The National Housing Trust and its green affiliate NHT/Renewables LLC (NHT/R) commits to deploy its innovative model for solar energy for affordable multi-family housing. This model allows multi-family building owners to own the solar energy, reap the financial rewards commensurate to their risk, and maintain affordable housing. NHT/R will work with property owners and residents to devise and install solar thermal and solar photovoltaic systems on the roofs of 50 buildings, generating 7 megawatts of energy and reducing costs for building owners. NHT will raise funds through equity from owner or other, debt from CDFI, Federal Investment Credit, Local investment credit or grants. This will directly impact 10,000 residents. NHT/R will target roofs for specific states (DC, MD, VA, MN, CA, NY) where there is a state incentive for the installation of solar energy on multifamily housing. This model will increase access of solar energy to low-income energy customers.
Anticipated challenges in the landscape include but are not limited to: a) amount of state incentives, if any, for solar installation on rooftops of affordable housing; b) the likely reduction of the federal investment tax credit from 30% to 10% by the end of 2016; and c) assuring that owners of affordable housing learn about this innovation soon.
12/30/2015: Understand local regulatory and utility environment; each state which NHT targets has a different system for determining the amount of the state solar incentive, the means by which the incentive can be obtained and the market value for the incentive. To date, NHT has researched incentives in 3 of their target states, California, Minnesota and D.C. By the end of the year, they will have a full understanding of each target states incentive.
9/30/2016: Educate and engage with property owners, residents, and community : NHT s engagement will be based on marketing to property owners by the NHT staff. The Trust staff speaks monthly at national and state housing conferences to owners who are targets for Here Comes the Sun. If asked, NHT will provide owners samples of their explanations to residents. Where community solar is allowed, e.g., D.C., they will work with community groups to encourage the sharing of solar on other facilities for DC Owners housing portfolios
3/30/2017: Perform project feasibility analyses for potential properties
9/30/2018: Create project development and design team
3/30/2018: Create legal and financing structure for installation
6/30/2020: Monitoring and review
The cost of energy is the largest variable operating expense in affordable multifamily rental
buildings. Solar energy enables affordable housing owners to reduce operating expenses, allowing owners to maintain affordable rents and provide resident services for low-income families. Historically, affordable housing owners had a single option: lease the solar panels from an intermediary. The owners did much of the work in securing approvals from existing lenders, but failed to reap the financial upside of the solar panels once the panels were paid off.
Since 1987, the Low-Income Housing Tax Credit (LIHTC) program has been the federal governments primary vehicle for producing rental housing that is affordable to low-to-moderate income households, according to the U.S. Department of Energy. Over 2 million housing units in over 20,000 projects were developed using this financing mechanism. In the past, solar projects have not been incorporated into LIHTC projects because of the unique challenges associated with integrating photovoltaic (PV) systems into existing financing models and the added cost to the new and existing developments. The National Housing Trusts model provides affordable housing owners another option.
NHT anticipates the need for additional equity to supplement their financing model from 2017-2020. NHT anticipates the need for additional media support as the model rolls out. The third party funders/partners are: a) foundations interested in an innovative solar approach that not only benefits the residents and the environment but also the bottom line for owners of affordable housing; (2) partner investors interested in investing in the federal investment tax credit and/or state tax incentives; and (3) foundations interested in supporting CDFIs that will invest in a 5-10 year below market loan for installation of solar across a portfolio.
In addition to solar installations, NHT will present its scalable model at conferences around the country. Providing information on their experiences, the risks and rewards, and feasibility for other organizations who wish to replicate their model will allow for more widespread cost savings and energy efficiency in multifamily housing.