Shift to inclusive financing model

100% regen- erative policies should promote non-extractive financing policies.

So much of the investment in the energy sector is fossil fuel-based. The kind of non-extractive, clean energy economy that BIPOC and frontline communities are trying to build requires a massive shift in investment and finance. Renewable energy policies should steer investment away from the same fossil fuel based economy that continues to pollute, damage, and intentionally lock out communities of color.

Policy recommendations

100% regenerative policies should include the following elements:

No state subsidies to fossil fuels. Redirect resources towards the development of community-owned renewable energy systems, such as microgrids.

No regressive financing. The burden should not be on people with lower incomes to finance the transition to 100% regenerative energy. Although a vast majority of ratepayer funded state incentive programs are regressive, there are some models of non-regressive financing programs that include:

  • Solar Massachusetts Renewable Target (SMART) Program: “SMART Program is a long-term sustainable solar incentive program sponsored by Eversource, National Grid and Unitil. SMART will encourage the development of solar photovoltaic (PV) technology by supporting 1,600 MW of new solar generating capacity.”[1]
  • Solar on Multifamily Affordable Housing (SOMAH) Program: “[P]rovides financial incentives for installing photovoltaic (PV) energy systems on multifamily affordable housing. The program will deliver clean power and credits on energy bills to hundreds of thousands of California’s affordable housing residents. Funded through greenhouse gas allowance auction proceeds, SOMAH has a program budget of up to $100 million annually and an overall target to install 300 megawatts of generating capacity by 2030.”[2]

Finance reforms for large-scale utilities. As discussed earlier, utilities are regulated according to structures based on an outdated system of large, fossil fuel-powered generation. To build a modern grid suited to the next century’s needs, the utility business model must transform. Some finance reforms include:

  • Revenue decoupling: switching utility plant’s profit margins to the number of customers serviced, rather than the total amount of power sold;
  • Performance target incentives that meet the utilities’ energy savings targets by returning a set percentage of the program costs to them.[3]

Shift away from tax credits to incentives or grants. Solar financing is typically based on an Investment Tax Credit. “The ITC is a dollar-for-dollar credit for expenses invested in renewable energy properties, most often solar developments. The Consolidated Appropriations Act of 2016 extended the ITC through 2019 as a 30 percent credit for qualified expenditures.”[4] This system may not work for low-income communities because they generally do not have a tax appetite encouraging them to take advantage of the incentive. Instead, 100% regenerative policies should shift to incentives and grants, especially for renewables in BIPOC and frontline communities.

Shift financing to public banks. Advocates should encourage public banks to finance renewable energy projects to benefit local communities, such as multifamily affordable housing, community centers, churches, and local schools.

Required data and reports from utilities. 100% regenerative policies should mandate that utilities track data and provide public reports that outline which communities benefit from energy efficiency and renewable energy programs.

Promotion of Green Banks. “Green Banks help secure low-cost capital for clean energy projects including solar at favorable rates and terms to both traditional and otherwise challenging market segments. The availability of low-cost financing is a critical factor for achieving cost-competitive solar energy. Reduced interest rates, extended term lengths, and low or no money down finance offerings can help ensure that solar adopters achieve energy bill savings, provide pricing certainty, and enable investors to achieve attractive investment returns.”[5]


Examples of existing Green Banks in the United States include:

  • Connecticut Green Bank
  • NY Green Bank
  • California Lending for Energy and Environmental Needs
  • Rhode Island Infrastructure Bank
  • Montgomery County Green Bank (Maryland)
  • Hawaii Green Energy Market Securitization

Examples of inclusive financing

Each state will need to conduct its own research to determine the financing necessary to achieve 100% regenerative energy goals. Dedicated funding for more expensive technologies, such as storage, should be a complement to financing for cost effective solutions. Examples of inclusive financing models include:

  • Tariffed on-bill programs described by Clean Energy Works: “In particular, state energy offices in Arkansas and Tennessee have played an active role in supporting implementation of best practices, offering technical assistance, and convening stakeholders for voluntary participation in workshops designed to support program planning and implementation. In each case, only those utilities that are interested in offering an inclusive financing solution are receiving the benefits of that assistance, and the authority to decide whether to offer a tariffed on-bill program remains with the governing bodies of those utilities.”[6]
  • Another example from Mountain Association for Community Economic Development (MACED), Kentucky: “Rather than paying for energy conservation measures up-front, How$martKY allows customers to make installment payments as part of their monthly utility bills, gradually paying for the efficiency upgrades by using part of the energy savings generated by the retrofit. Customers are expected to see savings on utility bills. Charges remain with the property and not the customer to accommodate all classes of utility customers.”[7]
  • Portland Clean Energy Fund “will bring $54 to $71 million in new annual revenue for clean energy and clean energy jobs in Portland. Nonprofit organizations, alone or in partnership with for-profit companies, schools and/or other government agencies, can apply for grants from this revenue to weatherize homes, install solar and other renewable energy projects, provide job and contractor training, expand local food production and build green infrastructure in Portland. The revenue is raised by a new 1 percent business licensing surcharge on the Portland revenue generated by retail corporations with over $1 billion in annual revenue and at least $500,000 in Portland revenue.”[8]
  • Resilient Denver has a “citizen-led ballot initiative [that] will accelerate Denver’s transition to renewable energy, protect Denver’s most vulnerable populations as [they] create a resilient community, and provide training and employment for a green jobs force as [they] prioritize an equitable transition...[The] mission is to create an Office of Climate Action and Resiliency with a dedicated pollution tax funding source to lead the fight against climate change. The office will use those funds for workforce development, grants, rebates, scholarships, and other incentives to speed the path toward renewable energy.”[9]
  • The Women’s Earth & Climate Action Network International’s ‘Divest, Invest, Protect’ campaign is a critical, intersectional, and Indigenous-led divestment campaign. Their goals are:
    • DIVEST from fossil fuel-related companies and financial institutions that negatively impact Indigenous and human rights, and local and global waters and the climate.
    • INVEST in Indigenous Peoples as central actors in shaping economic change and decision-making regarding their lands and territories. Invest in sustainable renewable energy and a Just Transition. Invest in better and more just economic initiatives, paradigms, and structures.
    • PROTECT and advance Indigenous Peoples and human rights, lands, and territories. Protect water, land, and climate from pipelines, fossil fuel infrastructure and extraction at the source.”[10]
  • VoteSolar’s Report on Inclusive Solar Finance Framework “Providing a suite of inclusive solar finance solutions [that] will necessitate changes to the status quo...The goal is to establish an environment where all actions and interventions work efficiently together to expand much-needed access to low-income, low credit score and low-income/low credit score customers...Not only is inclusive solar finance the right thing from a policy, social and environmental justice lens, but it is also advantageous from a business standpoint for solar companies, technology providers, utilities and capital providers alike.”[11]


  1. Building a Brighter Future for Massachusetts.” Solar Massachusetts Renewable Target (SMART) Program, www. Accessed 26 Jul. 2019.
  2. SOMAH makes communities stronger.” Solar on Multifamily Affordable Housing. Accessed 26 Jul. 2019.
  3. Cross-Call, Dan et al. “Report Release: A Practical Guide to Navigating Utility Business Model Reform.” Rocky Mountain Institute, 12 Nov. 2018.
  4. Renewable Energy Tax Credit Resource Center.” Novogradac.
  5. Green Banks.” National Renewable Energy Laboratory.
  6. Hummel, Holmes. “Comments on the Revised Draft Report for the SB 350 Study on Barriers of Low-Income and Disadvantaged Communities to Renewable Energy and Energy Efficiency.” Clean Energy Works, 8 Dec. 2016.
  7. Mountain Association for Community Economic Development - How$martKY On-Bill Financing Energy Efficiency Program.” NC Clean Energy, 14 May 2019. Accessed 24 Jul. 2019.
  8. The Portland Clean Energy Fund Means Clean Energy and Green Jobs in Portland.” Portland Clean Energy Fund. Accessed 14 Nov. 2019.
  9. Resilient Denver. Accessed 25 Jul. 2019.
  10. Divest, Invest, Protect.” Women’s Earth & Climate Action Network, International. Accessed 25 Jul. 2019.
  11. Report: Inclusive Solar Finance Framework.” Vote Solar. Accessed 26 Jul. 2019.