Power Forward Communities Awarded $2 Billion To Decarbonize US Homes

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Power Forward Communities is a coalition formed by Enterprise Community Partners, Rewiring America, Habitat for Humanity International, the Local Initiatives Support Corporation, and United Way Worldwide. Its purpose is to transform the housing sector, save homeowners and renters money, invest in stronger communities, and help meet national climate goals. On April 4, 2024, the group was awarded a $2 billion, seven-year National Clean Investment Fund (NCIF) grant from the Environmental Protection Agency to provide capital for affordable residential decarbonization throughout the country, with a specific focus on low income and disadvantaged communities.

Many homes in America waste a lot of the energy they consume because much of it leaks out into the atmosphere through drafty windows, doors, and poorly insulated roofs. It’s all well and good to provide tax credits for upgrades to homes, but that doesn’t help those who rent or who rely on social security, disability, or other fixed income arrangements, and yet their homes are the ones that need energy abatement strategies the most. Power Forward Communities exists to address the needs of those homeowners.

The five founding organizations will collectively harness decades of experience and nationwide reach to deploy a unique combination of financing, market building, and community engagement strategies from big cities to small towns to rural and Tribal regions and everywhere in between. These efforts are expected to save families money on their utility bills, reduce emissions, and create healthier, safer, more affordable homes. To date, 321 organizations in 156 communities across 46 states in every EPA region, are supporting the Power Forward Communities goal to decarbonize homes nationwide.

Power Forward Communities Secures $2 Billion In Funding

“President Biden and Vice President Harris have put communities at the center of their Investing in America agenda. Today, we’re putting an unprecedented $20 billion to work in communities that for too long have been shut out of resources to lower costs and benefit from clean technology solutions,” said EPA Administrator Michael S. Regan. “The selectees announced today will deliver transformational investments for American communities, businesses, and families and unleash tens of thousands of clean technology projects like putting solar on small businesses, electrifying affordable housing, providing EV loans for young families, and countless others. That translates to good-paying jobs, energy bill savings, and cleaner air, all while delivering on President Biden’s historic agenda to combat climate change.”

Tim Mayopoulos is the  CEO of Power Forward Communities and former head of Fannie Mae, the nation’s leading source of housing finance. After the EPA announcement, he said, “The Inflation Reduction Act provided the single largest investment in climate solutions in U.S. history, including much-needed capital to improve American homes and serve low-income and disadvantaged communities. This initial funding can unlock billions of dollars of additional private capital to make the housing sector a key contributor to meeting our climate goals and make the climate imperative a new driver of affordable and healthy housing solutions.”

A Focus On Four Key Areas

Power Forward Communities has devised a strategy to decarbonize housing focuses that focus on four key ares:

• Reduce friction: Right now, homeowners and housing providers must navigate a complex web of regulations, incentives, tax credits, and systems. Power Forward Communities’ goal is to simplify the process and experience of household decarbonization with online tools, community-level assistance, and market partnerships.
• Aggregate consumer demand: Working with communities, contractors, and local governments, Power Forward Communities will bundle opportunities to create market leverage that benefits consumers, reducing remaining costs by as much as 50%.
• Create affordable financing solutions: Power Forward Communities will deploy NCIF funds as below-market-rate lending products to help close the gap between decarbonization costs and existing incentives.
• Create a more equitable future: The coalition will invest in workforce development to create local, high-paying jobs and work with private investors and philanthropies to attract additional resources to improve and decarbonize even more American homes over the long term.

Through the NCIF, Power Forward Communities will provide financing to homeowners and apartment building owners across the country to upgrade appliances, weatherize homes, and make them more efficient and less expensive to operate. For local and state governments, Power Forward Communities will leverage public and private investments to help government partners achieve affordable housing and clean energy ambitions, and for investors, Power Forward Communities will create new opportunities to deploy sustainable capital for measurable and lasting impact on families, homes, communities, and the climate.

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Thoughts From Power Forward Communities Members

“The path to a more equitable, more resilient future runs through our homes and communities,” said Shaun Donovan, CEO of Enterprise Community Partners and chair of the Power Forward Communities board. “Through this endeavor, we’re committed to making American homes safer, healthier, and more affordable. Amid rising housing costs and a changing climate, Power Forward Communities stands ready to drive a vision of transformation that ensures no one is left behind.”

Ari Matusiak is the CEO of Rewiring America and vice chair of the Power Forward Communities board. He said,  “Forty two percent of US energy emissions come from the cars we drive, appliances we use in our homes, and what choices we make with our utility companies about how to power it all. These are emissions we can eliminate — and bills we can lower — with heat pumps, heat pump water heaters, solar panels, home batteries, EV chargers, and more. This funding, working with the rest of the IRA, will catalyze the renewal of American homes by attracting additional private capital that will far outlast this public investment. That stream of affordable capital will make the upfront investment in these more efficient and cheaper-to-operate appliances and vehicles pencil out for families and communities all across our country.”

“Here is the simple truth: climate resilience is an economic imperative for families and communities, no matter where they are located,” said Michael T. Pugh, CEO of LISC. “By investing in the well being of our built environment — especially in underserved communities — we can make homes healthier and more affordable. We can help people better withstand high-intensity storms, while mitigating heat islands and pollution. And we can create quality jobs that offer strong incomes and career pathways for growth. With this vital federal funding, everyone wins.”

“At United Way we work with our neighbors to build resilient communities that can successfully adapt to any challenge,” said Angela F. Williams, CEO of United Way Worldwide and member of the Power Forward Communities board. “With our deep presence in 95% of U.S. communities, and the collective impact of our wonderful partners, we have an unprecedented opportunity to advance health, economic prosperity, and environmental sustainability for individuals and families across America. Together, we have the power to make life healthier, happier, and more affordable for millions of people, while creating impact at a scale that will benefit the planet for generations to come.”

“In the U.S. we are dealing with dual challenges of a historic low supply of affordable home ownership options and climate change,” said Habitat for Humanity International CEO Jonathan Reckford. “Habitat is committed to addressing these challenges head on with the Power Forward Communities coalition. We have seen how adequate, safe and resilient shelter can contribute to both the immediate security and long-term well-being of families while reducing a home’s environmental impact. We look forward to implementing this program nationally to ensure households are not left behind as we build now and for the future.”

In the months ahead, Power Forward Communities will finalize the design of financial products and cement local community partnerships to ensure its programming largely benefits low-income and historically disinvested communities. It looks forward to beginning its programming this fall. Interested community organizations, governments, partners, and technical assistance providers can learn more by visiting its website.

The Takeaway

This announcement comes at a critical moment. The only way to reduce greenhouse gas emissions is to use the fossil fuels we extract and burn more efficiently as we search for ways to eliminate them altogether. The built infrastructure targeted by Power Forward Communities contributes a disproportionate amount of those emissions for any number of economic, political, and social reasons. It seems every day there is news about how the Inflation Reduction Act is putting Americans to work building a low emissions economy. This grant from the EPA is hugely important and the organizations that have banded together to create Power Forward Communities are to be congratulated  for envisioning how to leverage the IRA to benefit all Americans.

The work of the group will help to offset the disastrous decision by the International Code Council recently to reject the advice of its staff and knuckle under to pressure from the American Gas Association, which disapproves of pre-wiring new buildings for heat pumps, induction stoves, and EV chargers. The council folded up like a cheap suit when AGA lobbyists came calling. The initiative from Power Forward Communities will help some of the damage from the code council’s decision.