SENNA

Communities Tap Resilient Local Financing for Energy Transition

Mercer County, Ill. - A rural Illinois county of just 15,000 residents has found a creative way to finance its transition to clean energy. A new five-megawatt community solar project, backed by a blend of equity, incentives and subscriber revenues, is providing energy savings and climate benefits to 850 local households.

The project, financed by infrastructure investor Generate Capital, represents a model for how communities across the U.S. are building durable financing structures to weather political and market volatility. "This is resilience by design - not just for infrastructure, but for the financing behind it," said Nick Gower of HIP Investor, who advised on the project.

Rather than relying solely on municipal bonds, grants or one-off policy incentives, the Mercer County solar farm layers multiple forms of capital - equity, debt, state incentives, federal tax credits and subscriber revenues. This risk-balanced "capital stack" is intended to keep the project viable even as policies and markets shift.

"Communities are confronting the need to build financial architectures for projects that deliver economic savings and climate action despite political cycles, policy shifts and market volatility," Gower explained.

The layered financing allowed the project's backers to offer predictable energy savings to local households, while also generating community benefits. Over a decade, the city of Fremont, California saved $250,000 through a similar solar-plus-storage microgrid project structured as a power purchase agreement.

"Performance-based partnerships can turn resilience into revenue," said Gower.

Across the country, cities, counties and community groups are exploring innovative financing models to fund the transition to clean energy and climate resilience. Experts say the key is creating capital stacks that combine multiple sources - from catalytic philanthropy to private credit - to spread risk and ensure long-term viability.

"This allows each layer of capital, from grants to private finance, to operate according to its unique strengths, risk tolerance and purpose," said Gower.

As the energy transition accelerates, resilient local financing will be critical to delivering the economic and climate benefits to communities nationwide, the experts say. The Mercer County solar farm shows how creative capital structures can make that vision a reality, even in the smallest rural counties.