The Kresge Foundation has committed $3 million to guarantee the first 50% of principal payments on solar+storage systems for buildings with low- and moderate-income residents in the Northeast.
The foundation says that during a blackout, solar+storage can keep “homes cooled, oxygen tanks running, and food accessible,” and that it aims to accelerate the market development of solar+storage technologies in historically underserved communities.
Kresge Foundation has teamed with Clean Energy Group to launch the program, with an aim to “encourage other philanthropies interested in clean energy and equity” to join the initiative.
Loans for solar+storage installations will be made by the nonprofit lender NYCEEC, which is marketing the financing opportunity to building owners and solar developers in the Northeast. There is already a pipeline of prospective projects.
One battery storage project that NYCEEC financed originated when energy storage firm Demand Energy opened conversations with L+M Development Partners, the owner of the Marcus Garvey Apartments in Brooklyn. NYCEEC ultimately financed 300 kW of four-hour battery storage, which was paired with 479 kW of solar and 400 kW of fuel cell capacity at the apartment complex.
While the property owner L+M contracted to purchase electricity, L+M made no upfront investment, instead following a financing plan modeled by NYCEEC. Under the plan, L+M formed a new business entity that would borrow from NYCEEC to purchase the energy storage system, and receive ongoing maintenance services from Demand Energy through an energy services agreement, while operating the storage system at a profit. The same new entity also owns the solar panels, and sells power to L+M under a power purchase agreement.
The local utility, Con Edison, helped fund equipment costs and makes ongoing payments to the newly formed entity for peak demand reduction of about 15%. Those payments are part of a plan approved by state regulators to avoid the need to build a new $1.2 billion substation.
Solar developers that have projects to install solar+storage, or to add storage to an existing solar installation, may contact NYCEEC regarding projects at affordable housing buildings or critical community facilities, anywhere from the Washington, DC area to Massachusetts.
Beyond its loan guarantee commitment, Kresge is making a grant to NYCEEC to help it build capacity to finance solar+storage projects, and will fund assessments of the technical and financial feasibility of eligible new solar+storage projects.
The $3 million earmarked by Kresge will remain part of the foundation’s endowment, earning investment returns in the same way as the rest of its endowment, until demand for payment is made under a specific guaranteed loan transaction. At that point, the foundation will make the payment as a program-related investment.
The foundation says that low-wealth communities have been the most vulnerable to climate emergencies, yet they rarely have access to cutting-edge technologies that reduce the impacts.