Decarbonize, Decentralize and Democratize: Investing in a More Just Energy Future
By Jess Brooks
The existing extractive energy economy isn’t working. Our dependence on coal, oil and gas contributes to global warming, the physical destruction of communities and pollution-related health issues which impact all of us – and disproportionately affect low-income people and communities of color. It’s not sustainable. And it’s fundamentally unjust.
At Sunwealth, we believe the future of energy is decarbonized, decentralized and democratized. We invest in that future by financing diverse renewable energy projects that reduce greenhouse gas emissions, strengthen local resilience and bring the benefits of renewable energy to under-served communities. Since 2014, we have financed over 70 solar installations on rooftops and open spaces across our communities. Our investments bring critical capital to the commercial solar market – supporting smaller-scale solar projects ranging in size from 5 to 500 kilowatts. These are the buildings and spaces you see as you walk through your neighborhood: schools, houses of worship, child care centers, fire stations and local businesses; apartment buildings and rooftops of low- and moderate-income homeowners; and underutilized brownfields, parking lots and odd-shaped parcels ill-suited to development.
Institutional capital has neglected this market, seeking out large utility-scale transactions and aggregations of residential installations in affluent communities with high credit scores which are easier to underwrite. Their focus has created “solar deserts” among the very populations who could benefit most from clean, affordable electricity, including low-income residents, nonprofit organizations and municipalities.
We provide these consumers with clean, locally-generated energy that offers significant savings on their electric bills. Our investments create green jobs with local solar developers, whom we contract with to maintain these projects long-term. Located across our neighborhoods and business districts, our projects provide visual testament that all of us can contribute to the fight against climate change.
Sunwealth has attracted investment from over 100 investors – individuals, families, foundations, endowments, intermediaries and corporate investors looking to invest in a renewable energy future that benefits us all. Our Solar Impact Fund provides them with fixed-income returns in a non-correlated alternative asset. Investors know what projects they’re invested in and can track their investment’s financial performance and its impact in terms of carbon reduction, energy savings and jobs created. Moreover, they know their investments are regenerative rather than extractive, contributing to a more just, sustainable and inclusive energy future.
The Future of Energy is Decarbonized…
Our partners – investors, solar developers and the individuals, organizations and businesses who lease us roof space and purchase our power – understand that the future of energy is de-carbonized. They know that renewable energy improves air quality while helping address global warming, and that solar provides a proven, efficient and durable alternative to fossil fuels. Since 2010, solar installation costs have fallen 70 percent, while installations themselves have grown at an annual rate of nearly 60 percent. According to the U.S. Department of Energy, nearly 350,000 Americans work in solar power generation – more than in coal, natural gas and oil combined.
Sunwealth’s investment makes it possible for our partners to participate in our transition to a clean energy economy. In Somerville, MA, for example, we’ve partnered with the City to help them achieve their sustainability goals and reduce energy costs. Here’s how we do it: We use capital from investors to secure long-term rooftop leases and install solar panels on the rooftops of apartment buildings and local businesses like cleantech incubator Greentown Labs , providing rooftop rental income that improves their financials. We partner with local developers like United Solar, founded by a Somerville High School graduate, to install and maintain the projects, ensuring that jobs and revenue remain in the region. We sell the energy credits for the power we generate to the City to offset energy consumed by City facilities. Finally, our investors get repaid as customers pay their electric bills. A virtuous circle.
The Future of Energy is Decentralized…
We envision a future where rooftop- and ground-mounted solar installations across a community act as mini-power plants, contributing energy to the larger grid and storing that energy for future use. Puerto Rico’s experience with Hurricane Maria highlighted how vulnerable a community can be when it relies solely on an aging and centralized power infrastructure. Distributed renewable energy systems can help a community weather a storm and bounce back more quickly from natural disasters. They strengthen long-term resiliency while providing near-term savings and clean, affordable power.
Moreover, small, distributed solar installations are critical to reducing our dependence on fossil fuels. According to the National Renewable Energy Laboratory, rooftop solar installations have the potential to generate close to 40 percent of the nation’s energy. Installations on small buildings (<5000 square feet) represent close to two-thirds of that overall rooftop capacity.
For investors, a decentralized energy future doesn’t need to be a complicated one. Sunwealth aggregates these smaller installations into portfolios that mimic the size and performance of a utility-scale project. These portfolios offer diversification across a range of building types, geographies and off-taker types, reducing overall investment risk. The economies of scale we obtain allow us to make solar accessible to groups who otherwise wouldn’t be able to afford it.
The Future of Energy is Democratized…
We believe renewable energy can and should benefit all communities – not only those who can afford the upfront installation costs. These costs are often a barrier to low- and moderate-income individuals and to nonprofit organizations, houses of worship and municipalities. These individuals and entities are in many cases unable to take advantage of tax credits and subsidies designed to make solar more affordable, creating an even larger gap between solar “haves” and “have nots.”
Sunwealth’s model helps address this inequity by connecting community-based solar projects with investors. We partner with on-the-ground developers who help us identify strong projects and work with community organizations from conception through installation. Our projects undergo a rigorous underwriting process to ensure they meet the highest quality standards and provide consumers with savings of 15-30 percent on their monthly electric bill. We also rigorously underwrite our power purchasers, paying attention to long-term viability and as well as ability to pay. We are investing for the long haul in projects and partners who will be here for decades to come. Investors have the opportunity to invest directly through our bond and tax equity offerings.
This innovative structure allows us to bring renewable energy to solar deserts. In Holyoke, MA, we turned a two-acre vacant parcel sandwiched between turn-of-the-century manufacturing buildings into a solar installation providing clean, affordable power to Holyoke Housing Authority residents for the next 20 years. 
The Future of Energy is Ours to Create
Sunwealth’s vision of the future of energy has attracted attention. We are poised to invest over $12 million in solar energy and storage projects in 2018, more than double our 2017 investment. We have a 2019 pipeline of over $40 million in new solar projects that will provide 20 megawatts of solar power across 50 communities, generating lifetime energy savings of over $30 million.
The future we are investing in fights climate change while promoting ecological preservation, community resilience and social equity. It generates powerful returns for our communities, our local economies, the environment and our investors.
The way we see it, this future is bright.