Norwich Solar (NS) recently built a solar installation to provide renewable electricity at reduced prices to sixteen customers, including fourteen single-family homeowners on Starlake Lane in Norwich, Vermont. The system was built on land owned by Twin Pines Housing, a non-profit specializing in affordable housing.
The project has three solar arrays, each of 15 kilowatts, AC. This system may sound pretty common nowadays. In fact, some might call it unremarkable. But there is one thing about it that makes it a powerful example of what can be done locally to solve big problems. The Community Impact Investment works to invest in our communities with an intentional, positive outcome for all parties.
In addition to the other work Norwich Solar does, which includes all aspects of design through installation, NST has been working out how to get solar power to those who cannot otherwise afford it, often because they are excluded from participating in federal incentive programs. The problem with the programs is that the incentives they offer for solar installations come in the form of tax credits. Non-profit organizations, such as churches and schools, do not pay taxes, so tax credits are not of much use. Similarly, many people do not earn enough money to owe much in taxes, so credits don’t do them any good either. Many of these electricity customers would like to get solar power, but the system is not designed to be helpful to them.
What NST does is play matchmaker for these people and organizations, finding local impact investors (LII) who wish to put money into local solar systems as an investment. These impact investors own the systems, make a modest return with tax credits, charge a discounted price for electricity, and typically sell the systems to those who use the electricity at a reduced price when the credits run out.
The NST Community Impact Investment program has supported the development of several solar systems, including the array on Starlake Lane. Norm Levy, who lives in Norwich and is the LII for the Starlake Lane project, has seen possibilities in the program that he would like to share with others. Levy is a retired physician who worked at Dartmouth Hitchcock Medical Center. Serving on the Norwich Energy Committee, he saw the possibilities of how local, small investments could make a big difference. He developed a goal of having an investment that could recoup his money in the first five years of a seven-year contract while reducing electric bills for moderate-income participants by 25%.
He worked with NST, Twin Pines Housing, and the Starlake Housing Association, a group of moderate-income homeowners. The project was able to provide solar energy to the fourteen homeowners, one other adjacent homeowner, and Cover Home Repair, a non-profit providing no-cost home repairs to low-income Vermonters.
According to Levy, there are many progressive individuals of sufficient financial means who would like to step up to finance such projects, if only they knew how. He told us, “Many are hungering for socially responsible impact investments, now a multi-trillion-dollar business for the investment community but most offerings do not get down to the community level or to low-income populations.”
He provided a list of his reasons for an investor to be a local impact investor. (We present that in slightly modified form to accommodate presentation in print.) The local impact investor
1. Can take advantage of the numerous tax benefits available to private ownership but unavailable to non-profits and public institutions, including the 30% Federal rebate, state investment credits, and accelerated depreciation.
2. Can determine the pace and rate of return on investment.
3. Can decide on the extent to which one shares the tax benefits with non-profits and off-takers.
4. Builds desirable local assets like solar arrays that will provide benefits for decades.
5. Helps put money into the pockets of low-moderate income off-takers by sharing benefits. This long-term benefit goes on for decades, so people can do as they wish, making a small dent in the income inequality problem.
6. With full return on investment, can recycle the same money and do it again.
For those who are interested, NST has a page on its website devoted entirely to Community Impact Investment. It can be found at http://bit.ly/Norwich-CII.