Last spring when the Environmental Protection Agency (EPA) announced its framework for the $27 billion Greenhouse Gas Reduction Fund (GGRF) — part of a set of historic climate investments through the Inflation Reduction Act — it included a $7 billion carve-out for residential and community solar in low-income and disadvantaged communities. This funding program, known as Solar for All (SFA), awarded grants to states, tribal governments, municipalities, and nonprofits in April 2024. It has the potential to significantly extend the benefits of solar to people with low incomes, expand the residential solar market, create new models for community solar, and drive local and state-level policy change while broadening overall support for renewable energy.

Doris Brown with her solar system, photo courtesy of Solar United Neighbors.

In the US South, where energy burden is high and solar has been out of reach for many families,[1] this funding presents a transformational opportunity to lower energy bills, build resilience, and create job and entrepreneurship opportunities in places that have seen decades of disinvestment. In Houston’s iconic and predominately Black 5th Ward neighborhood, for example, longtime resident and community leader Doris Brown recently had solar panels and a battery installed on her home as part of a pilot for expanding solar into low-income communities. The benefits were immediate: her electricity bills were cut in half and her lights and air conditioning stayed on when the grid failed in a summer storm. Now, with funding from Solar for All, Ms. Brown’s organization, West Street Recovery, is partnering with nonprofit Solar United Neighbors and local government to scale the program to low-income residents and communities across the county.

More than $1 billion in Solar for All funding will flow to this and other programs led and supported by Hive Fund grantee partners across the South. As lead awardees have begun negotiating contracts with the EPA and moving toward implementation, they have identified some common challenges in urgent need of support that philanthropy is uniquely positioned to provide within the next three to six months. The opportunities identified below include costs that cannot be covered with federal funding but are essential to ensuring that Solar for All delivers on its promise, as well as a limited number of costs that need to be met upfront to ensure the projects begin on good footing, but may be returned to funders through a recoverable grant. Support in this moment will also ensure that essential program partners who are providing community outreach, workforce development, and other core components that will make deployment of these resources more equitable are well resourced to participate meaningfully from the outset.

Immediate Philanthropic Funding Needs for SFA Implementation

Staffing to get programs up and running as soon as possible: While award recipients are working hard to finalize contracts with the EPA before the end of the federal budget year on September 30th, they may not start receiving full federal payments until well into 2025. Philanthropic support is needed for hiring and onboarding new staff during this interim period to help with negotiations, program design, organizational development, and implementation so benefits can start reaching communities as soon as possible.

Clean Energy Fund of Texas doing outreach for solar contractors.

Awardees are operating in good faith with the EPA that they’ll be reimbursed for staffing costs incurred during this interim “limited drawdown” period, but all is dependent on the final contract agreement with the agency, and some unbudgeted costs will fall outside what federal funds will cover. For example, the Clean Energy Fund of Texas was awarded a Solar for All grant to facilitate the development of residential-serving community solar and battery storage projects at historically Black colleges and universities and other minority serving institutions (MSIs) across the South and Southeast. The clock has already started ticking for the planning year during which they will develop financing mechanisms for three ownership models participants will be able to opt into beginning in the summer of 2025. To ramp up, they need recoverable funds to hire new team members who will establish grants management systems, as well as non-recoverable funds for community engagement staff that can start to build relationships with staff and students so they can be a part of designing the programs they will eventually use.

Figuring out how to integrate direct pay tax credits: The Inflation Reduction Act introduced a new direct pay incentive that finally allows governments and tax-exempt entities like nonprofit organizations to receive a payment equal to the full value of the tax credit for qualifying clean energy projects. Integrating these credits into new solar leasing and ownership models can significantly reduce costs of projects and further stretch the reach of Solar for All dollars, but figuring out how to effectively use them will be a complex process. Program designers will need support as they develop ways to leverage this new resource.

In residential solar programs, for example, individuals are not eligible for direct pay when they purchase a system, but in Georgia, Solar for All awardee Capital Good Fund is learning that some low-income residents prefer to lease their solar instead of owning it so they can rely on experienced partners to deliver maintenance and be responsible for troubleshooting if challenges arise. This may create an opportunity for direct pay eligible partners to own and manage residential rooftop systems and use the funds they get back to lower the cost of the system and increase cost saving benefits for low-income residents. Our Georgia partners are seeking funding to pilot this approach, which once proven could enable all Solar for All awardees to serve more people. Philanthropic support to get this pilot project started early will enable Solar for All awardees across the country to learn from and adopt findings and integrate them into their program design, which will primarily occur in 2025.

Overcoming mistrust and other barriers to maximize participation: Lack of awareness and distrust are significant barriers to solar adoption in low-income communities that have not seen significant renewable energy investment and may have been targeted for sub-prime lending and even solar scams. Funding to support early and on-going community engagement in partnership with local groups who have the skills and staff to build trust with residents in specific neighborhoods will be essential to program success. In the Georgia BRIGHT program, for example, outreach partner Georgia Conservation Voters learned from early canvassing efforts that a traditional door-to-door outreach campaign is not enough to get potential participants to the finish line and are layering on paid media and other wrap-around marketing strategies. Early philanthropic funding will extend programs’ limited marketing budgets and help community outreach partners staff up and get started immediately, laying the groundwork for a successful rollout. Read more about this issue here.

Meeting good labor standards: The Inflation Reduction Act includes updated and complex prevailing wage and apprenticeship requirements that help ensure federal funding spurs high quality jobs. Partners need support understanding how they and their contractors can comply with these regulations and meet good labor standards that will qualify projects for enhanced tax credits, further decreasing costs for low-income customers. This is especially important for Solar for All’s residential solar programs. While contractors who do large-scale projects are accustomed to meeting these guidelines, this will likely be new territory for smaller contractors and the much-needed contractors serving Black and Brown communities who are skilling and scaling up to meet the rapidly increasing demand for residential solar.

A key example of this is the Davis-Bacon Act, which requires contractors to pay prevailing wages on federally funded projects and track labor practices and time in very specific ways. While this is crucial for ensuring fair wages, it requires an elevated level of administrative support that can strain the budgets of smaller contractors, making it difficult for them to compete and participate in these projects. Philanthropic funds can support both training and tools to make it easier for small contractors to comply.

Developing and implementing efficient systems for compliance and program tracking: Partners have identified technological solutions to make it easier for SFA awardees to ensure all their contractors are in compliance with labor and other federal requirements, but designing and rolling out these new apps will require upfront investment that few awardees budgeted for in their initial federal grants.

Furthermore, these organizations are poised to scale their existing programs using this new software. Braiding philanthropic funds with federal dollars for this technology will allow partners to automate services they are currently doing manually like weatherization assistance and home readiness programs that create the enabling conditions for solar to be installed in low-income communities. A limited amount of Solar for All dollars can be applied to support this vital work that needs to grow alongside solar for implementation to reach those most in need and take root at the speed and scale necessary to meet both climate targets and community need.

Solar for All programs that are quickly scaling up also need support to bring in expertise to prevent cyberattacks and compliance mistakes and be prepared to respond quickly if and when challenges arise. Challenge-proofing their programs early and creating efficient programmatic systems can prevent much greater expenditure of time and money over the longer term.

Shifting policy for greater reach and impact: Many of the innovations that will emerge from Solar for All implementation can help shape new policies so that programs, utility models, and financing tools can deliver benefits at scale. Partners will need increased capacity to communicate their successes, translate their innovations into new policies, and remove existing policy barriers. In Georgia, for example, state policies don’t currently allow for community solar programs unless they are deployed by a utility. Solar for All partners in Georgia are instead piloting an innovative community benefit solar initiative, a program that facilitates community institutions and nonprofits in sharing the economic benefits of their solar systems with the broader community. This year, advocacy groups’ efforts helped spur an ad hoc committee on community solar that seeks to chart a broader pathway for small scale community solar in the state. New financing products developed for community benefit solar and other programs, along with real time data and stories about Solar for All implementation, can help inform that policy development. As federal funds can’t be used for the advocacy needed to remove regulatory and legislative barriers and make policy advances, philanthropic capital for this work will be critical to accelerating the scale and pace of solar adoption.

Learn more

Key Solar for All partners have developed a set of detailed funding requests to support planning and implementation for their programs. Interested funders can contact nandini@hivefund.org to receive fact sheets with budget details for the programs listed below.

EnergizeNC: North Carolina Clean Energy Fund

The North Carolina Department of Environmental Quality’s State Energy Office, in collaboration with the North Carolina Clean Energy Fund, Advanced Energy, and the North Carolina Clean Energy Technology Center was awarded funding to rapidly deploy solar to low-income households across the state and build the state’s solar workforce. North Carolina Clean Energy Fund is leading implementation of financial assistance for the program, called EnergizeNC, in partnership with several community outreach groups, including Center for Energy Education (C4EE). This first-of-its kind program in the state will reduce energy costs for residents in disadvantaged communities, diversify North Carolina’s solar mix, and build a new constituency for rooftop solar that can help drive policy shifts. A similar program is also underway in South Carolina that the North Carolina Clean Energy Fund is seeking to support.

Georgia BRIGHT Communities Initiative

The Georgia BRIGHT Communities Initiative will expand a pilot program led by Capital Good Fund in partnership with a coalition of municipalities, including Savannah, Atlanta, and Decatur, to make solar accessible to low-and moderate-income residents. The expanded program is expected to reach up to 16,000 residents and nonprofit organizations across four programs: a single-family lease; a free residential direct install solar program; a “community benefit” solar program; and a utility-led community solar program. Implemented in partnership with trusted community-based organizations and other nonprofits — including Hive Fund grantee partners Georgia Conservation Voters, Georgia WAND, Sustainable Georgia Futures, and Southwest Georgia Rising — the program is expected to reduce participants’ energy bills by a minimum of 20 percent, create well-paid local jobs, and provide workforce development opportunities and other benefits for communities and households.

Southeast HBCU & Community Solar Network

Clean Energy Fund of Texas (TxCEF) in partnership with the Bullard Center for Environmental and Climate Justice at Texas Southern University, was awarded funding to facilitate the development of residential-serving community solar and battery storage projects at historically Black colleges and universities, Hispanic serving institutions, and Tribal colleges and universities across the South and Southeast. The projects will serve low-income and disadvantaged communities on and near participating campuses, reducing energy costs by an estimated 25 percent, powering community resilience, and generating well paid local jobs. The program also includes community education and workforce development, including formal apprenticeships in partnership with the Texas AFL-CIO and the National Builders and Trades Association. The initial proposed program scope envisioned 69 projects with 172 MW of solar serving 16,000 households and creating nearly 3500 jobs, but with an award of just 62 percent of requested funds, the partners are currently negotiating with the EPA on a revised scope.

[1] Especially Black families and predominately Black communities. Recent research shows that Black households got few bids from solar developers and paid about 8% higher prices than others. The research attributes this disparity to solar installers not wanting to serve neighborhoods they know are majority Black —a de facto form of solar redlining.

Solar for Y'all: Philanthropy's Role in Ensuring Solar for All Delivers for Southern Communities

Immediate Philanthropic Funding Needs for SFA Implementation

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