By Ravi Malhotra
Originally published in NH&RA’s Tax Credit Advisor Magazine
Federal Funds for Multifamily Solar Projects En Route
The Inflation Reduction Act (IRA) is expected to fund approximately $1 trillion in tax credits for clean energy. A significant portion of the funding is for the solar investment tax credits (ITC)—the base ITC was expanded to 30% and multifamily affordable housing may be able to additionally receive up to 40% of bonus ITCs if projects meet certain conditions, such as being located in an energy community, built with domestic content, or providing benefits to low-income and disadvantaged communities (LIDACs). After the funds through the IRS, the next largest infusion of dollars is through the Environmental Protection Agency (EPA), and includes $27B for the Greenhouse Gas Reduction Fund (GGRF). The GGRF is designed to finance clean technology deployment nationally with an emphasis on low-income and disadvantaged communities (LIDACs). It has three subprograms that multifamily properties can access for a mix of technical and financial assistance for solar (and potentially storage) projects that can: (1) improve property value, (2) cut operations and maintenance costs, and (3) reduce utility bills for tenants. The GGRF subprograms are:
I. The National Clean Investment Fund (NCIF) program is distributing approx. $14B among three entities that will establish national clean financing institutions to deliver accessible, affordable financing for clean technology projects nationwide. Each awardee has its own priority groups, including small farms and schools, owners of single-family and multifamily properties, Tribes, etc. Each awardee has committed 50% or more of their funds to LIDACs, and multifamily affordable housing perfectly fits the bill.
II. The Clean Communities Investment Accelerator (CCIA) program is distributing $6B to five awardees who will establish hubs to provide funding and technical assistance to community lenders.Each of the awardees will provide capitalization funding, technical assistance subawards, and technical assistance services so that community lenders can provide financing for projects that reduce carbon emissions. 100% of the capital under CCIA is dedicated to LIDACs. Again—a natural fit for multifamily affordable housing.
III. Solar for All (SFA) program is distributing $7B to 60 applicants that include states, territories, Tribal governments, municipalities, and nonprofits to expand existing and launch new low-income solar programs. Awardees will develop specific programs designed to serve their designated communities facing unique barriers to solar deployment and will provide subsidies, low-cost capital, and technical assistance to projects.
For SFA, 90% of the selected applicants plan to fund residential rooftop solar, including multifamily affordable housing, 88% plan to fund deployment of residential-serving community and shared solar, and 78% plan to fund energy storage solutions. These funds will likely start hitting communities early 2025.
Better still, these dollars can be leveraged with other funds that were expanded or created under the IRA and Bipartisan Infrastructure Law (BIL), resulting in holistic solar projects that can incorporate energy storage, energy efficiency, beneficial electrification, and health and safety measures. Additional funding includes the Dept. of Energy’s (DOE) Home Energy Rebate Programs for electrification and efficiency, DOE’s Weatherization Assistance Program, U.S. Dept. of Housing and Urban Development’s Green and Resilient Retrofit Program, the EPA’s Climate Pollution Reduction Grants and other grant and loan programs, and much more. Access the resources below to learn more about these funding sources and how they can benefit your multifamily affordable housing property and your residents.
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