Here’s how foundations are bringing solar to lower-income communities

The rooftop solar industry is booming, but far too few lower-income Americans are benefiting as a result. It’s a ​“modern version of redlining,” according to Joe Evans of the Kresge Foundation. Now an increasing number of charitable foundations are stepping up to redress that injustice, using a range of approaches to bring the benefits of solar to the communities that need it most. 

Thanks to foundations, more than 300 solar panels were installed in the Hopi and Navajo Nations in Arizona, creating jobs and providing reliable electricity to health centers, schools and other community buildings. A former coal mining area in West Virginia became a hub of solar development, with a comprehensive solar job-training program. Dozens of Wisconsin nonprofits received free solar panels, accelerating their shift to clean energy and boosting enthusiasm for solar in their communities. And 24 U.S. health centers in areas at risk for natural disasters developed solar systems with battery backup to supply power when the grid goes down.

The strategies and structures that enabled these projects varied widely. A recent report from the Clean Energy States Alliance, based on work funded by the U.S. Department of Energy, presents eight models that foundations are using to support solar and solar-plus-storage development in low- and moderate-income communities — each with a different combination of tactics, partnerships and financial approaches. These models include:

• Cost-reduction strategies, such as grants, regrants and donations of solar panels
• Market-building and financial-access strategies, such as loans, loan guarantees
  and equity investments
• Demand-side strategies, such as technical assistance funds and capacity-building
  programs

Foundations often maximize their impact by focusing not on rooftop solar for individual homes, but on solar installations for community-serving institutions such as health centers, affordable housing, senior centers and schools. 

Here are some of the models foundations are using and example projects they’ve undertaken. 

Donating solar panels

The Wisconsin-based Couillard Solar Foundation provides nonprofit organizations with solar panels. By purchasing panels directly and donating them to each grantee, Couillard achieves economies of scale from bulk purchasing, which lowers the overall cost of projects. ​“If someone came and asked for a bottle of water, you could give them a dollar to buy a bottle, or you could go buy 100 bottles at a much lower cost per unit,” said Sam Dunaiski of Renew Wisconsin, which manages Couillard’s grant programs. 

To amplify the foundation’s impact, the solar panels come with other support, including small grants for project development costs, technical assistance, and help raising funds for remaining project costs. 

Providing loans to project developers

The Kresge Foundation made a loan to Collective Energy, a for-profit project developer focused on solar and solar-plus-storage projects at federally qualified health centers that provide services in low-income communities. The developer maintains ownership of the solar array, and sells the electricity to the end user at a lower cost than utility power, through a power purchase agreement. This results in both savings and a resilient power system for the grantee, with no upfront costs or risk. Kresge’s loan to Collective Energy reduced the cost of capital for the projects, catalyzed other investments, and created a revolving loan fund that supported multiple projects. 

Technical assistance funding

The Surdna Foundation partnered with The Kresge Foundation to provide grant funding to nonprofit organization Clean Energy Group to launch a technical assistance fund to help community organizations evaluate the potential for solar-plus-storage installations at critical community facilities in underserved communities. This fund has provided over $1 million in technical assistance awards over the past nine years, supporting nonprofits, affordable-housing developers and providers, and others serving low-income communities, environmental justice communities, and communities of color.

“Resilient power is essential to supporting community-based organizations in their efforts to maintain critical services through a power outage — but it also can result in economic returns and set a precedent for investment in, and local ownership of, clean energy resources in underserved communities,” said Marriele Mango of the Clean Energy Group.

Regranting

The Bezos Earth Fund provided major funding to The Solutions Project, a regrantor or intermediary with the capacity to distribute relatively small grants to grassroots organizations in low- and moderate-income communities. While The Solutions Project’s outgoing grants were unrestricted, many of the grantees used the funding for solar projects, including Soulardarity in Michigan, PUSH Buffalo in New York, and Thunder Valley Community Development Corporation in the Lakota community in South Dakota. 

The regranting strategy is available to funders and donors of all sizes as a way to support grassroots solar development, build energy independence and support climate resilience. Critically, it allows large foundations to outsource the deep engagement and administrative tasks entailed by working with myriad small nonprofits, putting their funds to work in a more localized way.

Capacity building

The Honnold Foundation, which is focused on bringing solar to frontline communities, provided multi-year unrestricted grant funding to the nonprofit project developer Native Renewables. The funds were used to develop off-grid solar projects in the Navajo and Hopi Nations, creating new financial structures to keep the cost of solar within reach, as well as providing job training and leadership development. Native Renewables is an Indigenous-led organization with a mission to bring solar power to 15,000 homes and to educate Native communities about renewable energy. By providing an unrestricted grant, the Honnold Foundation used a trust-based philanthropy model, empowering Native Renewables to determine how the funding was used while also supporting the group’s capacity and leadership.

During the grant period, the Honnold Foundation launched its Levine Impact Lab to provide capacity building to its grantees. The lab offers a broad suite of resources and assistance tailored to nonprofits’ needs.

“Solar isn’t the end, it’s the means to the end,” said Kate Trujillo of the Honnold Foundation. ​“And that end is community development and a community thriving with using their own solutions. So oftentimes that looks like a solar installation plus some job training, plus some education, plus some maintenance training, all of these things that are layered on top of one another.”

Like many other energy-saving and wealth-building opportunities, solar power has not been equally accessible to all Americans — but thanks to foundation initiatives like these, that’s starting to change.