The Solar Energy Industries Association (SEIA), is urging banks regulators to expand the Community Reinvestment Act’s (CRA) use to finance solar and storage projects of any size. SEIA’s advocacy push centers around comments the organization submitted in response to new rules that would improve equitable access to solar energy and better align the CRA with the president’s clean energy and climate resilience plans.
The CRA directs regulated bank to serve low- and medium-income (LMI) communities. It is a legislative tool that can be used to catalyze local investment and lending in these communities. SEIA’s comments focus on targeted changes to the CRA that could inject new funding for sources for solar and storage projects across all market segments. This will increase credit access, lower carbon emissions, and create more job opportunities in communities that are most affected by climate change.
“After decades of environmental racism, we now have the opportunity to lead with equity and use community investment banks to finance new solar and storage projects in communities that need them most,” says Abigail Ross Hopper, SEIA’s president and CEO. “If we expand the Community Reinvestment Act to include clean energy access, we can funnel quality jobs, cleaner air, and new business opportunities to underserved neighborhoods across the country. As we look to ramp up clean energy deployment in the Solar+ Decade, we must double down on equity and one of the best ways to do this is to target and support programs that are already reaching frontline communities.”
“If we want to address systemic inequities and deliver economic prosperity to all Americans, it starts with updating laws like the Community Reinvestment Act, which aims to serve local communities,” comments Dana Clare Redden, founder of Solar Stewards and a board member of the Black Owners of Solar Services (BOSS). “Bringing the cost-saving benefits of clean energy to all Americans is of paramount importance, especially in times of rampant climate change and rising costs. Resilient and affordable solar energy can be a game-changer for American families on a limited or fixed income and expanding the Community Reinvestment Act will only further the impact we can have on underserved communities in America.”
Community Development Financial Institutions (Regulated Banks) and state and federally chartered financial institutions (Credit Unions) are required to serve the communities in which they are located. New funding options could allow for more solar projects in low- and moderate income communities. This could include increased support for local community solar projects, new financing options and storage projects built in urban environments. It also includes lending and tax equity support to utility-scale solar in rural regions, according to the SEIA states.
“At the heart of it, the Community Reinvestment Act focuses on fair and equal treatment of low- and moderate individuals in their interactions with federally regulated banks in light of redlining and other historical ills,” adds Lee Peterson, senior manager of project finance and consulting at CohnReznick. “Now, these same communities are disproportionately bearing the brunt of climate change, and CRA compliance must now entail being part of the solution in addressing decades of inequity and discrimination. SEIA’s suggestions to use the CRA to expand solar and storage use is both timely and necessary, and we hope bank regulators will adopt the industry’s recommendations.”
SEIA’s comments, submitted by the organization’s regulatory affairs experts, are in response to joint rules on clean energy and climate resiliency proposed by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation. The comments urge the agencies to go much further and expand definitions of emergency preparedness and infrastructure to account for President Biden’s executive actions on climate change and identify clean energy as a critical solution for climate resiliency in low- and moderate-income (LMI) communities.
LMI communities are more affected by climate change than other communities. This is due to a number of factors including insufficient access to housing, healthcare, community infrastructure, and a dearth of generational wealth. This makes it harder for these communities recover from extreme weather events.