Research finds positive takeaways from U.P. community solar project

If “Celica” makes you think of a Toyota, think again. CELICA – the Clean Energy for Low Income Communities Accelerator – is a Michigan partnership of state and local governments with the U.S. Department of Energy (DOE) to lower energy bills for people in low-income communities through community solar energy.

Solar panels in L'Anse Township in the Upper Peninsula.

The DOE defines community solar as any solar project or purchasing program within a defined area where benefits flow to multiple customers such as individuals, businesses, nonprofits, or other groups. Energy may be generated by solar panels on beneficiaries’ property or, more often, at an off-site array. Subscribing members of a community receive electrical power and/or financial benefits such as credits on their electric bills for energy generated by their allotted panels.

Many people want the benefits of solar energy but for various reasons cannot install solar panels where they live. They may rent, have an unsuitable roof, or experience other limitations. But all ratepayers and taxpayers help fund renewable energy projects, so increasing access to the benefits is a matter of equity.

Closer look at CELICA

A recent scholarly article brought Michigan’s CELICA project new attention. The July 2024 article in the journal Energy Research and Social Science weighs the impact of community solar projects by examining the second of CELICA’s three phases so far. Their findings are encouraging for expanding community solar to low- to middle-income households in small communities in the U.S. and abroad.

CELICA launched in 2018 with a co-op utility community solar project as its first phase. The Michigan Department of Environment, Great Lakes, and Energy’s (EGLE) Energy Services partnered with Cherryland Cooperative and the Northwest Michigan Community Action Agency on a community solar project for up to 50 low-income households in the Grand Traverse region. Each household received home weatherization upgrades and receives a monthly credit from nine solar panel shares apiece.

Phase III in 2021 was an Energy Services partnership with Consumers Energy and Capital Area Community Services to implement a low-income investor-owned utility community solar project for up to 50 low-income Lansing households.

The program plans a fourth phase that will focus on a manufactured home community.

CELICA Phase II – the focus of the journal article – is a low-income community solar project partnership begun in 2019 with EGLE’s Energy Services; the Upper Peninsula village of L’Anse, and the Baraga-Houghton-Keweenaw Community Action Agency (BHKCAA). Each of up to 25 eligible low-income households received home weatherization upgrades and bought up to 10 solar panels, with financing and solar credits applied to their electric bills.  An annual evaluation determines if participants still meet eligibility or if the program should expand to additional households.

Michigan currently does not have enabling legislation for community solar, so community solar programs in Michigan are developed and managed through a local electric utility.

Through interviews, phone surveys, and analysis of two years of monthly energy consumption and billing data, researchers from the University of Michigan, Michigan State University, and the University of California found positive “distributional, recognitional, and procedural” justice outcomes from community solar even without supportive legislation.

Distributional justice is concerned with how changes affect different groups; recognitional justice identifies interest groups and rights holders who may be affected; and procedural justice is concerned with elements of governance, such as who is included and how.

New support for solar

Noting that financial barriers can be a significant challenge for community solar projects, the researchers said grant funding from the State of Michigan was vital to the L’Anse project’s success.

The years since the L’Anse project launched have seen new financing options emerge for community solar, including green banks, financing institutions, and cooperatives. The Greenhouse Gas Reduction Fund in the Biden Administration’s Inflation Reduction Act includes $27 billion dollars for the U.S. Environmental Protection Agency (EPA) to support clean energy and climate projects that benefit low-income communities.

The EPA awarded the State of Michigan $156 million in April 2024 for the MI Solar for All program to support solar development for thousands of households in low-income and disadvantaged communities across Michigan through direct financial assistance for community solar, rooftop solar, and energy storage. The new MI Solar Communities platform offers residents information on technical assistance and programs for obtaining solar as a community.

EGLE’s Energy Services made $320,000 in grant funding available in 2024 through MI Solar Communities, with average individual grant awards of $80,000-$100,000.

“Every community solar project will be unique to the community which hosts it,” the report concluded. “However, this discussion has shown that many of the unique aspects which allowed the L’Anse project to achieve justice outcomes are replicable for other communities in states without supporting legislation.”