Income Verification Strategies for Income-Based Solar Programs

The Inflation Reduction Act has created substantial new programs that support adoption of solar power by low-income households, including the $7 billion Solar For All program and the Low-Income Communities Bonus Credit Program, which increases the investment tax credit for certain types of deployment. In addition, a growing number of states are using solar programs to reduce energy burdens and create energy justice opportunities for low-income households and disadvantaged communities.

Verifying the income of participating customers is an important component of these programs. Program managers are seeking strategies to verify a large number of subscribing customers in an accurate, timely, and cost-efficient manner.

To help inform program managers, Berkeley Lab investigated how a number of energy and non-energy programs manage income verification. The most common approach is to require proof through tax documents, pay stubs, or other formal income documentation, which can pose an impediment to enrolling eligible customers and create a paperwork burden for administrators. In order to reduce the burden for both the applicant and the program manager, some programs use alternative methods. We identify three common alternative verification methods:

• Categorical eligibility: Customers enrolled in other, similar income-verified assistance programs are automatically eligible for enrollment in other income-qualified programs.
• Geographic eligibility: Eligibility is based on the customer’s location within a specified area, typically a low-income or disadvantaged community or census tract, and;
• “Self-attestation”: The participant claims eligibility with or without further documentation.

We describe these options, their pros and cons, give examples of how they are used, and explore how some low-income programs address administrative issues, audits, or other quality control measures. Finally, we explore the risk of mistaken verifications (finding a participant eligible when they are not) in the different strategies.

While this memo was initiated by a request relating to income-based community solar programs, the methods are applicable to any program with income eligibility requirements in the energy or non-energy sector.

Funding was provided for this research by the Solar Energy Technologies Office of the US Department of Energy, through the National Community Solar Partnership.