One of the main misconceptions about solar power is that it’s only affordable for rich environmentalists. But a new study shows how far off that notion really is.
Using U.S. census data and public solar installation records from California, Arizona, and New Jersey, the report from the Center of American Progress shows that 60% of home solar installations occur in neighborhoods with median household incomes that are between $40,000 to $90,000—solidly in the middle class.
We’ll get to some reasons why solar is becoming so popular with middle class home owners, but for now, take a look at this graph from the study to see the details of these numbers:
The same study also showed that from 2011 to 2012, the growth of solar installations in these three states also came from people with median incomes ranging from $40,000 to $50,000 in both Arizona and California and $30,000 to $40,000 in New Jersey.
Why Solar Is Growing So Fast in the Middle Class
While this latest study shows that the majority of solar installations in these states are coming from middle class homeowners, it does not go into the reasons why solar has become so attractive for these people.
Most industry analysts would credit the growth in middle class installations to the new ways to finance solar, namely with solar leases and solar PPAs. These two new solar financing methods allow homeowners in California, Arizona, and New Jersey, as well as Colorado, Oregon, and Hawaii to go solar with no upfront costs—and still get guaranteed savings off their utility costs.
The other draw to homeowners is that solar leases and solar PPAs don’t require a down payment. That means that you don’t have to dip into savings or get a loan, and you can reserve your home equity for emergencies. Meanwhile, the solar lease will still allow you to get 10% to 20% savings on electric bills with no upfront payment.
The other reason why middle class homeowners may be attracted to solar recently is that solar panel prices have come down in the last three years, and that’s reducing the overall installation cost for everyone. In fact, solar panel prices have come down 80% between 2008 and 2012.
For those middle class homeowners who have weathered the recession and seen their home equity return, solar now makes more financial sense than ever.