Cambridge Housing Authority to Install Solar Panels on Affordable Housing Buildings, Despite Questions Over Federal Funding

The Cambridge Housing Authority will finance a $4.9 million investment to add solar panels to eight CHA properties, despite funding uncertainty from the federal government.

The new installations are expected to be completed by April 2026. They will increase the city’s current solar energy production by 228 percent — enough to power 141 affordable housing units across Cambridge — with the potential for expansion.

But while the project was set to be financed through a combination of city investment and federal tax credits from Biden’s Inflation Reduction Act, CHA officials are anticipating a potential elimination of the policy.

The CHA has been working on installing solar panels at its Jefferson Park apartments since 2018 but originally struggled to find a viable method to finance the project.

“We haven’t had a path forward,” Margaret Donnelly Moran, deputy executive director of the CHA, said. “And, it’s been one that we’ve been seeking since 2018.”

In 2018, non-profit agencies like CHA were ineligible for green energy tax credits, meaning the organization relied on power purchase agreements with private companies rather than directly owning the solar panels.

Under the power purchase agreement model, CHA would agree to purchase clean energy from a private company at a fixed rate, while the company would cover the cost of installing the solar panels. If the solar panels proved more efficient than expected, the for-profit developer would reap the profits, while CHA would still be locked into paying the higher fixed prices.

But Biden’s Inflation Reduction Act in 2022 made non-profits eligible for green energy tax credits, enabling CHA to create a new, more independent financing model.

CHA created CHA Solar LLC to install the solar panels and qualify for the tax credits. This means the group would own the solar panels and be able to reinvest their profits into a revolving loan fund supporting future clean energy projects.

“Some of the added proceeds that we have would actually allow us to fund or support future solar installations at other sites or do other energy efficiency measures that are a little bit harder to finance or fund ourselves,” Moran said.

The tax credits not only allow CHA to finance future clean energy projects, but it opens a door to secure more favorable deals than the power purchase agreements with private energy companies.

“Now, our power purchase between CHA Solar and a particular building gives that building a 20 percent lower cost on their electricity,” Tina Miller, an energy manager for CHA, said.

A portion of the $4.9 million dollars the CHA authorized last week is expected to be financed through the tax credits once the project is completed. CHA Solar LLC will use the tax credits to repay the CHA for the funds it loaned them to install the solar panels.

“Once the construction is completed, CHA will pay back CHA using the solar assessment tax credits and bonus credits that it anticipates it will receive,” CHA Commissioner Elaine DeRosa said.

The rest of the funding will come from the City of Cambridge, which will use a portion of its American Rescue Plan Act fund to finance the project. This brings the total investment by the CHA from $3.5 million down to $2.8 million.

But the CHA Board of Commissioners is uncertain whether the Trump administration will continue to provide the bonus credits.

“The concern was that the kind of more traditional credits are a little bit more solid, it’s the bonus ones that may be more at risk,” DeRosa said.

Despite the concerns of not getting the bonus credits, CHA has decided it will continue with the project.

“It might take us longer to pay it off, but we would still move forward,” Moran said.

— Staff writer Diego García Moreno can be reached at diego.garciamoreno@thecrimson.com.

— Staff Writer Summer E. Rose can be reached at summer.rose@thecrimson.com.