8. What the Biden-Harris Administration Means for a Sunwealth Solar Tax Equity Investment Part II
Executive Action for Justice
By Omar Blayton, Chief Financial Officer
Father Edwin Johnson blesses the solar panels at Epiphany School, a tuition-free school for the children of economically disadvantaged families in Dorchester, MA. Sunwealth’s two solar projects at Epiphany School will deliver over $115K in energy savings over the lifetime of the system.
In the eighth installment of our Banking on Solar series, we take a second look at how the Biden-Harris administration and Democratic-controlled Congress are impacting the solar industry. To start at the beginning of the series, read Banking on Solar.
Late last year, we provided our view on what a Biden-Harris administration might look like for solar investing, particularly tax equity investing. In this view, many of the outcomes depended greatly upon which party controls Congress. January brought encouraging news as Georgia saw fit to elect two Democratic senators to Congress, thereby shifting the balance of power. However, the sudden illness of Senator Leahy emphasized how precarious this newly obtained control is. Should Leahy need to be replaced, the Republican governor of Vermont is likely to fill the seat with a Republican, shifting the balance of power in Congress once again.
Despite the Congressional uncertainty, we saw numerous encouraging steps taken by the administration through executive orders. Orders to rejoin the Paris Climate Accord and prevent new oil and gas drilling on federal lands are meaningful, but the most significant order for the solar investing that Sunwealth and our partners conduct is the one establishing an interagency council on environmental justice.
The Environmental Justice Initiative
Biden’s order established a White House interagency council on environmental justice and directed agencies across the federal government to invest in low-income and minority communities – communities that tend to be disproportionately affected by pollution. Holding true to his campaign promise, the order directs the government to focus 40% of its sustainability investments towards disadvantaged communities, tracking that goal through an Environmental Justice Scorecard. The importance of this order was emphasized by Senate Majority Leader Schumer, who noted the effect of these initiatives to increase the number of American jobs at good wages.
What This Means for Sunwealth
This order is just further validation of the policy tailwinds that we predicted Sunwealth would experience under a Democratic administration. Environmental justice and democratizing the benefits of solar energy are core to our mission and we expect government focus in this area will lead to many more promising investment opportunities. Having been a successful leader in this space during a time when the administration and its policies were much less favorable puts us in a strong position to greatly amplify our scale and community-based impact in the coming years.
What This Means for Sunwealth’s Community Banking Partners
For our valued community banking partners, these initiatives are likely to broadly uplift the investments you already make in our communities to support community-based environmental justice, such as energy efficient affordable housing. They will also help lead to many more opportunities for tax equity investments with strong community impact. We do not yet know the exact form of investment that this 40% will take however, based on past experience, additional incentives and credit support are likely. This would help to further expand the market for community-based solar tax equity and similar impactful products, allowing for greater programmatic investments from community banks.
Return to the homepage to check out our other Banking on Solar blog posts.
Want to learn more about solar tax equity investing? Reach out to Darreck Mitchell at darreck@sunwealth.com.
Omar Blayton is Chief Financial Officer at Sunwealth. He has over a decade of experience in renewable energy investment, finance and management. Omar is on the Board and serves as Treasurer of the Solar Business Association of New England (SEBANE), whose membership includes the best small- and medium-sized solar installers in the Northeast. He also serves on the Finance Committee for the Friends of the Public Garden.