Sunwealth Solar Impact Fund

Sunwealth Solar Impact Fund

Interview with Omar Blayton; Chief Financial Officer of the Sunwealth Solar Impact Fund




Jen: How was the Sunwealth Solar Impact Fund Created? 

Omar: Sunwealth was created by recognizing a blind spot in the approach of traditional capital in the solar industry. The blind spot was primarily driven by the focus on proxies instead of community-based fundamental underwriting when determining which projects to finance. This focus inadvertently created “solar deserts” in communities – including low-income communities and communities of color – that would benefit most from savings, jobs, and resiliency provided by clean energy.

Sunwealth seeks to fill that funding gap. Through fundamental underwriting and reducing transaction friction, we are refocusing capital to maximize impact. By financing community-based projects primarily in the built environment, we see ourselves as leveraging a key tool for addressing economic inequality and strengthening local economic resiliency.

Jen: How are your investment funds catalytic in a way that is different from other funds?

Omar: Sunwealth is unique in that we strive to be highly profitable and highly impactful. We see profitability as key to scaling up the community-based solar market and motivating investors, who may not be as mission-aligned, to redirect their capital into this space. To achieve both goals, we need to be extremely disciplined in the way we structure deals. We apply a portfolio approach to our investments where project pools hold dozens of projects across a range of impact and financial performance. While each individual project is underwritten to perform on its own, a diversified pool further protects against the downside from unforeseen events, such as pandemics. 

Our approach has allowed us to finance ~600 projects without a single default and without the need for any grant funding. The Clean Energy States Alliance (CESA) cited Sunwealth’s model in its “Solar with Justice” report as a model for how private investment can drive solar justice outcomes (access, savings, jobs); in January, the U.S. Department of Energy recognized three of Sunwealth’s projects as models for best practices in developing equitable and accessible community solar. 

When assessing impact at the project level, we focus on who benefits from project construction and project operation. We partner with local developers and installers, ensuring that construction dollars fuel local economies; we also look to build pathways to solar careers for underrepresented workers; and provide meaningful savings to our power customers. For example, our projects with the New York City Housing Authority (NYCHA) employed a minority-owned installer and partnered with community-based nonprofits to develop a solar apprenticeship program for housing authority residents. A dozen residents participated, earning $15/hour for six to twelve months while working full-time installing panels during the apprenticeship; at its conclusion, 40% took full-time employment offers in a market where the prevailing wage is $65/hour!

Those same projects worked with the New York City Community Energy Co-op, a multi-class, multi-race cooperative working for energy justice and a just transition, to subscribe LMI New Yorkers, including many NYCHA residents, through a community shared solar agreement. Subscribers receive a discount of 25% on their electricity bills – and can unsubscribe at any time. 

Community solar is another tool we use to increase LMI participation. Since community solar projects tend to have a large number of customers, as well as a waitlist of people that we can use to substitute for any existing customers who are not paying their bills, we can de-emphasize metrics that have tended to exclude LMI households and communities (e.g., minimum FICO score thresholds).  

We feel the results of our approach are truly catalytic in democratizing the benefits of solar energy and promoting inclusion in the new energy economy. For every $1.00 invested with Sunwealth, 80 cents goes to our installation partners, helping to grow their businesses. Every dollar invested also creates close to 60 cents of lifetime savings for our solar customers. We are also exploring ways to provide low-cost financing to our solar host sites so that they can purchase and own their systems outright sooner, so even more of the long-term economic benefit goes directly to them.

Queens, NY Photo Credit: NYCHA

Jen: How do you describe the kind of non-financial returns the fund offers?

Omar: To date, we have financed $135 million in 575+ projects providing 37 megawatts of installed solar capacity that will deliver:

– $80 million in lifetime energy savings for our customers ($0.60/$1.00 invested)

– 1,200+ jobs and $108 million in revenue for over 88 local developers and installers

– 895,000+ metric tons of lifetime carbon reduction

Another one of our NYCHA projects, separate from the ones described above, is the largest community solar project in NYC on one of the largest affordable housing developments in the country. The project will deliver $1.3 million in lease revenue to NYCHA, which provides housing for 1 in 12 New Yorkers – and is part of their broader sustainability commitment to host 25 megawatts of solar power by 2025.

In West Virginia, Sunwealth partnered with local developer Solar Holler and economic development nonprofit Coalfield Development to create the largest community solar project in the state. The project included an employment component and will provide savings to Coalfield Development, which is working to create new economic opportunities for Central Appalachia.

Jen: Can you describe how you use integrated capital to do your work?

Omar: We look to use flexible capital from our investors to unlock the impact potential from our solar developer and installer network. By providing project pricing that allows our installation partners to pay a living wage to their employees, in addition to development and construction support from our team, we enable our partners to focus their efforts on overlooked organizations that cannot afford to buy solar outright. These organizations often become our connection to broader communities of individuals and customers who are also traditionally overlooked. These individuals may then refer us to other organizations, allowing us to engage our installer partners on additional projects. This integrated and reinforcing loop is how we scale and truly reach the democratization we seek.

Jen: How do you address racial justice, income inequality, and/or gender justice through your products and services?

Omar: Two of our primary drivers are: 1) diversifying the solar industry; and 2) democratizing who receives the benefits of solar energy. Regarding the first, change starts at home, so we are very intentional about building a diverse team that represents the country at large. At the end of 2022, 34% of our team identified as BIPOC, and 46% identified as women. Additionally, we look to partner with minority and women-owned/led organizations in not only installing projects but in every aspect of our ecosystem. We have also begun incubating women and minority-owned/led developers (of which there are relatively few) through our Development Capital product, further catalyzing inclusivity in the industry. 

Regarding the second point, our deal sourcing and underwriting prioritizes access and inclusion for LMI communities and communities of color. We also make sure not to be extractive partners. We pay our installation partners fairly and ensure that all projects provide significant savings to our customers from day one. By using a more fundamental and community-focused underwriting approach, we help mitigate the effects that past discrimination has had on more traditional metrics.  

Jen: Can you share with us an example of an investment? 

Omar: The NYCHA examples above provide the best examples of the levels of impact we provide through our core business. In those projects, you have: 1) payments to the Housing Authority, which they can use for facility upgrades and maintenance; 2) job training with a gateway to a career with a living wage and benefits; and 3) long-term meaningful power savings to individuals who need them most.

Another example is our project with North Carolina-based developer Eagle Solar & Light to install solar on the roof of the Lumbee Regional Development Association (LRDA) – a private nonprofit founded by North Carolina tribal leaders seeking to bring much-needed social, educational, and economic services to Lumbee members. The installation is the first solar project on a building associated with a state-recognized tribe in North Carolina, and the energy savings will be reinvested directly into their community.

Jen: What do you tell people who think your fund is risky?

Omar: The first thing I say is that we have been in business since 2014, built almost 600 projects, and have had zero defaults from power purchasers and zero late payments to our investors. This is also after weathering the pandemic. The diversification approach we apply, along with our underwriting approach, proves that the typical lens used to perceive risk in the communities where we operate needs to be adjusted. Investors can obtain their desired risk-adjusted returns while also being highly impactful and inclusive.                                                           

Investment Thesis/What is your rationale for your approach to investing? Sunwealth builds a better energy future by partnering with investors, local solar installers, and communities to finance community-based solar projects that deliver energy access, savings, and green jobs to communities and stable financial returns to investors. Our blended portfolio approach extends solar access where it otherwise might not be economically viable.

GeographyUnited States – primarily Northeast and Mid-Atlantic, with current existing projects in MA, NY, VT, CT, NJ, CA, OH, AZ, NC, ME, IA, DE, DC, MD, WV, PA, MN

Year Founded: 2014

# of Investments: 575

# of Investors: 500+ (donors, funders, supporters, investors)

Funds Raised: $135,000,000 since inception

What’s on Omar’s Mind?

Book: The Color of Money

Song: Depends on the day

Podcast: Legacy of Speed