Positioning Solar for All Grant Recipients for Success

On Earth Day 2024, the U.S. Environmental Protection Agency (EPA) announced its grant award allocations for the $7 billion Solar for All program established under the Inflation Reduction Act (IRA). There were 60 total awards ranging from $25 million to $249 million issued to 49 state and local government agencies and regional nonprofits. The program is unique in its commitment of 100% of the funds to disadvantaged communities, creating a transformative opportunity to bring the benefits of solar and the energy transition to traditionally marginalized communities. 

The funding announcement now allows awardees to focus on planning and decision-making to ensure a well-conceived and well-executed program. Although the dollars allocated by the EPA are scheduled to be released in July 2024, state and local government program administrators have the opportunity now to plan and prepare. Awardees can meet the program’s strict requirements and deliver substantial impact and sensitive engagement to target communities and individual beneficiaries. Here are some short-term actions that Solar for All recipients can take to ensure success.

Program and Financial Product Design

Many recipients created high-level programs and product descriptions in their applications, but now, those ideas must be adapted to the actual funding they will receive and developed into an actionable program. Solar for All provides wide latitude to recipients to determine the products they will offer, compared to other programs like Home Energy Rebates. Choices include grants and loans, as well as product types, including community solar, multifamily and single-family installations, and energy storage.

States will need to make final determinations on their appetite for risk, managing multiple complex programs, and deciding the right mix of complex loan products and more straightforward grants. These decisions are best guided by formulating a “North Star” set of program goals and metrics, especially how to reach potential Low Income Disadvantaged Community (LIDAC) beneficiaries in the state. Solar for All has some strict and unusual requirements for benefits delivery, which only adds to the importance of a solid program design. 

For novel programs like Solar for All, data-driven market assessments reduce risk and increase the likelihood of program success. Data-driven insights improve program design, including determining grant size and loan terms, lowering barriers to entry, and ensuring contractor and material availability. Recipients will benefit from drawing on available data to glean potential household participation by region, customer segmentation, current energy burden, housing types, workforce readiness, and employment data. 

Stakeholder engagement is also a powerful input to program design. Key stakeholders include industry powers such as utilities and financial institutions to ensure market participation and environmental justice community engagement to ensure the programs’ uptake and general support. 

Determining the appropriate mix of projects and financing is more than one-size-fits-all. The right design for each recipient will depend on their unique circumstances and geographies (e.g., maturity of private residential markets, contractor pools, utility relationships, and legal and permitting hurdles). Designing the specifics of the programs—rebate levels, investment partners, pipeline development, and application and compliance processes—is a critical first step.

External Funds Braiding and Layering

The IRA is a once-in-a-generation opportunity to fund decarbonization. Multiple programs overlap, especially for LIDAC recipients, creating opportunities to combine funding streams for greater impact.

Leveraging other funding streams in combination with Solar for All funds has enormous potential for increased impact. IRA Home Energy Rebates and Weatherization Assistance Program (WAP) also target residential customers with upgrade funding. Many Solar for All recipient entities are also subrecipients of other Greenhouse Gas Reduction Fund (GGRF) programs like the National Clean Investment Fund and the Clean Communities Investment Accelerator. Tax credit programs like the Low Income Communities Bonus Credit and expanded Residential Clean Energy Credit can also be beneficial.

There are also opportunities for significant savings by administering Solar for All with related programs such as Home Energy Rebates. In addition to the shared stakeholder and beneficiary populations, Home Energy Rebate and Solar for All program managers will need to navigate IRA-specific compliance and guidance over both program lifespans. There may also be an opportunity to share several program tools and resources, including a shared application portal and payment platform for participating contractors, developers, and homeowners.

Technology Platform and Data Approach 

Technology will be necessary to reach diverse populations, receive and process large numbers of applications, and manage the detailed reporting that the EPA will require. 

Many of the key elements of the technology platform will be shared with similar programs like Home Energy Rebates and WAP. Eligibility screening, income and identity verification, and area median income calculation will be necessary for an effective Solar for All application tool. Ideally, applicant platforms will provide beneficial pairings of trade allies and potential financing partners for single-family, multifamily, and community solar projects.

Solar for All allows significant customization to fit distinct regional needs. Program design may include multiple implementation streams, meaning any technology will require customization and flexibility. The platform will consist of core rebate workflows. It may need to incorporate elements from solar loan tools developed by Green Banks and the residential solar industry. The platforms may also need to address community solar and general interfaces to direct residents to appropriate programs and incentives.

Technology and communications must be accessible to a broad and diverse user base. The systems need to meet mandatory federal and regional accessibility requirements. State and local program websites often encounter issues with outgoing applicant communication, particularly in populations who may not have access to email or text messages. Separate call and mail centers may be needed to provide various communication options to low-to-moderate-income program beneficiaries.

Trackability, auditability, and data security are all high priorities. Entities will handle large volumes of applications, personally identifiable information, and other sensitive data. The correct storage and security solutions can differ based on the data volume and applications. Key functions, including task and application management capabilities and an audit log, will also help with quality control and save potential headaches in future federal inspections and inquiries.

It is still unclear to what extent the EPA may provide specific guidance on identifying and reporting impact, benefits, and energy measurement and verification and whether the EPA may defer to recipients to develop their standards. State and local governments and nonprofit grantees must be prepared for this evolving guidance and ensure flexibility in their data, measurement, and technology approaches.

How Guidehouse Can Help

Guidehouse understands the energy and climate programs of the IRA.  Guidehouse is partnering with dozens of entities receiving billions of dollars in IRA funding, including multiple hydrogen hubs, several states on their Home Energy Rebates (Home Efficiency Rebates Program and High-Efficiency Electric Home), and recipients of all three GGRF programs (National Clean Investment Fund, Clean Communities Investment Accelerator, and Solar for All). When it comes to the GGRF, we understand how to manage the diversity of risks, comply with the details of qualified projects, report expectations, navigate the grants-to-loans transition, and promote community impact. 

We Design, Implement, and Operate Grants Management Programs

Our team has successfully supported over $60 billion for more than 70 federal, state, county, and local government grant recipients. We do this through extensive experience with grants management, from the design of online portals, AI-enabled application reviews, and rigorous management in accordance with the Federal Uniform Guidance, 2 CFR Part 200, as well as all program requirements and guidance issued by federal agencies. Guidehouse has a team of professionals nationwide who form our Community Building and Investment Center of Excellence©, which closely monitors federal agencies to track and analyze each new release of regulations and guidance.

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Guidehouse supports clients in pursuing sustainability, decarbonization, and environmental, social, and governance initiatives to navigate a rapidly changing regulatory environment. We combine our deep expertise with capabilities in data and analytics, program delivery, managed services, and more to provide holistic strategies based on knowledge of industry, geography, and client-specific needs.