Solar for Multifamily

Federal Funds for Multifamily Solar Projects En Route

By Ravi Malhotra
August 1, 2024 3 min read

The Inflation Reduction Act (IRA) is expected to fund approximately $1 trillion in tax credits for clean energy. A significant portion of the funding is for the solar investment tax credits (ITC) – the base ITC was expanded to 30 percent and multifamily affordable housing may be able to additionally receive up to 40 percent of bonus ITCs if projects meet certain conditions, such as being in an energy community, built with domestic content or providing benefits to low-income and disadvantaged communities (LIDACs). After the funds through the IRS, the next largest infusion of dollars is through the Environmental Protection Agency (EPA) and includes $27 billion for the Greenhouse Gas Reduction Fund (GGRF). The GGRF is designed to finance clean technology deployment nationally, emphasizing LIDACs. It has three subprograms that multifamily properties can access for a mix of technical and financial assistance for solar (and potentially storage) projects that can: 1) improve property value; 2) cut operations and maintenance costs; and 3) reduce utility bills for tenants.

The GGRF subprograms are:

I. The National Clean Investment Fund (NCIF) program is distributing approximately $14 billion among three entities that will establish national clean financing institutions to deliver accessible, affordable financing for clean technology projects nationwide. Each awardee has its priority groups, including small farms and schools, single-family and multifamily property owners, tribes, etc. Each awardee has committed 50 percent or more of their funds to LIDACs, and multifamily affordable housing perfectly fits the bill.

II. The Clean Communities Investment Accelerator (CCIA) program is distributing $6 billion to five awardees that will establish hubs to provide funding and technical assistance to community lenders. Each of the awardees will provide capitalization funding, technical assistance sub-awards and technical assistance services so that community lenders can provide financing for projects that reduce carbon emissions. A hundred percent of the capital under CCIA is dedicated to LIDACs. Again, a natural fit for multifamily affordable housing.

III. The Solar for All (SFA) program is distributing $7 billion to 60 applicants that include states, territories, tribal governments, municipalities and nonprofits to expand existing and launch new low-income solar programs. Awardees will develop specific programs designed to serve their designated communities facing unique barriers to solar deployment and will provide subsidies, low-cost capital and technical assistance to projects.

For SFA, 90 percent of the selected applicants plan to fund residential rooftop solar, including multifamily affordable housing, 88 percent plan to fund the deployment of residential-serving community and shared solar, and 78 percent plan to fund energy storage solutions. These funds will likely start hitting communities in early 2025.

Better still, these dollars can be leveraged with other funds that were expanded or created under the IRA and Bipartisan Infrastructure Law (BIL), resulting in holistic solar projects that can incorporate energy storage, energy efficiency, beneficial electrification and health and safety measures. Additional funding includes the Department of Energy’s (DOE) Home Energy Rebate Programs for electrification and efficiency, DOE’s Weatherization Assistance Program, the U.S. Department of Housing and Urban Development’s Green and Resilient Retrofit Program, the EPA’s Climate Pollution Reduction Grants and other grant and loan programs, and much more.

Access the resources listed below to learn more about these funding sources and how they can benefit your multifamily affordable housing property and your residents.

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