The city of El Paso could receive as much as $100 million from the federal government to develop solar projects for thousands of low-income households and renters across the region after City Council on Tuesday approved the grant request. 

The city is looking to get a slice of a $7 billion “Solar for All” fund established through the federal Inflation Reduction Act, which Congress passed last year. The Solar for All program will award 60 grants of different sizes to enable local governments to provide access to solar power to low-income residents. 

“Our intention is to serve somewhere between 7,500 and 10,000 households from Hudspeth County to Dona Aña County,” said Nicole Ferrini, who leads the city’s Office of Climate and Sustainability, which applied for the grant. 

To make its application proposal more competitive, the city applied for the funding along with other counties across the region, which lack the staffing and resources of El Paso’s city government. 

The city’s ultimate goal is to lower monthly energy bills by at least 20% for local renters and homeowners. And the solar grant proposal is part of the city’s broader plan to address climate change in the region by slashing emissions and air pollution and relying more on zero-carbon energy. Voters last November approved giving Ferrini’s department $5 million to craft a comprehensive climate action plan over the next year or two. 

If the Environmental Protection Agency awards El Paso the $100 million grant, the city’s main program includes installing rooftop solar panel systems on 4,000 to 5,000 households throughout the area. Today, roughly 30,000 El Paso Electric customers – about 7% of the utility’s total – have installed solar panels. 

“$100 million dollars is transformative for our community,” said Ferrini, who called the rooftop solar component of the grant request “the most exciting.”

Assuming the city receives the grant money to install rooftop solar systems, the city’s first step would be to examine an applicant’s home and see if the roof can hold solar panels or if the home needs energy efficiency upgrades like insulation, for example. Then the city would pay to install the panels. 

“This idea that we can take low-income, disadvantaged and single-family households, and dramatically reduce their energy bills – that is more effective at combating poverty than anything else,” Ferrini said. 

In addition to paying for rooftop solar, the city is also seeking to develop solar panel systems at apartment complexes owned by regional housing authorities. Typically, apartment complexes are solar-ready – they don’t need additional upgrades – and each renter would receive solar energy and see lower electric bills. 

“We’re going to be able to reach more households with a single installation,” Ferrini said. “The property owner – in this case, the housing authorities – would own the asset. But the benefit of the energy savings would go directly to those residents, because those (apartment units) are individually metered.”

For the last part of the city’s solar proposal, it would work with El Paso Electric to build a 5 megawatt community solar farm. 

Here’s how community solar works: An El Paso Electric customer can pay a monthly fee to “rent” a portion of the panels at a utility-owned community solar farm, and the customer receives a credit on their electric bill for the power that the customer’s panels produce. 

The idea behind community solar is to give access to solar energy to customers who can’t install solar panels, such as renters, or people who don’t want to make a big upfront investment to buy their own solar panel system. 

EPE – which serves a region spanning from Hatch, N.M. east to Van Horn, Texas – currently operates two solar farms totaling 5 megawatts that are dedicated to community solar. About 2,260 customers are enrolled in the utility’s program, and another 600 customers are on a waitlist. EPE said federal funding for an additional community solar farm would “increase solar energy access in low-income and disadvantaged communities” across the area. 

“El Paso Electric is proud to support the opportunity to expand our existing community solar program and increase its availability to customers through the City of El Paso-led initiative for the US EPA’s Solar for All grant application, alongside various regional partners,” EPE said in a statement. 

If the city wins the grant it would not only fund construction of the solar farm, but the city would also pay the fees that EPE charges customers to rent panels at the solar farm. 

“That way, they’re not actually absorbing what would normally be the cost of community solar,” Ferrini said, adding that the community solar farm would ideally serve around 2,500 residents. 

“The grant requires that we reduce energy bills by a minimum of 20%,” she said. “By coming in with solar in the way that we are at 100% subsidy for these families – they’re not paying for it – we’re taking their bills down a lot lower than 20%.”

But El Paso households that have solar panels don’t see their electric bills fall to zero. Even if a home’s rooftop solar system produces more power in a month than the household uses, El Paso Electric charges customers who have rooftop solar systems a minimum bill of $30.25 per month. 

EPE’s minimum charge means customers stand to save less on their power bills if they install solar panels. But EPE argues it must collect some level of revenue from customers with rooftop solar systems, who still use the grid – by receiving power at night or when the panels aren’t producing – but absent the minimum bill wouldn’t be paying their fair share of the cost of grid upkeep. 

Ferrini said the economics of rooftop solar still pencil out in El Paso even with EPE’s minimum bill, which is one of the largest for rooftop solar customers of any U.S. utility. 

For example, assume a household pays a $100 monthly electric bill. If the city installs solar panels at the home that drive its power bill down to $20 per month, with the minimum charge that customer would pay a $50 bill for electric service. That’s still a 50% energy bill savings despite EPE’s minimum solar bill, Ferrini said. 

Lowering a household’s energy bill by 20% “is not that challenging, given what people are paying for energy right now,” she said. 

The city will learn next March if the EPA plans to award it the solar grant. Should the city win, Ferrini said her office would coordinate with community groups such as Project Bravo and local promotoras to prioritize applicants based on need.  

Using solar to lower a home’s energy costs “frees up that capital for that household, which they can then use for whatever they want,” Ferrini said. “This is a way that we’re addressing poverty directly.”