By Jon Strieter
Analyst, Impact Investments
May 20, 2022
Fossil fuels have energized almost every aspect of our lives for the last century. Coal, crude oil and natural gas power our cars, workspaces and homes. Yet our reliance on fossil fuels is rapidly declining. Between 2018 and 2021, the U.S. consumed 5% less of its energy from fossil fuels1. A clear transition from fossil fuels to renewable energy sources is underway. The negative impacts of fossil fuels and climate change are intensified for low-income communities. These communities face significantly higher health and financial risks when extreme weather and natural disasters occur. For example, in cities destroyed by hurricanes or fires, the poorest neighborhoods often take the longest to recover, if they recover at all.
In response, some local governments are rethinking sources of energy consumption and committing to cleaner energy in low-income communities by encouraging the use of solar energy. Specifically, California, Colorado and Illinois have invested in the development of solar projects for low-income developments.
Solar Energy Benefits
Solar energy is the most abundant source of energy on Earth, providing more than 10,000 times the world’s total energy needs2. Solar has increased in popularity and viability as advances in solar and battery technology improve energy efficiency and reduce costs for equipment. Transitioning to solar energy in low-income communities can lower utility bills for both residents and property owners. Reduced operating costs help property owners manage tight budgets, and residents save money on their monthly utility expenses, freeing up cash for other necessities.
Positive Social Purpose Lending Program: Installing Solar Panels
Over the past two years, the Positive Social Purpose (PSP) Lending Program, the longest running impact investment program at Wespath, has seen an increased commitment from the industry to cleaner energy in affordable housing developments.
Sunrun, the largest U.S. residential solar, storage and energy services provider, has committed to installing at least 500 megawatts of solar on low-income properties by 20303. Through this initiative, three California properties Wespath financed through its PSP Lending Program are now sourcing a portion of their energy needs through solar power.
These three properties installed roof solar panels, with one property also adding capacity using carport solar panels. The combined savings of the solar installations over the next 20 years is expected to be over $1.2 million, with $900,000 in savings directly benefitting low-income residents of these properties via reduced energy costs. This is just one example of how increasing reliance on renewable energy sources and decreasing reliance on fossil fuels can create both a positive environmental impact and a material financial benefit.
Promoting solar energy is one of the many initiatives Wespath supports as a leading impact investor. We focus on opportunities that seek to strengthen local and global communities. Refer to our website, to learn more about our impact investments and the framework behind these initiatives.
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