By many traditional economic indicators, the American economy is thriving. Big businesses and investors have seen profits rise. So why are American families still struggling? The high costs of basic necessities like energy, groceries, and rent force families to overstretch their budgets. The fact is, big corporations and the policymakers who listen to them have tried to structure our markets to benefit themselves and the wealthy few, while leaving regular families to suffer. But governments and communities can change this right now, by taking advantage of a once-in-a-generation federal law called the Inflation Reduction Act (IRA), designed to help people and families facing an affordability crisis in today’s economy.
As an ideas advocacy organization, Economic Security Project (ESP) is collaborating with communities and local governments, like the NYC Office of the Comptroller, to find creative ways to use the landmark IRA to supercharge public options as interventions to build up historically overlooked communities, make an equitable transition to clean energy, increase access to everyday necessities, and shape markets to work for everyone.
Public options are government-run public goods and services that exist alongside private options, stimulating competition among providers, and empowering families by expanding their choices and offering them affordable alternatives in the market that respond to their needs. Public options have also been around for a long time, from libraries to airports to the post office.
New York City is leading the way by leveraging the IRA to create a public option called Public Solar NYC, to give New Yorkers access to affordable clean energy. Public Solar NYC uses the IRA’s new direct pay provision and “Solar For All” grant program to establish an affordable public option for rooftop solar. Public Solar NYC will offer pathways to solar with no upfront costs to residents by leasing the rooftops of low-income homeownership (with grants for roof and electrical upgrades where necessary), and then financing and installing rooftop solar arrays whose benefits will be shared with homeowners and residents. By creating economies of scale and streamlining the process of solar development, Public Solar NYC will lower installation costs and accelerate for solar adoption, particularly for low-income residents who have historically faced barriers to solar.
Public Solar NYC underscores the power of local government to create and scale public options that are sustainable and equitable. The City has submitted an application for IRA “Solar For All” grant funds that, if awarded, will be layered alongside IRA direct pay to serve as catalytic capital to initiate a pilot round of the program. After the pilot phase, we anticipate that municipal bonds will subsequently be used to provide low-cost debt and revolving credit to sustain the program. The City will also leverage its procurement power to embed strong labor standards for installing solar by collaborating with workforce development partners to prioritize first-look hiring in frontline communities and ensure that green jobs are good jobs.
The expected gains include energy cost savings for both the City and residents who are already stretching their hard-earned paychecks; thousands of good green job opportunities with high labor standards; and a new accessible and affordable public option in the market to stimulate a just climate transition–generated through the power of local government.
We have a significant opportunity today to scale public options that are responsive to community needs across the country, from rural to urban areas. But local communities and governments alone cannot complete the work of fixing market failures and creating an economy that serves all people. Through partnerships between advocacy organizations and local and state government leaders, like this collaboration between Economic Security Project and the NYC Comptroller, we can build the resources, cross-sector connections, and implementation assistance needed to create interventions like Public Solar NYC, that harness IRA funding into creative and effective public options, whether they be for grocery stores to increase food access, or public banks to provide pathways to financial citizenship.
By charting a course with governments and communities, we can collectively shape an economy where everyone can thrive.
Learn more about Public Solar NYC here: https://comptroller.nyc.gov/services/for-the-public/confronting-the-climate-crisis/public-solar/
Learn more about Economic Security Project’s Public Options work here: https://economicsecurityproject.org/news/public-options-bring-the-public-back-into-governance/