Marcus Jones and his business partner, Akunna Olumba, talked to banks about their green vision to open a pizzeria in Detroit, including solar panels on the roof, energy-efficient tankless water heaters and a rooftop system to capture rainwater. .
“The lender thought we were crazy,” Mr. Jones said. Traditional banks were skeptical that such investments would pay off, and few issued loans for clean energy or efficiency measures. They told restaurant owners it simply wasn't done.
Instead, the pair connected with so-called green banks, one of a growing number of institutions that lend money to companies and individuals for equipment or technologies that reduce the pollution that causes climate change.
The movement will receive a $20 billion commitment from the Biden administration on Thursday in what Vice President Kamala Harris called “the largest investment in financing community-based climate projects in our country's history.”
The Environmental Protection Agency (EPA) plans to award grants ranging from $500 million to $6.9 billion to eight nonprofit organizations. The organization will use that money to provide loans to businesses, homeowners and others to spur clean energy across the country, especially in low-income areas.
A loan can be something as small as helping a family buy an electric induction stove, or as ambitious as helping build energy-efficient, low-income housing.
“We are investing an unprecedented $20 billion in communities that have been cut off from resources for too long to lower costs and benefit from clean technology solutions,” EPA Administrator Michael S. Regan said in a statement. He said.
But Republicans have denounced the funding as a “greendoggle” and said the EPA is not prepared to oversee such a large-scale program. House Republicans passed a bill in March to repeal the greenhouse gas reduction program.
President Biden has threatened to veto the bill if it reaches his desk, but it has not yet been voted on in the Senate. Representative Gary Palmer of Alabama, who authored the bill, called the EPA plan a “Green New Deal slush fund” that “raises many concerns about lack of accountability and oversight.”
The Biden administration is working to quickly distribute funds from the program before January 2025, when the incoming administration or a Republican-controlled Congress could eliminate the funding.
The administration estimates that the program will attract about $150 billion in private capital, or about $7 for every dollar of federal spending. The awardees committed to collectively reduce or prevent up to 40 million metric tons of carbon dioxide emissions over the next seven years. This equates to taking approximately 9.5 million cars off the road for a year.
Mr Regan said the new network of clean energy finance would “spark a host of clean technology projects, including installing solar for small and medium-sized businesses, electrifying affordable homes and providing EV loans for young families.”
The $20 billion comes from President Biden's signature climate law, the Inflation Reduction Act of 2022, which includes $27 billion for a program known as the Greenhouse Gas Reduction Fund.
The largest grants under the program include $6.97 billion to a coalition called the Climate United Fund, led by Calvert Impact, a nonprofit investment firm. The Coalition for Green Capital, a nonprofit founded by Reed Hundt, former chairman of the Federal Communications Commission, received $5 billion. Power Forward America, comprised of five climate and housing organizations, received $2 billion.
The idea for a greenhouse gas reduction fund dates back more than two decades, when a group of financiers proposed the idea of a national bank that could attract private investment by funneling public funds into networks of electric vehicle charging stations, community solar projects and other areas. going. Adoption of renewable energy.
The EPA program is similar in concept, but instead of one national bank, the agency is funding a variety of nonprofit organizations that will act as lenders.
“It’s taken a long time to get here,” said Democratic Senator Chris Van Hollen of Maryland, who introduced legislation to create a green bank in 2009.
Van Hollen said he expects the money to make a significant difference in low-income communities where residents are less likely to take advantage of federal tax incentives available for electric vehicles and certain appliances such as induction stoves and heat pumps. This is because you don't have enough initial cash to make the purchase.
“We don’t want any community to be left behind in the transition to a clean energy economy,” he said.
One of the grant recipients, Rewiring America, is currently working in rural areas like De Soto, Georgia, providing loans and grants to approximately 78 households to upgrade their appliances and weatherize their homes.
Mildred Carter, 73, said when the water heater at her De Soto home broke last year, she thought, “Oh my God, on top of all this, I can't afford a new water heater anymore.” Ms. Carter, who retired from Walmart after working for 21 years, went without hot water for two months before she found Rewiring America, where she applied for a grant to get a free electric heat pump and installation, she said.
Mr. Carter said he was concerned about clean energy and climate change. But he said about the heat pump issue, “I wasn’t really interested at the time, I just wanted to make sure I had hot water.”
In Detroit, Mr. Jones and Ms. Olumba's restaurant, Detroit Pizza Bar, has been open for two years and is the first black-owned pizza joint in the city's Livernois Six-Mile neighborhood. It is also the first sit-down restaurant in the area in over 30 years.
Jones said the money he borrowed from the nonprofit Michigan Saves to purchase solar panels and energy efficiency measures has paid off. He said customers only notice solar panels and rooftop rainwater barrels when he points them out. “They’re coming for pizza.” He said.
Vice President Harris and Mr. Regan were scheduled to present the awards in Charlotte, North Carolina.