After five years of rejections, revisions, appeals, and resubmissions, a Cape Cod energy organization has received state approval for a first-of-its-kind pilot program providing a package of solar panels, heat pumps, and battery storage to low-income households.
The program, called the Cape and Vineyard Electric Offering, will provide all three technologies, free of charge, to 25 low-income homes in the region. Another 75 homes — a mix of low- and middle-income households — will get whole-home heat pumps and solar panels, as well as advice on financing a battery purchase if desired. The program is expected to roll out to the public in April.
“It’s a relief and a great sense of satisfaction in being able to serve a customer group that has been underserved,” said Maggie Downey, administrator of the Cape Light Compact, the regional energy organization behind the plan. “You can’t just electrify those homes that are owned or lived in by people of means — you have to include a path forward for every demographic in the commonwealth.”
Supporters have cheered the long-awaited approval of the program, but say the protracted process to get to this point demonstrates the need for the state to be more assertive in its attempts to lower emissions.
“It should have been approved a long time ago,” said Caitlin Peale Sloan, vice president for Massachusetts at the Conservation Law Foundation. “It should have been saving their customers money for years at this point. It took years of work to try to get this thing which should have been a no-brainer.”
Massachusetts is widely considered a national leader in promoting renewable energy and energy efficiency. The state has longstanding incentives for the adoption of solar panels and has recently increased its rebates for home heat pumps. Many homeowners with battery storage can enroll in utility programs that will pay them for sending power to the grid during times of peak demand.
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Studies show, however, that all of these technologies are far less likely to be adopted by low- and moderate-income residents, despite their potential to cut costs for those who use them. The upfront price is often too high and many homes might need expensive upgrades before equipment can even be installed.
“The whole challenge of getting these technologies into homes is not technical, it’s financial,” Sloan said. “We need upfront money and very few people can provide upfront money on their own.”
A long road to approval
The Cape Light Compact’s plan was designed to help address this major obstacle.
The compact, founded in 1997, is a unique regional organization that includes 21 towns on Cape Cod and Martha’s Vineyard. It negotiates power purchases for members, administers the state-mandated energy efficiency programs offered in the region, and participates in the development of the state’s three-year energy efficiency plans.
The organization first proposed a package of solar panels, heat pumps, and batteries in 2018. Since the beginning, the goal has been to use the three technologies together to amplify their impact in cutting energy costs for residents and reducing greenhouse gas emissions, with a focus on helping the low- and moderate-income households in which energy costs are a more significant burden.
In Barnstable County, which includes the 15 towns that make up Cape Cod, the average household pays 4% of its income to energy costs, according to data from the U.S. Department of Energy. That percentage goes up as household income drops: Households making less than a third of the area median income spend an average of 27% of their income on energy.
“If you dig into the statistics around how much more people of low and moderate income pay of their overall income to utilities, it’s overwhelming,” said Megan Amsler, the executive director of Self-Reliance, a Cape Cod-based consumer energy nonprofit. The compact plan “is a fabulous way to help people stay in their homes and control their energy costs.”
This first plan was rejected on the basis that the compact had not engaged enough with stakeholders and that it needed to do more to leverage existing incentives and funding sources. The proposal was revised and resubmitted in 2020, and was also included in the draft energy efficiency plan that was filed with the Department of Public Utilities in November 2021.
The state also rejected this version of the proposal, claiming that the plan would violate state laws regarding the use of energy efficiency funding by supporting technologies that do not improve efficiency — specifically solar panels — and that it would have uncertain financial impacts. The compact and supporters of the plan said this argument represented a misunderstanding of state law and filed an appeal, but still overhauled the plan once again.
In 2022, the state legislature included language in its wide-ranging climate bill making it explicitly clear that state efficiency funds could be used to support projects that combine renewable energy generation, energy efficiency, and strategic electrification. State public utilities regulators approved the latest iteration of the plan in January with a maximum budget of $6 million.
A model for the future
The Cape Light Compact is now in the process of finalizing partnerships, drawing up documents, and developing outreach strategies. The goal is to launch the program next month and have installations complete by the end of 2024, Downey said.
In all, the program will be open to 80 deed-restricted affordable homes, which will receive solar panels and whole-home heat pumps, free of charge. Twenty-five of these participating households will also receive two batteries. Another 20 market-rate homes will be included, and provided with financing and incentives to lower the cost. Participating homes will transition off fossil fuels entirely, replacing cooking stoves with electric appliances in addition to installing solar panels and heat pumps.
Supporters hope the program becomes a model that can open doors to wider rollouts in coming years, though obstacles remain. The lengthy approval timeline for this first program demonstrates the way regulators’ narrow interpretations of the law have routinely impeded progress toward climate and equity goals in the state, advocates said.
And the order approving the Cape Cod pilot includes a provision that effectively bars other utilities from adopting similar programs until the results of the compact’s efforts have been reported and analyzed.
“That’s just not going to cut it,” Sloan said.
She is, however, optimistic that the new administration of Gov. Maura Healey will take more aggressive action. Healey has repeatedly named climate and clean energy as among her priorities, and her administration recently named two new people to the three-person commission that oversees the Department of Public Utilities, emphasizing the new appointees’ dedication to transparency, equity and innovation.
Still, real and equitable progress toward decarbonization is going to require a significant shift in attitudes, regulations and spending, Downey said.
“Achieving our climate goals in the commonwealth is not going to come cheap,” Downey said. “If we don’t bring very rich incentives for our low- and moderate-income customers, they’ll be left behind.”
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