Pictured above: Solar arrays atop Cedar Street Apartments, a 30-unit affordable multifamily community in Ward 4 Washington, DC;
Developers: Wesley Housing and Joseph Development Inc.
Incorporating Solar into Affordable Housing Communities
Affordable housing communities often struggle with high energy costs, making it challenging for residents to pay their bills and maintain comfortable living conditions. However, incorporating solar energy into these communities can provide a sustainable and cost-effective solution. By installing solar panels and implementing energy-efficient practices, affordable housing communities can significantly reduce energy costs and promote environmental sustainability.
Improved Energy Efficiency: Incorporating solar energy can improve energy efficiency, which can also help reduce energy costs. According to the U.S. Department of Energy, energy-efficient upgrades can reduce energy consumption by up to 50%.
Why Incorporate Solar into Affordable Housing Communities?
Affordable housing projects can now incorporate solar due to the availability of increased public funding sources. This enables both housing developers and underserved communities to benefit from solar technology. The growing interest in environmental, social, and governance (ESG) aspects of investment has also made integrating renewable energy into affordable housing projects beneficial for developers, municipalities, and end-users in terms of sustainability.
“Wesley Housing is looking at solar installations on all of our new projects,” said Wesley Housing’s Senior Project Manager, Jared Lang. “With the changes from the passage of the Inflation Reduction Act in 2022, we can cover almost 100% of the upfront cost of our solar installations—making it a great investment for us.”
Wesley Housing, a leading nonprofit affordable housing developer in Northern Virginia and the District of Columbia, is completing its second affordable housing community with solar energy features, The Hampshire, in May 2023. The Hampshire, a 56-unit multifamily historic property in the walkable Ward 4 neighborhood of Fort Totten in Washington, DC, will provide 70 kilowatts of solar capacity on the community’s rooftops at no cost to the property. This will supply the building’s common area electricity usage, reduce overall operating costs, as well as provide electricity bill savings and local incentives worth approximately $40,000 per year.
Pictured above: The Hampshire, a 56-unit affordable multifamily historic community in Ward 4 Washington, DC; Developer: Wesley Housing; Photo Credit: Keith Pham
In general, the deployment of solar in affordable housing projects can extend the advantages of renewable energy to all communities, especially those that have traditionally been marginalized. When coupled with robust carbon reduction and renewable energy policies, the case for solar in affordable homes becomes even more compelling.
Additionally, incorporating solar energy can help reduce energy costs for residents, which can be a significant burden in affordable housing communities. By generating electricity from solar panels, residents can reduce their reliance on traditional energy sources, such as coal and natural gas, which can be expensive.
Furthermore, incorporating solar energy can improve energy efficiency, which can also help reduce energy costs. By implementing energy-efficient practices, such as installing insulation, replacing old appliances with energy-efficient ones, and using LED light bulbs, affordable housing communities can significantly reduce their energy consumption.
Washington DC is an ideal location for incorporating solar into affordable housing communities for several reasons. For one, DC neighborhoods have a strong commitment to renewable energy and have set ambitious goals for reducing its carbon footprint. In fact, DC has one of the most aggressive renewable energy goals in the country, aiming to generate 100% of its electricity from renewable sources by 2032.
Additionally, DC offers several incentives and programs that support the development of solar energy, including tax credits, rebates, and grants for solar installation. DC also has a vibrant solar industry, with many local solar companies and installers that can provide expertise and support for affordable housing communities interested in incorporating solar.
Benefits of Incorporating Solar Energy
Incorporating solar energy into affordable housing communities can provide numerous benefits, including:
- Reduced Energy Costs: Solar energy can significantly reduce energy costs for residents of affordable housing communities. By generating electricity from solar panels, residents can reduce their reliance on traditional energy sources, such as coal and natural gas, which can be expensive. This can provide a significant financial relief to low-income households, making it easier for them to pay their energy bills and maintain comfortable living conditions.
- Improved Energy Efficiency: Incorporating solar energy can also improve energy efficiency, which can further reduce energy costs. By implementing energy-efficient practices, such as installing insulation, replacing old appliances with energy-efficient ones, and using LED light bulbs, affordable housing communities can significantly reduce their energy consumption.
- Environmental Sustainability: Solar energy is a clean and renewable energy source that does not produce harmful emissions of pollutants. By generating electricity from the sun, solar energy can significantly reduce carbon emissions, which contribute to climate change. Incorporating solar energy into affordable housing communities can therefore promote environmental sustainability and help reduce the impact of climate change.
- Government Funding: The federal government has provided significant funding for solar installations in affordable housing communities. This funding can help make solar energy more accessible to low-income households, who may not have the financial resources to install solar panels on their own.
- Increased Property Values: Incorporating solar energy into affordable housing communities can also increase property values. According to a study by the Lawrence Berkeley National Laboratory, solar installations can increase property values by an average of $15,000. This can provide a financial benefit to affordable housing communities and help attract more investment in the future.
Limitations of Incorporating Solar into Affordable Housing Communities
While there are many benefits to incorporating solar energy into affordable housing communities, there are also some limitations to consider including:
- Upfront Costs: While solar energy can ultimately reduce energy costs for affordable housing communities, the upfront costs of installing solar panels can be a significant barrier. The cost of solar panels and installation can be expensive, which may be difficult for low-income households to afford. This can make it challenging for affordable housing communities to finance the initial installation costs.
- Site Limitations: Not all affordable housing communities are suitable for solar energy installations. Some buildings may not have enough roof space to accommodate solar panels, or they may be located in areas with insufficient sunlight exposure. In these cases, incorporating solar energy may not be a feasible option.
- Maintenance Costs: Like any other type of equipment, solar panels require regular maintenance to operate at peak efficiency. Maintenance costs can add up over time, and affordable housing communities may not have the resources to maintain the panels regularly. This can lead to reduced energy efficiency and increased energy costs over time.
- Local Regulations: Local regulations and zoning laws can limit the installation of solar panels in some areas. This can make it challenging for affordable housing communities to incorporate solar energy into their buildings.
- Energy Storage: Solar energy is generated during the daytime when the sun is shining. Without energy storage systems, excess energy generated during the day cannot be stored and used at night when electricity demand is higher. The cost of energy storage systems can be a significant barrier, making it challenging for affordable housing communities to store excess energy for later use.
Steps to Incorporate Solar into Affordable Housing Communities
Incorporating solar energy into affordable housing communities requires careful planning and coordination. Here are the steps that should be taken to incorporate solar energy into affordable housing communities:
- Conduct a Feasibility Study: The first step in incorporating solar energy into affordable housing communities is to conduct a feasibility study. The study should evaluate the site’s potential for solar energy, including the amount of sunlight received, the available roof space, and the cost of installation.
- Obtain Funding: The second step is to obtain funding for the solar installation. There are several funding options available, including government grants and tax credits, private financing, and community fundraising.
- Choose the Right Solar Technology: The third step is to choose the right solar technology. There are several types of solar technologies available, including photovoltaic (PV) panels and solar water heaters. The choice of solar technology should depend on the specific needs of the affordable housing community.
- Work with a Solar Installation Company: The fourth step is to work with a solar installation company to design and install the solar panels. The company should have experience working with affordable housing communities and be able to provide maintenance and repair services.
- Educate Residents: The final step is to educate residents on how to use the solar panels and the benefits of solar energy. This can be done through community meetings, workshops, and educational materials.
Incorporating solar energy into affordable housing communities can provide numerous benefits, including reduced energy costs, improved energy efficiency, and promoting environmental sustainability. However, it requires careful planning and coordination to ensure a successful installation. By following the steps outlined above, affordable housing communities can incorporate solar energy and provide a sustainable and cost-effective solution for their residents.
Written by Grant McDonald: Grant McDonald is vice president-corporate development at 14th Street Capital. He has 30+ years of experience in the real estate industry and 11 in real estate finance.