assistance, it is well positioned to help hundreds of such units throughout the state. As part of the application, technical assistance, community engagement, and workforce development would also be available.
However, in addition to this important application, a coalition of nonprofits, county and municipal governmental entities and at least one utility—Austin Energy—have applied through Harris County under the “Texas Solar for All Coalition." Their approach is more varied than that provided by the TDHCA and includes specific programs for unique communities like Austin—which already has a well established pro-solar policy—and other communities where solar is very rare.
Under the coalition’s approach, about $50 million would flow to Austin and would be used to “rent” roof spaces of low-income homes, non-profit organizations, and multi-family units through a Power Purchase Agreement, but the resulting energy would be used for a community-wide solar program specifically intended to lower costs to low- and moderate-income households. The application includes technical assistance, workforce training and development, and lots of community outreach and education.
The Sierra Club also provided a letter of support for this proposal, indicating again that we believe that both the TDHCA and Texas Solar for All Coalition applications should be supported by the administration at some level. While it is very unlikely that both would be granted $400 million, we are hopeful that some level of support could be provided. Both a one-size-fits-all multifamily housing program and a more experimental community-based approach are interesting.
Additional applications were received from Webb County, the City of Laredo and the City of Waco, as well as applications from various non-profits, including Energy 4 Humanity, PEG Energy Sunplus, the Rayburn Country Electric Cooperative Inc. and the Texas Clean Energy Nonprofit Corporation. The City of El Paso also joined with some other border communities in New Mexico to apply under the regional approach.
We don’t yet know which of these entities submitted a full application, or exactly how long the EPA will take to make a decision on the many worthy applications, but we are certain that Texas will get a chunk of money to help low-income communities access clean energy. The Sierra Club stands ready to help TDHCA, the Texas Solar for All Coalition, or any other entities engage communities in cleaner forms of energy in a way that lowers bills and creates jobs.