In recent years Solar Energy has become a very popular topic, the interest in participating in Solar has increased a lot, among the different ways to participate in Solar, there is one new option which is “community solar”, this option allows to every American household access to solar energy.
Although this is one of the easier ways to participate in solar there is a couple of barriers, the main barrier is relative to the FICO score, most community solar projects have minimum credit score requirements in the 650-700 range. This is because solar investors want make sure that they will see a return on funds that they dole to develop each new a project. Solar developers use credit scores as a way of giving them this assurance—even though credit scores are a highly imperfect way of predicting households’ energy bill payment behavior.
To solved this problem a new score has been created, conceived by Sostice, the EnergyScore is a scalable way to increase the inclusivity of community solar farms.
Solstice a company founded on the conviction that community solar could help build a more equitable energy system, has invented the EnergyScore, an alternative way of qualifying people for community solar farms that is more accurate in predicting people’s utility bill payment behavior and more inclusive of low-to-moderate income households than the FICO credit scores that are typically used to qualify people for projects. The goal is really to make it as easy as possible for everyone to participate in these projects, regardless of their background, or how they’re coming to the table.
Leveraging utility payment history and other customer data, the EnergyScore aims to provide solar developers with a metric that is more accurate and inclusive than FICO credit scores in predicting the rates at which subscribers default on their bill. If it fulfills these goals, solar developers will be motivated to adopt the EnergyScore because it expands their customer pool and lowers customer turnover rates—and more importantly, a higher proportion of LMI individuals will be qualified to save with community solar. It’s a win-win.
Early results are positive: after analyzing nearly 875,000 customer records, Solstice and its partners at MIT and Stanford have produced a final version of the EnergyScore. Customer data suggest that it represents a 40% accuracy improvement over FICO in predicting utility bill payment behaviors and is 10% more inclusive of LMI households. Solstice is currently seeking partners to carry out low-income focused pilot projects to test and refine the metric.