We fund solar and renewable energy projects benefiting nonprofits and marginalized communities. In fact, BQuest has participated in funding more than 100 projects in the last 6 years! One tool that we frequently use (but wish wasn’t so necessary) is a Bridge Loan.
Many government programs offer funding, incentives, and rebates for impactful projects that we want to see in our community. Unfortunately, many of those programs and incentives don’t provide upfront funding. It’s difficult, and often impossible, for a small nonprofit to float the money that it takes to get through permitting, construction, and the process to claim an incentive or rebate at project completion.
For instance, The Inflation Reduction Act has unleashed a historic amount of funding to spur investment in clean energy. A major change that affects tax-exempt entities like nonprofits is that they can now receive a direct payment for solar projects that is equal to the value of tax credits, which can be 50-60% of the project cost! But it will likely take a couple of years for an organization to get from project start to the payment being received.
As another example, California’s Solar on Multifamily Affordable Housing Program (SOMAH) can sometimes cover almost the entire cost of a solar installation, reducing energy bills for lower-income renters. SOMAH makes milestone payments, but building owner still must need at least 50% of the project cost up front.
A major funding strategy for BQuest is to offer low- or no-interest bridge loans for these types of projects so that nonprofits and community based organizations can feel confident moving forward bringing these renewable energy benefits to their communities.
We believe this is a key role which philanthropy can lead with when community impact is high: providing funding that is patient, catalytic, and mitigates risk.
BQuest recently completed 3 solar projects for local nonprofits that demonstrate the impact of a bridge loan. The Brother Benno Foundation and two Vista Community Clinic sites, all located in Oceanside, will now save an estimated $2 million in utility costs thanks to their new solar installations.
The idea for the projects originated when Preserve Calavera, an Oceanside-based nonprofit organization that received $4.4 million for its Oceanside Greenhouse Gas Emission Reduction Fund, selected solar power projects to be among its first initiatives. Preserve Calavera hired Hammond Climate Solutions Foundation (HCSF) to manage the solar initiative.
Realizing that Preserve Calavera’s grant funding could be stretched much further if there was a way to utilize the new solar Investment Tax Credit direct pay, HCSF reached out to BQuest to request a bridge loan.
We’re pleased to see these nonprofits generating energy from the sun and saving on their utility bills! Now more of their precious budgets can be redirected to programs that positively impact their community. Vista Community Clinic serves over 70,000 patients annually across 12 locations in Southern California, providing crucial healthcare services in underserved communities. Brother Benno’s has grown from a small soup kitchen to a vital community organization for North County San Diego, addressing homelessness and financial hardship.
In a few years, after BQuest receives repayment for the bridge loans, we will promptly turn it around and reuse it to catalyze more clean energy projects. We will continue to advocate for incentive programs to be paid up front rather than at the end so that more of the benefits can reach the highest impact projects in the communities that they’re intended for. But in the meantime, we embrace the role that philanthropy can play by bridging the funding gap.
Do you know of a renewable energy project that might be eligible for financing? Explore funding opportunities here.
Images courtesy of Vista Community Clinic, Brother Benno Foundation, and Aloha Solar*