Clean Energy Group’s work on clean energy financing is focused on supporting the deployment of solar+storage systems throughout building portfolios, through partnerships with low-income housing developers, solar companies, city officials, philanthropy, federal agencies, and financial institutions. We work to develop new financing approaches and funding resources to accelerate project development and to attract new investment for clean resilient power in under-resourced communities for housing and community facilities, as well as for small– and medium–size businesses and entrepreneurs to build out the resilient power infrastructure.
Market Development through Integrated Development Finance
The goal of this work is to obtain commitments for portfolios of resilient power projects from housing developers and others by helping them to access well-structured financing resources and other support. Flexible financing on commercially reasonable terms, together with smart incentives and technical assistance, are needed for an integrated, development–finance approach that will accelerate the growth of this early stage market for solar PV paired with battery storage (solar+storage) technologies.
One example of this strategy is the Financing Resilient Power initiative. In January 2020, The Kresge Foundation, Clean Energy Group, and New York City Energy Efficiency Corporation (NYCEEC) announced a groundbreaking $3.3 million commitment – through a Kresge loan guarantee and connected grants – to accelerate the market development of solar+storage in historically underserved communities.
This initiative 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.
Filling Project Pipelines
To help build project pipelines for solar+storage systems, Clean Energy Group works with project developers by providing technical assistance and small grants to pay for third-party technical services and predevelopment costs associated with resilient power projects. This work strives to secure commitments for portfolios of resilient power projects from housing developers, cities, and others. Our Technical Assistance Fund (TAF) grants help pay for needed technical and economic analysis of potential projects, and they can be used for predevelopment costs for resilient power systems installations.
Leveraging New Capital Investment
The Resilient Power Project‘s focus on finance issues builds on Clean Energy Group’s earlier work about the critical role credit enhancement plays in attracting new sources of capital investment. That was explored in Clean Energy Group’s report, Reduce Risk, Increase Clean Energy.
Later, The Kresge Foundation, Surdna Foundation and The JPB Foundation commissioned the Clean Energy Group to prepare a thorough review of the market barriers to deploying solar+storage technologies in low-income markets, as well as the identification of more than 50 grant and investment opportunities that socially minded investors can use to target those barriers. This resulted in the report, A Resilient Power Capital Scan.
Clean Energy Group is using this experience to propose foundation program-related investments (PRIs) and capacity-building grants to attract new sources of investment for solar+storage projects. We are working with foundations, impact investors, project developers and financial institutions to create flexible funding mechanisms that most efficiently structure foundation resources for project development and financing. Whether structured as loan guarantees, equipment write-downs, subordinated loan capital or funding for predevelopment costs and capacity-building, what is key is that these foundation investment and grant resources be able to be flexibly combined to meet the needs of specific portfolios of projects being bundled for development and financing.
Through these finance efforts, many more clean energy projects will be completed and greater standardization will occur over time in regard to deal and finance terms and documents. This is essential in order to reduce costs for project developers and to bridge the way to easily accessible, low-cost, long-term institutional capital.