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A Turnkey Model for 
Leveraging Direct Pay
to Advance Solar and 
Renewable Energy Finance

In recent years, transformational federal legislation, including the Inflation Reduction Act, has unlocked a new era of clean energy. As we explore in this guide, through provisions like Direct Pay, this legislation can help democratize clean energy projects like community and residential solar by making it financially viable for low-to-moderate income households and communities.

But to fully capitalize on the opportunities, we need community lenders who are willing and able to help finance clean energy projects. Financing from Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), and other mission-driven lenders are especially vital for marginalized communities that are otherwise underserved by the banking sector. As the leaders of Rochdale Capital, a minority-led community development loan fund, and National Bankers Association, the only trade organization exclusively for minority banks, we are motivated to help mission-driven lenders participate in climate finance. We partnered together and in collaboration with WeSolar—the first Black woman founded solar developer firm—to provide this substantive blueprint for action for financing community-centered solar projects. 

Our goal for this blueprint is twofold. First, we want to highlight how nonprofits, state/local/tribal governments, publicly owned utilities, and rural electric cooperatives can take advantage of Direct Pay. Second, we want to equip mission driven lenders with how to provide additional capital to make these projects fully viable. 

In Part I of this guide, we share insights from leading experts on what Direct Pay is, why it matters, and what is needed to fully realize its potential. In Part II, we present a turnkey financial model for financing community-focused solar. This section includes a hypothetical case study that digs into the details around funding sources, loan terms, financial projections and more. We also include a detailed impact measurement matrix and an appendix with a glossary of key terms. 
We are grateful for the generosity of The Kresge Foundation who funded this project as part of its ongoing tangible commitment to advancing climate equity. The Kresge Foundation just celebrated its 100th anniversary, and we look forward to the next century of its philanthropic leadership. 

This moment in time calls for bold action. Time is of the essence to safeguard our planet and protect our most vulnerable communities. And the clean energy revolution holds real potential to generate durable wealth, improve health outcomes, and create new jobs and opportunities for small businesses, including minority firms. It is our hope that this resource on Direct Pay will serve as a meaningful starting foundation for tapping into the opportunities ahead of us. 

John Holdsclaw IV 
President and CEO
Rochdale Capital

Nicole A. Elam, Esq. 
President and CEO
National Bankers Association