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The Environmental Protection Agency on Thursday awarded $20 billion to help finance clean-energy projects across the country, marking one of the Biden administration’s biggest investments in combating climate change and curbing pollution in disadvantaged communities.

The money comes from the Greenhouse Gas Reduction Fund established by <a href="https://www.washingtonpost.com/elections/candidates/joe-biden-2024/" target=_blank>President Biden</a>’s signature climate law, the <a href="https://www.washingtonpost.com/us-policy/2022/07/28/manchin-schumer-climate-deal/" target=_blank>Inflation Reduction Act</a>. The fund seeks to leverage public and private dollars to invest in clean-energy technologies such as solar panels, heat pumps and more.

The program is potentially one of the most consequential — yet least understood — parts of the climate law. Because of the size of the spending, it is sure to be closely watched by opponents and supporters of the nation’s energy transition.

Simply put, the program allows people to access low-interest loans for clean-energy projects that they might not otherwise have received. Imagine a community group that wants to install <a href="https://www.washingtonpost.com/climate-solutions/2024/03/28/ev-charging-stations-slow-rollout/" target="_blank">electric vehicle charging stations</a> at its neighborhood recreation center but can’t get a loan from a bank or a lender. As is often the case, potential lenders say they’re hesitant to support a novel green technology or a business without a track record of success.

Low-income and minority communities have long encountered such obstacles in trying to attract private capital. The program aims to overcome this problem by providing a huge influx of federal cash — $27 billion in total — for nonprofit organizations to dole out to clean-energy projects nationwide. Each nonprofit will serve as a “green bank” that offers more favorable lending rates than commercial banks.

“It’s just really hard to get banks to bring capital into low-income communities, especially for these new projects that they’re not used to financing,” said Adrian Deveny, the founder of the firm Climate Vision and the former director of energy and environmental policy for Senate Majority Leader Charles E. Schumer (D-N.Y.), a key architect of the Inflation Reduction Act.

The new program, Deveny added, is “filling a really important niche in the market that’s not being served by commercial banks.”

The EPA is awarding money to eight nonprofits, which have committed to leverage nearly $7 in private capital for every $1 of federal investment. The nonprofits have also pledged to ensure that at least 70 percent of the funds will benefit disadvantaged communities, and that the financed projects will reduce up to 40 million metric tons of carbon dioxide a year — equivalent to the annual emissions of nearly 9 million gasoline-powered cars.

Power Forward Communities, a coalition of five nonprofit groups, will receive $2 billion to help homeowners and apartment building owners adopt energy-efficient appliances. Coalition member Rewiring America has already helped communities across the country swap out fossil-fuel-powered appliances for more efficient, electricity-powered versions.

When her water heater died last year, Mildred Carter of De Soto, Ga., couldn’t afford to replace it until Rewiring America got involved. The nonprofit helped Carter enroll in a program that provided incentives of up to $5,000 from Georgia Power, the local utility, for home energy-efficiency upgrades. Her new heat pump water heater was installed Dec. 23, just in time for the holidays.

Another nonprofit, the Coalition for Green Capital, will use a $5 billion award to establish a “national green bank,” co-founder and CEO Reed Hundt said. “We’re going to be able to cause about $100 billion of total additional investment over a seven-year time period with that number, because we can leverage it,” Hundt said.

Vice President Harris and EPA Administrator Michael Regan will deliver remarks on the program Thursday in Charlotte, where they will meet with residents of the historically Black community Grier Heights. The community is home to 49 energy-efficient affordable houses financed and built by Self-Help, a partner of Climate United, which will use a $6.97 billion award to support climate-friendly projects in homes, small businesses, schools and other organizations.

“This is a game changer for us and our partners to accelerate and scale the work that we’re doing,” said Beth Bafford, the CEO of Climate United.

More than a dozen states have already established green banks without waiting for the EPA, as have several clean-energy entrepreneurs. Reginald Parker, the president of a solar company called Optimal Technology Corp., co-founded Freedmen Green Bank &amp; Trust last year to help communities of color access funding from the climate law.

Freedmen is helping to finance solar panel installations at several historically Black colleges and universities in the Atlanta area, Parker said. It also helped finance solar and battery storage systems at two recreation centers in the Detroit suburbs, allowing the centers to lower their energy bills and increase their resilience to extreme weather events, he said.

“People in these communities are usually what we call the first, worst and hardest-hit by climate change,” Parker said. “This can give them the climate resiliency that they deserve.”

Republicans on Capitol Hill have slammed the Greenhouse Gas Reduction Fund, saying it lacks oversight and seems ripe for abuse. Rep. Gary Palmer (R-Ala.) has introduced <a href="https://www.congress.gov/bill/118th-congress/house-bill/1023#:~:text=Passed%20House%20(03%2F22%2F2024),-Cutting%20Green%20Corruption&text=This%20bill%20repeals%20certain%20programs,communities%20reduce%20greenhouse%20gas%20emissions." target=_blank>legislation</a> to repeal the program, which he <a href="https://palmer.house.gov/media-center/in-the-news/exclusive-bill-would-eliminate-bidens-27b-green-slush-fund" target=_blank>has called</a> a “slush fund” meant to benefit liberal groups that support Biden. The House last month passed Palmer’s bill, which Biden has <a href="https://www.whitehouse.gov/wp-content/uploads/2024/03/SAP-HR1023.pdf" target=_blank>vowed to veto</a> should it reach his desk.

Other Republicans have warned that the program could squander taxpayer dollars, just as when the solar panel manufacturer Solyndra <a href="https://www.washingtonpost.com/politics/solyndra-solar-company-fails-after-getting-controversial-federal-loan-guarantees/2011/08/31/gIQAB8IRsJ_story.html?itid=lk_inline_manual_17&amp;itid=lk_inline_manual_33" target="_blank">filed for bankruptcy</a> in 2011 after receiving $535 million in loans from the Obama administration. Rep. Cathy McMorris Rodgers (R-Wash.), who chairs the House Energy and Commerce Committee, has said the climate law could lead to “Solyndra on steroids.”

But supporters say the program will play a crucial role in reducing energy consumption, creating clean-energy jobs and delivering on Biden’s <a href="https://www.washingtonpost.com/climate-environment/2021/01/26/biden-environmental-justice-climate/" target=_blank>environmental justice goals</a>. Under the Justice40 initiative, the Biden administration is seeking to direct at least 40 percent of the benefits of federal climate spending to disadvantaged communities that have historically borne the brunt of pollution.

The new program “is a game changer,” Parker said, because “people who are overlooked, underestimated and underserved now have a seat at the table.”

Dateline Award from the D.C. Chapter of the Society of Professional Journalists, 2021

Brown University, BA in English

Maxine Joselow is a staff writer who covers climate change and the environment.

Maxine Joselow

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Biden EPA awards $20 billion to finance local clean-energy projects

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Recipients of Green Banks to leverage public dollars for private investment in sustainability initiatives, on December 13 in Takoma Park, MD.

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