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PosiGen shows the market how to deploy single-family solar solutions with equity

Environment, Social Investment Practice

Communities with low income and communities of color throughout the U.S. are far less likely than others to enjoy the benefits of solar power. One of the biggest drivers of this disparity is that most solar companies use credit scores to determine who can finance the upfront cost of adding solar units to their homes, a decidedly inequitable practice.

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Most solar equipment is leased, and a reliance on credit scores leads mainstream solar installers to target wealthy homeowners in majority-white neighborhoods and ignore communities where average credit scores may be lower. This approach results in renewable energy redlining, leaving homeowners in already disinvested communities and communities of color unserved, perpetuating long-term cycles of disinvestment and missing opportunities to increase solar generation and its environmental and financial benefits.

PosiGen takes a different approach. Based in New Orleans, PosiGen is committed to scaling solar power and to helping homeowners with low incomes reduce their energy bills. In addition to leasing solar panels, the company works with its customers, free of charge, to improve the energy efficiency of their homes, which increases their energy savings as well as the comfort and value of their homes.

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Gernard Eaddy poses with a sign explaining why he went with PosiGen.

Unlike most solar companies, PosiGen determines customer eligibility based not on credit scores but rather on the cost savings that will result. An estimated 75% of PosiGen customers are homeowners with low- or moderate-income. And PosiGen approves new customers only if it can guarantee immediate and ongoing savings over the course of the 20-year solar lease.

That is one reason Kresge has made a $5 million program-related investment into PosiGen. The capital infusion will help PosiGen continue its rapid growth in NOLA, a Kresge focus city, as well as other parts of Louisiana, Connecticut and New Jersey. It will also help them to expand to additional markets.

The investment is a collaboration between Kresge’s Social Investment Practice and Environment Program. Kresge was attracted to this opportunity in part because of PosiGen’s history of intentional community partnership. PosiGen works closely with local community organizations, and it hires installers and other staff from the communities where it works. All full-time PosiGen employees earn a living wage and are eligible for company-subsidized health insurance.

PosiGen also shares Kresge’s commitment to racial equity, and it prioritizes Black and Brown communities; 50% of the company’s customers are people of color. At Kresge, we’re working to combat environmental racism, and this requires understanding and seeking to reverse the history of residential segregation and disinvestment in communities of color.

For a multitude of reasons, including decades of redlining, Black and Brown communities face disproportionate impacts of our changing climate, including more intense heat waves, increased flooding, more frequent power outages, and higher levels of air pollution. These communities also have less access to the resources and tools, including solar energy, that can help them mitigate and prepare for the effects of climate change. PosiGen is taking a crucial step to help fill this void and make the business case that others should as well. PosiGen’s model brings multiple benefits to communities, as residents with low income gain access to solar energy, electricity bills go down, environmental benefits go up, and the local economy grows.

While PosiGen is unique, we know we need much more activity like this in the renewable energy market. Low-income homeowners and communities of color are eager to reduce their carbon footprints and take advantage of the benefits of renewable energy, and the market must open new pathways that invite and enable them to do so.

All people in every city should be part of the renewable energy transition. PosiGen can inspire and inform others looking to ensure that low-income communities and communities of color are not left behind but instead are helping to drive, and benefit from, that transition.

Jessica Boehland is a senior program officer on Kresge’s Environment Program. Follow the team @kresgenviro

Kresge staff is working remotely, and our offices are closed until further notice.  See our promise to partners during COVID-19.
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