Conference Presentation, Panel
Community Infrastructure Building Blocks: 10,000 Communities Initiative | Finance Forum 2025
- Market growth for community scale infrastructure is anticipated to accelerate, driven by an "enormous" appetite for rural investment evidenced by over 1,100 applications for 40 Department of Energy grants and 585 applications for six grants in the ReCompete pilot.
- Success metrics for initiatives like ReCompete and the Eastern Kentucky Runway Initiative aim to place 34,000 to 35,000 people into the workforce, with grant programs described as spanning four to five years on paper but potentially requiring 20 years for true community transformation.
- A Lawrence Berkeley Lab study predicts that for every non-residential solar installation by nonprofits or houses of worship, approximately 80 residential follow-on installations will occur within the next five years.
- The capital stack required to address deployment constraints will involve a mix of public, private, and philanthropic funding, necessitating partnerships across jurisdictions to overcome local capacity issues such as thinly staffed city halls and a lack of access to financial institutions.
- The Inflation Reduction Act's direct pay provision is expected to resolve major barriers regarding solar investment tax credits for nonprofits, though risks regarding project size and credit risk are expected to persist.
- A portfolio approach utilizing the Milken Center's Community Infrastructure Center and the Banyan Infrastructure Platform is planned to accelerate investments into small-scale deals by enabling CDFIs, credit unions, and community-based investors to update due diligence for clean energy assets.
- Automation and digitization are expected to reduce costs, risk, and time for investors, allowing larger banks to identify specific credit boxes without credit enhancements and enabling capital stacks to be sized and priced to direct philanthropy or government entities to specific risk levels.
- Market norms and standards are expected to be established to create a virtuous cycle where community-based lenders add clean energy to portfolios for affordable housing and small business lending, eventually making solar loans as accessible as car loans.
- Interest rates currently ranging from 10% to 15% are considered too wide for current structures, requiring specific product terms to be broken down and capital to be right-sized for local community needs rather than $100 million-scale investments.
- Investment in underserved communities remains viable as low-income families and community centers prioritize paying electric bills, though changing community beliefs from "learned helplessness to agency" is projected to be a significant challenge for capital providers over the next few years.
- The outlook predicts a renaissance in smaller and rural US towns, driven by a permanent and profitable market that may eventually reduce reliance on philanthropy and government cycles through securitization and independent bank investment.
- Future scenarios include a narrative reversal in regions like Eastern Kentucky, transforming them from perceptions of poverty to thriving communities where residents do not need to be pioneers, supported by a capital stack that bridges local relational trust with institutional risk calculations.