When Marcus Jones and his business partner, Akunna Olumba, set out to open a pizzeria in Detroit, they spoke with banks about their green vision: solar panels on the roof, an energy-efficient tankless water heater and a rooftop system to capture storm water.
“The lenders thought we were crazy,” Mr. Jones said. Traditional banks were skeptical that such investments would yield a return, and few had ever issued loans for clean energy or efficiency measures. They told the restaurateurs that it simply was not done.
Instead, the pair connected with a so-called green bank, one of a growing number of entities that lend money to businesses and individuals for equipment or technology that reduces the pollution driving climate change.
The movement will get a $20 billion infusion from the Biden administration on Thursday in what Vice President Kamala Harris calls “the largest investment in financing for community-based climate projects in our nation’s history.”
The Environmental Protection Agency plans to award grants ranging from $500 million to $6.9 billion to eight nonprofits. The organizations will in turn use the money to offer loans to businesses, homeowners and others to spur clean energy across the country, particularly in low-income neighborhoods.
Loans could be for something as small as helping one family purchase an electric induction stove or as ambitious as helping to build energy-efficient low-income housing.
“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,” Michael S. Regan, the administrator of the E.P.A., said in a statement.
Republicans, however, have slammed the money as a “greendoggle” and said that the E.P.A. is not prepared to oversee such a large program. House Republicans passed a bill in March that would repeal the greenhouse gas reduction program.
President Biden threatened to veto the measure if it were to reach his desk, and it has not come for a vote in the Senate. Representative Gary Palmer, the Alabama congressman who wrote the bill, called the E.P.A. initiative a “Green New Deal slush fund” that “raises many concerns about lack of accountability and oversight.”
The Biden administration is working to quickly distribute money from the program before January 2025, when a future administration or a Republican-controlled Congress could eliminate the funds.
The administration estimated the program would attract about $150 billion in private capital, or about $7 for every federal dollar spent. The awardees have committed to collectively cut or avoid up to 40 million metric tons of carbon dioxide emissions in the next seven years. That would be the equivalent of taking about 9.5 million cars off the road for a year.
Mr. Regan said the new network of clean energy financing would “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.”
The $20 billion comes from the 2022 Inflation Reduction Act, President Biden’s signature climate law, which included $27 billion for a program known as the Greenhouse Gas Reduction Fund.
The biggest grants under the program include $6.97 billion to a coalition called Climate United Fund, which is led by Calvert Impact, a nonprofit investment firm. The Coalition for Green Capital, a nonprofit founded by Reed Hundt, a former chairman of the Federal Communications Commission, was awarded $5 billion. Power Forward America, which is made up of five climate and housing organizations, was awarded $2 billion.
The idea for the Greenhouse Gas Reduction Fund goes back more than two decades, when a group of financiers proposed the idea of a national bank that could attract private investment by pumping public money into things like electric vehicle charging station networks, community solar projects and other renewable energy adoption.
The E.P.A. program is similar to that concept, but instead of one national bank, the agency is funding the different nonprofit groups, which will act as lenders.
“This has been a long road to get here,” said Senator Chris Van Hollen, Democrat of Maryland, who introduced legislation in 2009 to create a green bank.
Mr. Van Hollen said he expects the funding will make a significant difference in low-income communities where residents may be less likely to take advantage of federal tax incentives that are available for electric vehicles or certain home appliances, like induction stoves and heat pumps, because they lack the upfront cash to make the purchase.
“We don’t want any community to be left behind in the transition to the clean energy economy,” he said.
One grant recipient, Rewiring America, currently does work in communities like De Soto, Ga., a rural area where it has made loans and awarded grants to help about 78 families upgrade appliances and weatherize homes.
Mildred Carter, 73, said when the water heater in her De Soto home gave out last year she thought, “Oh my God, not this now on top of everything else, I can’t afford a new water heater.” Retired after 21 years working at Walmart, Ms. Carter said she went without hot water for two months before she found Rewiring America and applied for a grant for a free electric heat pump and installation.
Ms. Carter said she is concerned about clean energy and climate change. But when it came to her heat pump, she said, “At the time I didn’t care, I just wanted to make sure I had hot water.”
In Detroit, Mr. Jones and Ms. Olumba’s restaurant, Detroit Pizza Bar, has been open for two years and is the first Black-owned pizzeria in the city’s Livernois Six-Mile area. It also is the first sit-down restaurant in the area in more than three decades.
Mr. Jones said the money he borrowed from Michigan Saves, a nonprofit, to purchase solar panels and energy efficiency measures has more than paid off. He said his customers only notice the solar panels and rooftop rain barrels when he points them out. “They’re coming for pizza,” he said.
Vice President Harris and Mr. Regan were expected to announce the awards in Charlotte, N.C.
