Climate change is a global problem. Greenhouse gas emissions, released from the burning of fossil fuels, are causing rising temperatures and extreme weather, impacting health, crops and wildlife. And developed countries with their cars, large houses and consumerism are some of the biggest polluters.
In the United States, the average emissions per person are some of the highest in the world at around 16.2 metric tons of CO2. According to the Environmental Protection Agency, the transport sector accounts for the largest share of the country’s greenhouse gas emissions (29%). The second largest cause is the burning of fossil fuels to create electricity, which follows closely behind at 28%.
Yet despite a recent poll finding that two-thirds of US citizens believe climate change is a crisis or serious problem, many are being thwarted in their quest to help the environment by a lack of access to green energy sources.
Around 80% of American homes can’t access solar energy.
Why the need for Solstice?
“I was working in India and Pakistan for a company bringing renewable energy to off-grid rural communities when I realised that most of these households were in a better position to obtain solar power than those in the United States,” says Steph Speirs, CEO and co-founder of solar energy company Solstice, based in Cambridge, Massachusetts.
“I realised I didn’t have to be halfway across the world to work on energy access issues, I could work in my own backyard.”
In 2015, having returned to the US from overseas, Steph co-founded Solstice with Sandhya Murali, who she met while studying for an MBA from MIT’s Sloan School of Management and Steve Moilanen, who she studied alongside at Princeton.
The idea was to help democratise access to green energy by identifying the obstacles preventing mainstream adoption of solar and finding ways to help.
“Solar was getting sexier in popular media,” says Steph. “The price was dropping dramatically – for the first time in history it could help people save money on their electricity bills – and yet, no one we knew had solar in their homes.”
The reasons Solstice found behind this lack of access were many and varied.
Some households were renters or lived in apartments and condos with no roof space, others might have a roof that faced the wrong way or was blocked by a tree … for many, money was the issue. A rooftop solar system in the US can cost anything from $10,000 to $40,000 upfront, depending on state subsidies.
This problem affected everyone, but low- and moderate-income households are disproportionately excluded from the financial and environmental benefits of solar.
The solar solution
Solstice came up with a way to address this problem, by offering what is known as community solar.
“Community solar allows you to buy a portion of a neighbourhood-shared solar farm and switch to solar that way,” explains Steph. “The electricity from the farm then flows back to the grid and people see a credit on their utility bill for the solar produced by their portion.”
The model means households can access solar power without any rooftop installation or upfront cost. Customers can also save 10% on every electricity bill.
In order to ensure those with lower credit scores can benefit from solar savings too, Solstice devised its own qualification standard, known as the ‘EnergyScore.
“People are often surprised to hear that your FICO credit score affects whether you can get solar or clean energy,” says Steph, describing the scoring system used by many creditors across the US since 1956.
“But if we’re only allowing access to people who have the right credit score, then we’re preventing more than half the country participating in the clean-energy revolution.”
Instead she says Solstice’s EnergyScore, which was created using extensive data analysis, is not only more inclusive but also more accurate at predicting who will pay their utility bills.
“Lower income households spend a larger percentage of their salary on energy bills and are more likely to suffer from the adverse effects of climate change including pollution and asthma,” says Steph. “Yet they’re disproportionately locked out of the clean-energy market.
“EnergyScore gives us the tools to make the energy industry more equitable and just, and we’re proud to have started using those tools in the market.”
While the EnergyScore is still in the pilot stage, large solar developers have already signed on to use the metric, and the idea is that it will be rolled out to other utility companies allowing more people to access green energy, while still being responsive to financier’s demands that projects are bankable.
In the large scheme of things, we’re trying to build a world where everyone can get access to clean energy and be powered by solar, regardless of the income they earn or type of roof they have.
The community effect
Focusing specifically on low-income access to community solar was Solstice’s main goal when it launched in 2015 as a non-profit. In 2017 it expanded to include a separate C corporation software and services company, meeting developer’s demands for a means to talk to customers and integrate utility accounts.
This expansion allows the company to deal with every aspect of the customer journey from enrollment to billing, using purpose-built software. The acquisition journey is based on techniques Steph learnt while working as Deputy Field Director for Obama for America, organising in seven states for the first Obama campaign.
Solstice signs up early adopters who can then become ambassadors who spread the word about community solar to their friends and neighbors. Community organizations, like houses of worship and nonprofits, can also partner with Solstice. They have the opportunity to raise money for their programs and connect their membership to clean and affordable energy.
This network effect is also having a positive impact on uptake.
“That’s actually been one of the biggest surprises,” says Steph. “I thought people would sign up for solar because they wanted to help the environment. There are definitely people doing that, but the vast majority sign up because it’s easy, affordable, they get a discount, and their friends are doing it.”
The future’s bright
Since Solstice launched, the community solar market has grown rapidly. Think tank Greentech Media, predicts that by 2030 the industry will be worth between $80 and $120 billion. And as the sector grows, so has Solstice. Staff numbers have more than doubled in the past four years and it’s recently signed a contract with one of the largest solar developers in the world.
“In the next five years, we want to help 150,000 households switch to community solar,” says Steph. “That will lead to millions of pounds of coal not burned and millions of dollars in savings for working, American families.
“In the large scheme of things, we’re trying to build a world where everyone can get access to clean energy and be powered by solar, regardless of the income they earn or type of roof they have.”
Plans for the future then, sound ambitious but achievable.
Steph Speirs is the CEO and co-founder of Solstice. To find out more about their work, visit the website.