When Jan Ridgeway was asked to help revive the recently closed food pantry at Garden Valley Neighborhood House in Cleveland, Ohio, she thought it would be a nice way to give back during her retirement. Located in the Kinsman neighborhood, one of the poorest areas of the city, Garden Valley was an essential source of food for many residents.
“I said OK, I can do this one day a week,” Ridgeway, who spent her career working as a research librarian and in construction, recalled. “And within the first two or three weeks, I knew that it was a lot larger than one day a week.”
Before long, Ridgeway was the executive director of Garden Valley, which became a lifeline for many residents in the majority-Black neighborhood. It grew into the largest food pantry in northeast Ohio, sometimes feeding more than 30,000 people a month and providing everything from halal meals for Muslim families to food delivery for immunocompromised neighbors to children’s birthday cakes. Ridgeway also expanded the pantry’s programs far beyond food. Garden Valley hosted GED classes, trained people to work in construction, built a home health care program, and opened a vegan restaurant staffed by local teenagers — all free for participants.
But none of this was free for Ridgeway. She not only volunteered her time, but also funded much of the work out of her own pocket. “I was going broke,” she said. “And our utility bills — that was what just blew my mind. We were running sometimes 25 to 30 refrigerators and freezers 24/7 … There were times that my electricity was turned off at home so that I could pay it at the center.”
A local minister suggested Ridgeway consider putting solar panels on Garden Valley’s roof to reduce the electric bills. He put her in touch with RE-volv, a climate justice nonprofit that helps other nonprofits in underserved communities across the country go solar. With support from the Sierra Club and help from participants in Garden Valley’s construction program, RE-volv installed rooftop solar panels at Garden Valley in 2022. Since then, the organization’s utility bills have dropped considerably.
Not only did this ease Ridgeway’s financial burden — especially important as she underwent cancer treatment — but it also allowed Garden Valley to dedicate more time and money to its mission: serving the community.
Garden Valley is not alone. Since 2011, RE-volv has helped bring solar to dozens of nonprofits, typically resulting in electricity bill savings of at least 15%, according to the organization. And nonprofits like Garden Valley are now finding it easier than ever before to access cost-saving renewable energy.
When U.S. President Joe Biden signed the Inflation Reduction Act into law last year, he jump-started historic investments in clean energy and other green initiatives. While the funding for many aspects of this work is still being rolled out, many of its provisions promise to help organizations like Garden Valley more easily access renewable energy. Doing so will not just help fight the climate crisis, but also allow many historically marginalized communities to reap the benefits of the clean energy transition.
How the Inflation Reduction Act Makes it Easier for Nonprofits to Access Clean Energy
RE-volv was founded in 2011 to help under-resourced neighborhoods like Kinsman benefit from solar energy. “We need to make sure that communities are not left out of that opportunity — the jobs, the electricity savings, the air pollution reduction, and then just the resilience factor of having clean energy in their community,” said RE-volv founder and executive director Andreas Karelas.
RE-volv focuses on nonprofits — everything from churches to homeless shelters to health clinics and animal shelters — because they tend to be deeply rooted in local communities. And while the organization has helped more than 60 nonprofits gain access to solar over the past decade, it hasn’t been easy. In previous years, a key driver of the U.S. solar industry had been the federal solar investment tax credit (ITC), which allowed qualified commercial investors to receive a tax credit for as much as 30% of the cost of a solar installation — significant savings, especially when solar costs were much higher than they are now. However, this tax credit had its limitations.
Before the Inflation Reduction Act, Karelas explained, only homeowners and commercial entities with tax liability could claim tax credits when installing solar panels. That meant that for nonprofits to adopt solar, they often had to engage tax equity investors — large financial institutions that could fiscally benefit from tax credits by using them to reduce their federal tax liabilities. In addition to being logistically challenging, these arrangements came with significant transactional costs and administrative burdens, particularly for resource-strapped nonprofits.
One way the Inflation Reduction Act will make things easier is through creation of a new “direct pay” (or as the U.S. government calls it, “elective pay”) credit delivery mechanism. For the first time, governments and non-profits can directly access clean energy tax credits themselves without partnering with tax equity investors, receiving the tax credit in the form of a payment rather than a reduction in federal tax liability. Eligible entities include tribal communities and other groups that don’t pay federal taxes, such as nonprofits, municipalities, public power utilities and rural electric co-operatives. This means all RE-volv’s clients will now qualify for this credit, and the organization can pass the savings on to them.
The Inflation Reduction Act also offers bonus tax credits for certain projects that support job creation and the clean energy economy through labor and domestic manufacturing bonus credits, and for projects developed in certain priority communities. These include projects located in energy communities — those that have historically been centers of fossil fuel industry — and low-income and underserved communities. These bonus tax credits allow customers to add additional savings to the original 30% ITC credit.
Proposed guidance from the IRS makes it clear that other federal grants don’t reduce the tax credit basis. This means that when tax credits are combined with grants and other incentives, it’s possible for the majority of a clean energy project’s costs to be covered.
RE-volv’s work is also poised to benefit from the Inflation Reduction Act’s $60 billion in environmental justice-based climate investments — the largest amount in U.S. history. The environmental justice investments include the Greenhouse Gas Reduction Fund, which aims to mobilize financing and capital for clean energy projects, including solar projects that benefit disadvantaged communities.
The Ripple Effects of Solar Power in Disadvantaged Neighborhoods
Because Garden Valley’s solar panels have already been installed, the organization will not directly benefit from new incentives under the Inflation Reduction Act. But its solar panels are exactly the kind of projects that will get a boost moving forward. Rather than relying on complicated tax equity structures to pass through ITC savings, Garden Valley could reap the value of the tax credits directly. Additionally, since Kinsman is in an “energy community,” Garden Valley would be eligible for a 10% bonus credit on top of the 30% ITC.
And solar’s benefits go far beyond cost savings. “There were opportunities all the way around,” said Ridgeway. “The opportunity for the center to be able to reduce its costs, the opportunity for us to be able to further publicize and highlight the importance of solar energy, being able to do the work that we were doing with the food pantry, and the opportunity for the community to see [solar installation] as a viable career option for a community that had very, very high unemployment.”
If the Inflation Reduction Act’s climate investments are implemented to their full potential, the legislation can help the U.S. reduce carbon emissions 37%-42% below 2005 levels by 2030, closing in on the federal target of 50%. Among other impacts, this would save up to 3,900 lives annually by 2030 due to cleaner air — a shift that would likely especially benefit poor communities, people of color and other historically disadvantaged groups that suffer disproportionately from asthma and other pollution-related illnesses.
Even Ridgeway herself has changed her behavior thanks to the project. “I didn’t know I was green. Now I’m doing green at home … I signed up for recycling … but it started with Garden Valley.”
Karelas noted that there is often a ripple effect when solar power first appears in a neighborhood. “Some data suggests that for every single installation of solar in a community, you’re likely to see 100 additional installations in that community in just five years.”
Although Ridgeway stepped down as executive director of Garden Valley late last year, she remains involved in its programs to make sure the organization doesn’t lose its momentum. “I think this community needed someone to say, ‘I believe that you are worthy,’” she said. “‘I believe that you can help raise and lift your community yourself. You don’t need anybody coming in and deciding what’s best for you.”
