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The Trump administration is making it harder for low-income households to access the money-saving benefits of solar — but hard doesn’t mean impossible.
There’s a lot for developers of affordable solar projects to navigate at the moment.
The Trump administration has clawed back billions of dollars in Inflation Reduction Act funding for projects serving low-income communities across the country, including $7 billion for the federal “Solar for All” program. In July, the GOP-controlled Congress passed a sweeping law that will swiftly phase out the tax credits solar developers use to bring down costs. And for months now, the administration has held up $20 billion in federal green bank funding, which some organizations planned to use to make solar available to more people.
Clean energy supporters are opposing the Trump administration’s freeze on green bank money in court and are expected to challenge the Solar For All clawback as well. In the meantime, the nonprofits and state agencies planning affordable solar projects with the money are left in limbo.
Still, some developers are forging ahead.
Take John Miller and Jessica Pitts as an example. The pair, which founded Flywheel Development in 2014, is still proceeding with all 35 of their planned low-income solar projects, which will deliver a total of 17.5 megawatts of solar power to people who otherwise wouldn’t be able to access the clean energy source. Miller and Pitts think organizations like theirs can withstand Republican attacks on clean energy programs — so long as other financing and policy partners pick up the slack.
Figuring out a way to continue this work is crucial as energy costs rise even faster under Trump.
Rooftop solar is an effective way for households to reduce their electricity bills. But for a number of reasons, many low-income households can’t install rooftop solar: They may not own their home, or if they do, the up-front costs might be too high or they could struggle to qualify for a loan. Meanwhile, solar power is a tough sell for most multifamily housing, particularly rental properties where landlords take on the cost of installing panels that primarily benefit tenants, who usually pay the lion’s share of utility bills.
Community solar projects like those developed by Flywheel and others can solve these problems. Low-income households are able to sign up to access energy from these shared installations, letting them tap into the benefits of the clean energy resource.
In places where community solar isn’t available, multifamily properties can still use on-site arrays to reduce their utility bills. Those savings can be used to invest in cost-of-living upgrades, as can lease payments paid to properties that are hosting solar systems.
Federal action may not have completely foreclosed affordable solar aspirations — but in many cases, it has narrowed what’s possible.
“This is a drastically different world,” said John Fox, senior director of clean energy at Enterprise Community Partners. His organization runs Enterprise Community Development, one of the nation’s largest nonprofit affordable housing providers.
Enterprise has deployed 2.1 megawatts of solar at 13 of its properties in Maryland, Pennsylvania, Virginia, and Washington, D.C. It’s working on another 7.6 MW of solar as well as various projects around battery storage, electric vehicle charging, geothermal heating and cooling systems, and energy-efficiency retrofits.
Enterprise had hoped to deploy 24 megawatts of solar across its properties by 2032. “Now, I think it’s going to be half of that, because that’s what’s cost-effective in this new environment,” Fox said.
And although Flywheel is pushing ahead with its full project pipeline, the financial calculus has gotten tougher due to Trump’s policy changes. The tax-credit phaseout “has a fairly significant impact on the timeframes for projects, and how we manage compliance,” Pitts said.
While the new law doesn’t immediately eliminate the federal tax credits that cover 30% or more of the cost of solar investments, it does require projects to start construction by July 2026 or to be delivering energy by the end of 2027 to qualify for the incentive. It also forces installers to abide by complex and still-vague anti-China rules starting next year.
These policy headwinds are raising costs and cutting into the utility bill savings that developers can pass on to low-income residents, Fox said. Enterprise has historically offered average savings between 20% to 50%, and while Fox says the nonprofit can maintain that 20% level for systems that still qualify for tax credits, the “steep discounts of 50%” are not tenable in the current policy environment.
Flywheel earns a fairly good return on its investments, if not as lucrative as those possible from higher-end real estate projects, Pitts said. The company evenly splits its revenues with host properties for some of its projects, and accepts 30% of the revenues for its Solar for All projects — a skinnier cut that still pays out well, given the program’s generous long-term payments for the solar power generated, she said.
Losing federal tax credits will make solar projects more expensive, which will require lenders to adjust their expectations, but Pitts said she thinks their more community-focused financing partners, like the DC Green Bank and local nonprofit community development financial institutions (CDFIs) will understand that need.
“With that category of financier, there’s a focus on community investment,” she said.
A large part of why Flywheel can press on with its plans is its partnership with the local government.
Much of its work has been backed by payments from D.C.’s Solar for All initiative, the inspiration for the embattled federal program that offers lucrative payments for shared solar projects that can reduce energy bills for lower-income D.C. residents. To date, Flywheel has installed 6.2 megawatts of solar across 88 sites in D.C. and Maryland.
Finding lenders for these relatively novel solar projects was tough at first, said Miller. The company has primarily worked with CDFIs, which focus on underserved communities.
It also found a crucial partner in the DC Green Bank — one of a growing number of “green banks” that make clean energy, efficiency, and environmental remediation loans in communities that have been shunned by mainstream lenders. Flywheel’s Fairfax Village project received one of the DC Green Bank’s earliest loans in 2020, said Gary Decker, the bank’s chief operating officer. The DC Green Bank has also financed some of Enterprise’s projects.
The results speak for themselves. Flywheel’s D.C.-backed projects at properties like the Fairfax Village and Perrington affordable condominium communities and Abrams Hall, an affordable senior living community at the former Walter Reed Army Medical Center, have delivered $15.4 million in no-cost electricity to low-income residents of Washington, D.C., Pitts said.
They’ve also provided $4.25 million in lease payments to the properties involved, which have used the money for tasks including replenishing reserve funds and paying for roof repairs.
Flywheel is helping property owners put some of those proceeds toward energy-efficiency upgrades, Pitts said, which would slash utility bills even further.
At the Perrington Condominiums property in D.C., for example, Flywheel combined solar photovoltaic panels that meet about half the building’s annual electricity needs with rooftop solar thermal systems to offset about 40% of the property’s use of fossil gas to heat water. The property plans to invest the money it’s saving on energy into other capital investments, including efficiency improvements, Pitts said.
Enterprise is encouraging its buildings to do something similar. The nonprofit is working on long-term solar power purchase agreements to hedge against rising utility rates in the region. “We’re not going to be passing on fluctuations in the market,” Fox said.
Any savings Enterprise can achieve through solar PPAs can be put toward energy-efficiency investments. “We have to run tight buildings. We don’t have a lot of profits to dole out,” Fox said. “Our residents pay 30% max of their living wage on rent plus utilities.”
Plowing energy savings back into properties is key to increasing the financial attractiveness of low-income solar projects to conventional lenders, said Sadie McKeown, president of Community Preservation Corp., a CDFI specializing in affordable multifamily financing. CPC has provided $15 billion in investments and loans over the past half-century for more than 230,000 housing units in 24 states, with a focus on New York.
“We know when you make buildings better, their operating economics improve, and you can do more financing because you improve cash flow,” she said. Energy efficiency has been part of CPC’s approach for decades, she said. ”It keeps rents down. It provides much better air quality and health outcomes. It creates resilience against storms. And yes, it addresses getting carbon out of the atmosphere.”
CPC is hoping to use its share of a $7 billion award from the still-frozen federal green bank program to spur more lenders and investors to “crowd in” to building-sustainability projects like these, McKeown said. “When the money comes back, we are ready,” she said.
Driving down the cost of borrowing to pay for these kinds of sustainability investments is a critical step in reducing the need for incentives or subsidies to make them pencil out financially, she said.
“Niche lenders like green banks and CDFIs are really important actors in the front end of this transition,” she said. “Mainstream private capital doesn’t want to change until they see results.”
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