emphasizing stability and long-term performance. Once systems are installed and operational, Lumifi sells them to banks under a sale-leaseback structure. The bank becomes the tax owner of the solar assets, and leases them back to Lumifi, who essentially stands in for the consumer, under a long-term master lease. As tax owner, the bank receives: • 30-50% federal investment tax credits, depending on project qualification • 100% bonus depreciation, recognized in the first year • Contracted lease payments that provide ongoing cash yield • Favorable GAAP accounting earnings For many banks, tax benefits represent a significant portion — often the majority — of total investment return, with the remainder coming from predictable lease payments. Why This Fits Community Banks Unlike traditional tax credit investments such as LIHTCs or NMTCs, solar tax benefits are realized quickly, and GAAP earnings are always positive. Both the ITC and bonus depreciation are available once the system is placed in service, allowing banks to align tax planning with near-term earnings and capital management objectives. Residential solar portfolios also offer: • Diversification away from traditional loan products • Granular risk exposure across thousands of end users • Asset lives measured in decades, with contracted revenue streams Importantly, these structures are designed to fit within existing regulatory frameworks. Solar ownership has long been recognized as a permissible activity for national banks under OCC guidance and rulemaking, and similar authority exists for state-chartered institutions when properly structured. Underwriting Matters Not all solar assets carry the same risk profile. Successful participation requires diligence across multiple layers: • Counterparty strength and servicing capability • Portfolio-level performance and degradation assumptions • Contract enforceability and system warranties • Structural protections within the lease framework By partnering with an entity with a proven structure in place focused exclusively on residential solar with institutional standards, banks can access assets that have already been underwritten, aggregated and standardized for financial ownership. Beyond Returns: Community Impact For many community banks, investing in residential solar aligns naturally with broader community development and sustainability goals. Financing energy infrastructure for owner-occupied homes reduces household energy costs, supports grid resilience and contributes to emissions reduction — benefits that can be measured and reported alongside financial performance. As distributed energy continues to scale, community banks are no longer spectators. With the right structure and partner, solar ownership has become an accessible, tax-efficient asset class that fits squarely within community banking’s risk discipline and mission. Lumifi is a national energy infrastructure company that partners with institutional investors to expand access to residential solar through long-term power purchase agreements and leases with prime-rated homeowners. Utilizing a sale-leaseback structure, Lumifi enables banks and credit unions to acquire high-quality distributed solar assets and benefit from federal incentives — providing investment tax credits and bonus depreciation to taxable owners and direct pay ITCs to tax-exempt institutions — while Lumifi retains operational responsibility under a long-term master lease. With a focus on rigorous underwriting, standardized contract terms and scalable portfolio development, Lumifi delivers reliable cash flow, measurable community impact and a disciplined path to renewable energy ownership. Colorado Banker 20
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