Rooftop

Time to forget about FICO? New solar qualification metric for low-income households launches

Time to forget about FICO? New solar qualification metric for low-income households launches
(Courtesy: Ricardo Gomez Angel/Unsplash)

Solstice, a community solar provider, announced funding from Google.org to advance its EnergyScore initiative – a machine learning-based qualification metric meant to address the disparities faced by low- to moderate-income (LMI) households in accessing clean energy.

EnergyScore combines utility payment history and customer data with algorithms to provide solar developers with a metric that is intended to predict subscriber bill payment behavior for utilities

Approximately four out of every five American households are excluded from rooftop solar installations due to factors such as eligibility restrictions, homeownership status, and limited access to financing, Solstice said, and less than 5% of solar installations belong to households earning less than $40,000 per year.

“Early results have been promising,” said Sandhya Murali, cofounder and newly appointed CEO of Solstice. “Our analysis of nearly 875,000 customer records demonstrates that EnergyScore results in a 1.9 percentage point reduction in default rate compared to FICO and increases the number of LMI households by 14%. This support will empower us to advance our research and launch EnergyScore, ensuring that clean energy access is equitable and inclusive.”

In a pilot project, Solstice will partner with a residential solar financier or developer to evaluate the efficacy of EnergyScore. The primary goal is to demonstrate tangible impacts for marginalized communities, which Solstice argues have historically been excluded from green energy financing. Solstice will begin recruiting pilot partners later this year.

“Solstice was founded on the belief that solar energy should be accessible to all, regardless of socioeconomic status,” stated Steph Speirs, cofounder and former CEO of Solstice. “EnergyScore is a scalable solution to include more households in our clean energy transition, aiming to bridge the gap for households unable to qualify for clean energy upgrades.”

A recent report from think tank Win Climate found that households making less than $50,000 annually make up 24% of owner-occupied houses in New York but have only received 5% of residential tax credit subsidies.

Although New York has the largest of several state tax credit incentives for homeowners installing rooftop solar, the state’s “rooftop solar gap” is large, leaving many low-income residents unable to take full advantage of incentives, according to the report.

Per the report, New York homeowners with an annual income of more than $50,000 are 2.5 times more likely to have rooftop solar than those making below $50,000, as those making below $50,000 often don’t pay enough income tax to fully claim the credit. Households making less than $50,000 annually make up 24% of owner-occupied houses in New York, but have only received 5% of residential tax credit subsidies.

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