Kresge Foundation makes a $3 million commitment to solar + storage development in disadvantaged communities
The Kresge Foundation, Clean Energy Group (CEG) and New York City Energy Efficiency Corporation (NYCEEC) announced groundbreaking $3.3 million commitment this week – through a Kresge loan guarantee and connected grants – to accelerate the market development of solar PV plus battery storage (solar+storage) technologies in historically underserved communities.
The Foundation’s investment represents the first time a U.S. foundation has committed to use both its grantmaking and endowment resources in a comprehensive strategy to bring these new clean energy technologies to affordable housing and critical community facilities in low- and moderate-income neighborhoods. NYCEEC is the lender selected to participate in the loan guarantee initiative. CEG will manage the effort.
Low-wealth communities rarely have access to cutting-edge technologies that reduce the impacts of climate-related emergencies, even though statistically they are the most vulnerable. Solar+storage technologies ensure these populations don’t lose power during blackouts, keeping homes cooled, oxygen tanks running, and food accessible. This investment will allow more urban communities to access funding for these projects.
The multiyear financing program consists of three innovative elements:
• A $3 million loan guarantee to reduce credit risk for solar+storage projects in low- and moderate-income areas. Structured as a 50 percent payment guarantee to help ensure borrowers’ loan payments remain current, this innovative credit enhancement is designed to substantially reduce the risk of a payment default to lenders and their investors who provided capital for solar+storage loans. The guarantee is booked as a reserve on the foundation’s endowment until such time as a demand for payment is made under a specific guaranteed loan transaction, which then takes the form of a program-related investment.
• $170,000 in a capacity-building grant to accelerate the participating lender’s ability to finance solar+storage projects, build project pipelines and actively engage in information sharing.
• $120,000 in technical-assistance grants to enable eligible project owners and developers to assess the technical and financial feasibility of new solar+storage projects.
This financing program is designed to make the market development of new solar+storage technologies more equitable. Solar+storage can provide clean, affordable, and resilient power – benefits that are most important to underserved populations, but which, due to up-front cost barriers, are largely out of reach.
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