WITH THE FEDERAL dollars for renewable energy slowing to a trickle or stopping altogether, a Cambridge-based company is looking to provide funding for community solar projects in underserved areas through a new renewable energy credit (REC) program.
Solstice, a company that connects homes and businesses with community solar farms, announced that it would sell renewable energy credits to corporate buyers – Microsoft will be the first – for a higher than market price and then channel that surplus into a fund to help organizations invest in their own projects geared toward sustaining renewable energy. Four of the first five beneficiaries of the program – Boston Medical Center, Boston Community Solar Cooperative, Community Works Services, and Worcester Community Energy Action – are based in Massachusetts.
Through the new Solstice program, Boston Medical Center received $160,000, Boston Community Solar Cooperative received $65,000, Community Works Services received $50,000, and Worcester Community Energy Action received $65,000. An organization based in Buffalo, New York, called PUSH Buffalo received $65,000.
Boston Medical Center will be using the money to install more solar panels on the hospital’s administrative buildings. The hospital runs a program called the Clean Power Program, which uses the energy credits from its existing 356-kilowatt solar array to provide a reduction on utility bills for lower-income patients. The program currently supports 80 households, but the hospital is looking to double that number in order to help more patients who would struggle with their utility bills otherwise.
Dr. Anna Goldman, a co-founder of the program, said that the project is in its fundraising phase and that the Solstice funding is a helpful start.
The award to Boston Community Solar Cooperative – a Boston-based non-profit that has been working on bringing community-owned solar to low-income neighborhoods- will be used to advance its project to install its first community-owned solar array on the Dorchester Food Co-op roof. Community Work Services will use its grant to expand its clean energy job training program and create workforce development opportunities in the renewable energy sector for underserved communities.
The announcement comes as the federal government has been implementing funding freezes on money that has already been allocated for renewable energy projects. The fate of $156 million set aside for Massachusetts through the federal Solar for All program as part of the Inflation Reduction Act has been precarious after the Trump administration turned off the funding in February.
Funding for the program – which is supposed to deploy 125 megawatts of solar capacity and provide a 20 percent reduction in energy costs to more than 31,000 low-income and disadvantaged households across Massachusetts – has since been turned back on. But the state is experiencing other delays with the program, including canceled meetings with federal officials and added layers of review, according to officials at the state’s Executive Office of Energy and Environmental Affairs. The state has resumed working on the program, but there is still uncertainty over whether the funding will continue.
“The constantly changing disruptions to federal funding are hurting our residents and businesses,” said a spokesperson from the state energy and environmental affairs office. “Massachusetts and New England states were awarded over $1 billion in investments to lower costs, create thousands of jobs, and protect clean air and water. We secured these funds through agreements with federal agencies, and those agreements should be honored by the new administration. We will continue to work with the attorney general’s Office to pursue a stop to this funding freeze and deliver for Massachusetts.”
With uncertainty surrounding federal funding, programs like Solstice’s renewable energy credits could help bridge the gap for organizations trying to find the money to launch renewable energy projects, said Kyle Murray, Massachusetts program director at the Acadia Center, a non-profit research and advocacy organization dedicated to combatting climate change. Solar developers and organizations working to adopt solar use a variety of different funding mechanisms and that extra $50,000 to $160,000 can put a project over the top, especially for smaller organizations, he added.
“We need to be creative in this environment about how we fund projects, and this seems like it could be promising,” said Murray.
Renewable energy credits are tradeable certificates that each represent one megawatt of electricity generated and delivered to the electric grid from a renewable energy resource. Private companies can buy renewable energy credits to offset their energy usage, and the money from the renewable energy credit is meant to incentivize wind and solar developers with a market mechanism for selling the clean energy.
RECs have been criticized because when private companies or individuals buy the credits, they are generally buying credits for already existing renewable energy as opposed to investing in new development. Concerns have also been raised that companies that depend largely on fossil fuels might buy RECs from a project in a different state to claim that they are running. This means that companies can claim that they are carbon neutral despite still using a lot of fossil fuel-generated energy.
Sam Cote, the chief of staff at Solstice and the manager of the new fund, said that this potential lack of impact is partly what this program is trying to address. By charging a premium per unit of REC from corporate buyers like Microsoft, Solstice is able to channel money from the transaction directly into communities.
“There are definitely concerns and criticism about, if you’re buying these RECs from projects that are maybe older, that’s not the most impactful way to do this,” said Cote. “That’s exactly what we’re trying to solve for. We’re trying to add impact in a way that benefits communities. So instead of just buying a renewable energy certificate, you’re also buying a little bit of an extra enhancement, some extra impact.”
Cote said that the company charges a 15 percent administrative fee on the total amount contributed by a corporate partner to manage the fund.
Lindsay Griffin, the regulatory director of the Northeast region at Vote Solar, a grassroots non-profit that advocates for solar energy, encouraged other corporations to create similar projects. But she pointed out that this program relies on the voluntary participation of a company like Microsoft, which has to agree to pay extra to obtain RECs. She said that structural change is unlikely to happen because of programs like these, even if they are a move in the right direction.
“These corporate initiatives alone cannot create the systemic change needed for a truly equitable and democratic energy system,” said Griffin. “This program is really awesome and these initiatives like Solstice’s represent progress, but they remain voluntary. For true transformative change at the pace that we need it, we need comprehensive policy reform that reorients our energy system towards the public good rather than profit maximization.”
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