Reactivate Launches New Community Solar Portfolio with Walmart and U.S. Bank in Low-to-Moderate Income Communities

Rhea-AI Summary

Reactivate, in collaboration with Walmart and U.S. Bancorp Impact Finance, closed a tax equity transaction on a new portfolio of seven community solar projects in Illinois and New York. The projects will help approximately 5,000 households and various organizations save as much as 20% on monthly electricity costs, with a majority of beneficiaries being low-to-moderate income households. Walmart aims to bring at least 2GW of community solar projects in service by 2030, as part of its energy transformation strategy.

Positive

• Tax equity transaction closed on a new portfolio of seven community solar projects in Illinois and New York
• Projects to help approximately 5,000 households and various organizations save up to 20% on monthly electricity costs
• Majority of beneficiaries are low-to-moderate income households
• Walmart's goal to bring at least 2GW of community solar projects in service by 2030

Negative

• None.

Insights

Energy Sector Analyst

The collaboration between Reactivate, Walmart and U.S. Bancorp Impact Finance signifies a strategic move within the renewable energy sector, especially in the community solar space. The investment in a portfolio of seven community solar projects demonstrates a growing trend among corporations to engage in environmentally responsible initiatives that also have a direct impact on consumer costs. The estimated 20% reduction in monthly electricity costs for approximately 5,000 households, including LMI households, is significant given the national average energy burden for low-income households is 8.6%.

By focusing on community solar projects, these corporations are tapping into a market that allows for broad participation in renewable energy benefits without the need for individual property ownership. This approach not only broadens access to clean energy but also aligns with corporate sustainability goals. The 14.4 megawatts (AC) combined capacity of these projects and the subsequent reduction in CO2 emissions align with broader industry goals for reducing carbon footprints and combating climate change.

Moreover, Walmart's commitment to bringing 2GW of community solar projects into service by 2030 reflects a substantial investment in renewable energy infrastructure that could serve as a model for other corporations. Such large-scale commitments can have ripple effects across the energy sector, potentially lowering costs for clean energy technology and accelerating the transition to a more sustainable energy grid.

Financial Analyst

From a financial perspective, the tax equity transaction closed by Reactivate, Walmart and U.S. Bancorp Impact Finance is indicative of the attractive investment opportunities that renewable energy projects can offer. Tax equity financing is a common method in the U.S. for funding renewable energy projects, allowing investors to receive tax credits in return for their investment. This can result in a mutually beneficial scenario where companies like Walmart can meet their sustainability targets while taking advantage of tax incentives.

The involvement of a major retailer like Walmart in these projects could also signal confidence in the financial viability of community solar projects. As these initiatives can generate steady, long-term revenue streams through power purchase agreements (PPAs) and other financial mechanisms, they may become increasingly appealing to investors looking for stable returns in a market that is conscious of environmental, social and governance (ESG) factors.

Furthermore, the emphasis on serving LMI households can be seen as an investment in community goodwill and corporate social responsibility, which can translate into positive brand equity and customer loyalty for Walmart. This aspect of the investment could potentially open up new market segments for the company, as it positions itself as a leader in both sustainability and social equity.

Sustainability Consultant

Examining the environmental and social implications of the solar project portfolio, there are clear benefits in terms of sustainability and equity. The projected CO2 emissions reduction is a tangible environmental benefit that contributes to climate change mitigation efforts. By focusing on underserved LMI communities, the initiative is also addressing energy equity, ensuring that the transition to clean energy does not leave behind those who are often most affected by energy costs.

Community solar programs like these can serve as a catalyst for local economic development, potentially creating jobs and fostering community engagement around sustainability issues. This is particularly relevant given the DOE's data on the disproportionate energy burden on low-income households. By reducing this burden, the projects may improve the quality of life for individuals within these communities.

Additionally, the inclusion of non-profits, businesses and a public school district as beneficiaries underscores the holistic approach to community impact. It is not just households that stand to gain from reduced energy costs, but local institutions that are vital to community function and well-being. This multi-faceted impact could set a precedent for how renewable energy projects are integrated into community development plans.

CHICAGO, Jan. 31, 2024 /PRNewswire/ -- A new portfolio of seven community solar projects in Illinois and New York will help approximately 5,000 households, along with area non-profits, businesses, and a public school district, save as much as 20% on their monthly electricity costs. Reactivate (an Invenergy company), a mission-driven renewable energy company, in collaboration with Walmart and U.S. Bancorp Impact Finance (a U.S. Bank subsidiary) recently closed a tax equity transaction on the new portfolio. Once the projects are placed in service, the beneficiaries will include a significant majority of Low-to-Moderate Income (LMI) households; the remaining savings will be realized by public schools, a municipality, non-LMI households, and various private organizations, including two affordable housing providers, a community recreation center, religious institutions, and a housing association. 

For Walmart, this is a key example of how the retailer is ramping up its energy transformation strategy by investing in projects that focus on making access to clean energy affordable, reliable, and equitable – and in line with Walmart's goal to bring at least 2GW of community solar projects in service by the end of 2030. "Serving our customers and communities is core to our purpose at Walmart and our support of this high-impact portfolio demonstrates our continued commitment to that purpose. These projects will assist in building a stronger and cleaner grid, expand access to clean energy for underserved communities and help people save money on their utility bills," said Frank Palladino, Vice President, Renewable Energy Strategy at Walmart.

"This partnership with Walmart and U.S. Bank combines environmental stewardship with social responsibility, delivering tangible benefits to low-to-moderate income and energy transition communities while achieving clean energy goals", said Chris King, EVP of Finance at Reactivate. "We remain committed to driving positive change and reshaping the landscape of renewable energy investment," said Utopia Hill, CEO of Reactivate.

The transaction supports a portfolio of seven community solar projects across Illinois and New York, boasting a combined capacity of 14.4 megawatts (AC) which are estimated to avert 667,788 metric tons of CO₂ emissions — equivalent to eliminating 748 million pounds of coal burned — over the projects' lifespans. The six Illinois community solar projects are located in Chicago Heights, Ford Heights, Monee, Granite City, and Rockford and will serve qualifying customers of ComEd and Ameren. The New York solar project is located in Oswego County and will serve qualifying customers of National Grid. 

Community solar allows customers to realize the financial benefits of clean energy without owning a property or the upfront costs for solar. For renters, LMI households, and many local businesses in states with community solar programs, community solar is one of the few zero-upfront-cost options for saving money on electricity bills. According to DOE's Low-Income Energy Affordability Data Tool, the national average energy burden for low-income households is 8.6%, three times higher than for non-low-income households. In some areas, depending on location and income, energy burden can be as high as 30%. Of all U.S. households, 44%, or about 50 million, are defined as low-income.

"Projects like Reactivate's are shining examples of how renewable energy developers can distribute the direct benefits of grid-decarbonization to historically underserved communities," said Clark Conlisk, U.S. Bancorp Impact Finance - Vice President, Assistant Director of Project Management & Impact Capital, who is part of the Environmental Finance team of U.S. Bancorp Impact Finance. "For the LMI households subscribed to the project, the money that no longer must be spent to keep on the lights and A/C is a benefit to real people and empowers them to spend or save as they choose. U.S. Bank is fortunate to be able to support Reactivate's vision for an inclusive and equitable clean energy economy while advancing our own clean energy and equity goals."

Reactivate's portfolio will serve approximately 5,000 households to benefit from the electricity cost savings delivered by these projects, approximately 90% of which will qualify as LMI. LMI customers in Illinois and New York will receive a minimum 20% reduction on their retail electricity costs, up to the amount of their subscription to project output. Total customer savings from the projects in this investment are projected to exceed $17 million over the projects' lifespans.

About Reactivate
Reactivate is a mission-driven renewable energy company, that develops, owns, and operates renewable energy projects to improve the lives of people in low-to-moderate income and energy transition communities across the country. Reactivate's primary focus areas are community solar, commercial & industrial solar, small utility scale solar, energy storage, and EV charging projects. Reactivate creates positive social and environmental impact in underserved communities by delivering renewable energy, environmental benefits, job opportunities, energy cost savings and opportunities for minority and women-owned businesses. Reactivate was founded by Invenergy and Lafayette Square.

About Walmart
Walmart Inc. (NYSE: WMT) is a people-led, tech-powered omnichannel retailer helping people save money and live better – anytime and anywhere – in stores, online, and through their mobile devices. Each week, approximately 240 million customers and members visit approximately 10,500 stores and numerous eCommerce websites in 19 countries. With fiscal year 2023 revenue of $611 billion, Walmart employs approximately 2.1 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy, and employment opportunity. Additional information about Walmart can be found by visiting https://corporate.walmart.com, on Facebook at https://facebook.com/walmart, on X (formerly known as Twitter) at https://twitter.com/walmart, and on LinkedIn at https://www.linkedin.com/company/walmart/.

About U.S. Bancorp Impact Finance
U.S. Bancorp Impact Finance, a subsidiary of U.S. Bank, is an industry leader in providing financial solutions that help create positive impact for communities and the environment. For 35 years, its tax credit investments and syndications, lending and other financial solutions have helped create affordable housing, spur economic activity in underserved communities, restore historic buildings, develop renewable sources of energy, and strengthen community development financial institutions (CDFIs) nationwide. Learn more at usbank.com/impactfinance.

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SOURCE Reactivate

FAQ

What is the purpose of the tax equity transaction?

The tax equity transaction aims to support a new portfolio of seven community solar projects in Illinois and New York.

How many households and organizations are expected to benefit from the projects?

Approximately 5,000 households and various organizations are expected to benefit from the projects.

What is Walmart's goal related to community solar projects?

Walmart aims to bring at least 2GW of community solar projects in service by the end of 2030.

What is the capacity of the seven community solar projects?

The combined capacity of the seven community solar projects is 14.4 megawatts (AC).

Where are the Illinois community solar projects located?

The six Illinois community solar projects are located in Chicago Heights, Ford Heights, Monee, Granite City, and Rockford.

What is the estimated CO2 emissions averted by the projects?

The projects are estimated to avert 667,788 metric tons of CO2 emissions over their lifespans.

How does community solar benefit renters and low-to-moderate income households?

Community solar allows renters and low-to-moderate income households to realize the financial benefits of clean energy without owning a property or incurring upfront costs for solar.

What is the national average energy burden for low-income households?

The national average energy burden for low-income households is 8.6%, three times higher than for non-low-income households.

How does Walmart's energy transformation strategy align with the community solar projects?

Walmart's energy transformation strategy focuses on making access to clean energy affordable, reliable, and equitable, which aligns with the goal of the community solar projects.

What is the role of U.S. Bancorp Impact Finance in the tax equity transaction?

U.S. Bancorp Impact Finance, a U.S. Bank subsidiary, collaborated with Reactivate and Walmart to close the tax equity transaction on the new portfolio of community solar projects.