Insuring a Better Energy Future
Welcome to the first installment of Sunwealth’s “Insuring a Better Energy Future” blog series. In this series, we will explore the unique opportunity for insurance companies to invest in solar tax credit financing and partner with Sunwealth to positively impact the communities we serve.
Sunwealth’s 406 kW solar project at the Oakland Landfill in Oakland, ME.
Insurers’ Role as Clean Energy Investors
Extreme weather events have proved costly to insurance companies in the last decade. In 2023 alone, insured losses from extreme weather events exceeded $50 billion through the end of September, according to the Insurance Information Institute. As these climate-related disasters become more frequent and severe, the financial stakes for insurers continue to rise. This reality necessitates insurance companies to rethink their business models to address not just the risks but also the solutions to climate change.
Insurers can play a pivotal role in combating climate change through strategic investment. By intentionally allocating a portion of their substantial financial resources to support investment in low-carbon technologies, they can actively contribute to combating climate change while bringing positive benefits to local communities. The high cost of insurance is likely to disproportionately affect low-income communities and communities of color, who are more likely to reside in climate-vulnerable areas. One promising avenue to address these issues is investing in impactful community-based solar projects through Sunwealth’s solar tax equity program.
Why Sunwealth?
At Sunwealth, we invest in a better energy future by financing and managing solar projects that benefit diverse communities through clean power, carbon reduction, cost savings, and job creation. We partner with skilled local solar installers, community organizations, local businesses and investors to democratize the benefits of renewable energy by changing the way we invest in it. Insurance companies are well-positioned for tax equity investment as it allows them to effectively manage their tax liabilities while contributing to renewable energy projects.
Benefits of a Tax Equity Partnership with Sunwealth:
High Risk-Adjusted After-Tax Returns: Benefit from stable, long-term returns through revenue streams generated from electricity sales and/or lease payments. These predictable cash flows align well with the risk profiles sought by insurance companies in their investments.
Mitigation of Climate Risk: Reduce exposure to climate-related risks by investing in solar energy, thereby contributing to efforts to mitigate climate change.
Diversification: Solar financing provides an opportunity to diversify your investment portfolios beyond traditional asset classes such as stocks and bonds. This diversification can help reduce risk and enhance overall portfolio resilience.
Economic Incentives: Capitalize on government programs such as the Inflation Reduction Act which was signed to incentivize private investment in solar energy through tax credits, rebates, and renewable energy certificates.
Real-World Impact
Project Highlight: The Kingsbury Club
By investing in Sunwealth’s Solar Tax Equity, you can help deliver reduced carbon emissions, clean energy jobs, meaningful electricity savings, and clean power to communities such as the town of Medfield, MA. This Sunwealth solar plus storage project totals 1,188 kW, complemented by 2,230 kWh of battery energy storage. The Kingsbury Club, a health and fitness club and the host of the project, is selling 100% of the power produced to the town of Medfield, who will receive $3.1 million in lifetime energy savings. The project will offset almost 27,000 tons of carbon over its lifetime, while creating 41 lifetime solar job years.
Join Us in Shaping a Better Energy Future
For insurance companies seeking pathways for building robust and risk-adjusted portfolios, Sunwealth’s Solar Tax Equity product offers a solution that seamlessly integrates diversification and impact without sacrificing returns or risk tolerance. These values-aligned partnerships bolster the stability and resilience of our local communities, generating long-term benefits for organizations and households that stand to benefit the most from accessible and affordable clean energy.
By partnering with Sunwealth, insurance companies can play a pivotal role in shaping a better energy future while optimizing their investment strategies. Together, we can ensure that the transition to clean energy equitably benefits everyone.
About Sunwealth
Sunwealth is a clean energy investment firm working to change who has access to renewable energy by changing the way we invest in it. Combining deep experience in solar development and finance with roots in community and impact investing, Sunwealth invests in commercial solar plus projects delivering clean energy and energy savings to communities while providing strong financial returns to investors and community partners. Since 2014, the company has invested over $201 million in 659 community-based solar projects nationwide; the company has delivered targeted returns to investors for over 9 years with no defaults. For four consecutive years, Impact Assets named Sunwealth to its IA50, a leading list of impact fund managers; Environmental Finance awarded Sunwealth its 2023 Award for Innovation – Bond Structure (Social Bond) and named Sunwealth’s Solar Impact Fund its ESG Fixed Income Fund of the Year. Learn more at www.sunwealth.com.