Solar energy is often thought of as a solution available only for those who can afford it. Policymakers often overlook solar thermal technologies when crafting solar policies. But both of these realities are changing.

In their search for all-of-the-above energy strategies, states are looking to solar thermal technology as a solution to lower utility bills and green the energy supply. These new solar policies are not only expanding opportunities for solar thermal deployment, but are also able to bring solar energy to low-income communities.

A new bracket for solar

Across the country, states have put policies into place that help speed the adoption of solar thermal. The California Solar Initiative’s Thermal Program (CSI Thermal), created by legislation (A.B.1470) in 2007, was tasked to facilitate the mainstream adoption of solar thermal technologies across California homeowners and businesses. It was given a 10-year mandate and over $300 million to achieve its goals.

Among its offerings are grants for eligible projects, public marketing and training classes. This program includes $25 million in incentives set aside for solar water heating systems on low-income multifamily buildings. To date, this sub-program has been one of the most successful parts of CSI Thermal.

Outside of California, the leading solar thermal markets are, in fact, in the mid-Atlantic states. In Maryland and the District of Columbia, solar thermal systems are part of the solar carve-outs in their respective renewable portfolio standards. Solar thermal systems earn solar renewable energy credits, just as solar PV.

The creative Sustainable Energy Utility (SEU) model has spurred solar thermal markets further. The Delaware SEU, which is the first of its kind in the country, launched its own solar thermal incentive program, geared to commercial-scale systems and funded through proceeds from the Regional Greenhouse Gas Initiative. The D.C. SEU operates several low-income solar programs.

Northeast states, such as Massachusetts, are beginning to see the light when it comes to the value of solar thermal technologies as part of clean energy policies. There are now plenty of examples of effective solar thermal policies for other states to follow.

Perhaps the most important aspect of the new wave of solar thermal policies is their ability to attract private financial capital to the industry. Leases and power purchase agreements are now viable options beyond the simple capital purchase.

The new modes of financing are especially valuable with low-income multifamily housing facilities. While the entire industry can benefit by overcoming traditional first-cost sales barriers, it is especially true when solar thermal developers work with low-income housing developers.

These organizations, especially the not-for-profit management companies, have very limited access to their own capital. Solar developers’ ability to bring in their own financing leads to these low-income housing communities benefiting from solar energy at little-to-no upfront cost.

Investment spurs growth

The effective solar thermal programs in the U.S. allow solar developers to leverage those public incentives in order to provide their customers, especially low-income communities, with solar energy at a minimal cost.

These policy investments have helped to increase the pipeline for solar thermal projects. This increased pipeline is allowing new companies to come into the solar space. It is also allowing existing companies to expand their service offerings.

So, a company that started as a PV installer can add solar thermal to its offerings. Solar thermal expansion isn’t limited to just solar firms. Roofing and heating, ventilation and air-conditioning companies have seen these policy incentives as a reason to add to their service offerings as well.

Policy frameworks are important to these small businesses. They depend on policy consistency to make hiring decisions.

An example of how smart policy environments and solar hot water can work together was completed recently in California. There, Nextility partnered with affordable housing developer AMCAL to finance and install a 24-collector solar hot water system on its multifamily Maywood Villas property in Los Angeles. The senior affordable housing property consists of 54 units. This was one building in an 11-building deal.

After the engineering and design phase, the system was placed in service in August 2013. California’s Solar Thermal Program helped the project receive 100% of its’ financing up front. This financing covered project development services and ongoing operations, maintenance and monitoring of the roof-mounted solar hot water system that offset the building’s use of natural gas for domestic hot water.

With California and the mid-Atlantic leading the way on solar thermal policy, other states will look to follow suit. This will only increase the potential for private investment in solar thermal projects and the ability for low-income communities to adopt solar thermal in an affordable manner. The democratization of solar is under way. S

Mike Healy is vice president of marketing development and policy at Nextility, an energy technology company and commercial-scale solar electric and thermal developer based in Washington, D.C. He can be reached by email at info@nextility.com.