This article first appeared on Climate & Capital Media.
Getting solar energy into minority communities in America’s south may sound challenging, but Clearloop, a firm that measures the carbon footprint of companies and offers offsets through new solar energy projects, is doing just that. The company is committed to expanding access to renewable energy in U.S. communities not only left behind but heavily dependent on fossil fuels.
"We’re looking at how distressed a community is and layering that analysis into our exploration," said Laura Zapata, Clearloop’s chief executive officer. "This is something that we’re really trying to be thoughtful about because of where we’re coming from, as people from the middle part of the country."
Clearloop was founded by three Tennesseans committed to bringing domestic renewable energy to America’s southern states, a region long dependent on coal and ranking as the sixth-largest global carbon emitter. The founders also saw a need by smaller companies under pressure from bigger suppliers to offset the carbon footprints of the products they make. For many companies, the carbon offset market is bewildering and opaque — more designed for giant corporations than the myriad smaller companies in massive corporate supply chains. Clearloop clients tangibly offset and lower their carbon footprint by putting capital towards the installation of solar farms in communities with particularly dirty electricity grids and by making it easy.
The idea for Clearloop came from former Tennessee Gov. Phil Bredesen, a maverick Democrat and entrepreneur. Zapata, a long-time communications executive, had worked on Bredesen’s unsuccessful run for Senate in 2018. Bredesen approached Zapata and their former campaign manager, Bob Corney, to figure out if the idea of turning carbon offsets into renewable energy development could be a business. The three of them launched Clearloop together, and shortly thereafter, Zapata was asked to be CEO. For a child of immigrants who moved from Colombia to the United States when she was 10, it was the opportunity of a lifetime.
"The idea was very simple. Lots of companies want to claim that they’re taking climate action," she said. "But sometimes it’s not clear to the consumer how [companies] are cutting their carbon footprints. We ask how [Clearloop] can do something to take a company’s carbon footprint out of the electricity grid."
Our thesis is that we can bring money to the forefront of the energy transaction and sell off the green stuff, be it the carbon offsets or the environmental credits from a particular renewable project, which then triggers construction.
Zapata brings a unique perspective to climate finance focused on the need to expand and include all races and communities. As a woman from a Latino-American community whose perspective has been largely underrepresented, she’s an asset to a company focused on installing renewable energy in minority communities.
"I found that being back [in Tennessee] and being able to do more in this community was really meaningful," Zapata said. "This community welcomed my family and embraced us, so it was always an important part of what I’ve learned to do with my life; to try and figure out how I could give back to that community."
Zapata is operating in a space dominated by white men. This, she said, is nothing new to her.
"I’ve worked in three different sectors that are all fairly dominated by white men," she said. "I see that my lived experiences have given me a different lens and, because of that, my voice is valuable in [work] conversations. I learned early on that it’s really important to just have your voice in the room, and sometimes that means elbowing your way in."
Clearloop launched its first solar power project in Jackson, Tennessee. The array will produce one megawatt of energy, enough to power 200 local homes, and will be the first utility-scale solar farm in the U.S. directly financed by solar offsets. Zapata acknowledges that this project is small in the grand scheme of utility-scale solar projects, but believes that its location and the people it will benefit underscore its importance. Renewable energy accounts for just 0.4 percent of Tennessee’s electricity grid despite the abundant sunlight in the state year-round. Because of this, the companies that helped finance Clearloop’s Tennessee project will directly see how their dollars are offsetting the carbon they produce.
The financing of Clearloop’s Jackson project is quite different from that of most renewable energy installations. For the past decade, renewable energy projects have been financed by a complex transaction called the power purchase agreement, essentially a contract between two parties where one is looking to produce energy and another is looking to purchase energy, preferably at a set price over a period of time.
Historically, this type of contract has almost exclusively been offered to companies with high credit ratings. So, for example, if a company such as Google tells a developer that it is willing to buy power from a solar project for 10 years, banks see no risk in providing capital for the project because of Google’s fantastic credit rating. But thousands of smaller companies want to help facilitate the construction of renewable energy sources who may not receive bank financing because they may appear to pose too great a financial risk.
"Our thesis is that we can bring money to the forefront of the energy transaction and sell off the green stuff, be it the carbon offsets or the environmental credits from a particular renewable project, which then triggers construction," Zapata said.
Because of Clearloop’s unique financing method, more companies are able to get involved. The Jackson project has the backing of companies of all shapes and sizes, from global technology platform Intuit and eco-detergent maker Dropps to Material Bank and individuals such as singer-songwriter Jason Isbell and children’s book author Stacy Clark.
All of these folks come together and basically crowdfund the capital to be able to build this [project].
Through Clearloop’s financing model, all sorts of companies are able to combine forces to make a positive impact. "All of these folks come together and basically crowdfund the capital to be able to build this [project]," she said.
Clearloop is planning on building projects throughout the continental U.S. "We forecast over the next year that we’re going to see some great growth because more and more companies are making climate commitments," Zapata said.
With the construction of one project underway, Clearloop is also proving its bona fides as a serious operator in the renewable energy space. The company has yet to conduct an official round of funding but is looking to scale.
In a world where climate change has risen to the forefront of investors’ minds, Clearloop’s approach to helping companies cut their carbon footprint through renewable energy projects in diverse communities is refreshing and unique. It also has the potential to be significantly impactful. Clearloop’s approach, with Zapata’s leadership, is what’s needed to help facilitate the transition to a green economy in communities nationwide.