By Ray Birch
NEW YORK—One organization believes that all it will take to jump start solar lending within credit unions is a little education.
To that end, Inclusiv has launched a training program designed to give community-based credit unions the tools they need to offer solar lending to members—not only giving credit unions a new income stream but getting solar power to underserved communities that need the clean energy source the most, the association said.
“Some credit unions have been doing solar lending, but we think our program can really help spread solar loans within CUs,” said Pablo DeFilippi, SVP of membership and network engagement at Inclusiv. “It can be a really good for our industry and the credit union principles, and also bring in new, younger borrowers.”
Goal of Program
In late 2020 Inclusiv announced the launch of a free virtual Solar Lending Professional Training and Certificate program that delivers training in solar power lending to community-based financial institutions. The program is designed to increase access to solar financing for individuals and small businesses in low-income communities and communities of color.
DeFilippi said the new loan product will also help address the abundance of liquidity now within credit unions.
“Credit unions are always looking for additional revenue sources, but with solar, they often don't have the expertise to run such a program. They need the training,” he said.
Inclusiv began offering the program in December, with the online course offering eight modules that can be completed in six weeks, DeFilippi said.
DeFilippi stated the training can be a big boost to small credit unions that are desperately seeking new income streams.
“But this program is not just for small credit unions,” explained DeFilippi. “We believe it opens a whole new line of business for the industry, plus it will help us connect with a younger demographic that really cares about the environment.”
A New Generation of Power Generation
DeFilippi said younger consumers are more environmentally conscious than their parents.
“They are concerned about the environment,” he said. “They no longer want to be enablers of the old industry and its impact on the environment. This can not only be a new revenue stream for credit unions but also a market differentiator.”
The training also will help credit unions provide low-income members with an affordable energy source.
“This, too, is about credit unions helping their own communities become more sustainable and resilient,” DeFilippi said. “Think about it, right now clean energy is being driven more by lifestyle choices, meaning that people who have money want to do this. But what about the people who don’t have money, who could benefit from having their electric bill cut by two-thirds? If we can help credit unions introduce solar lending to their underserved communities and retrofit low-income housing…these are the people who really need this kind of energy.”
Solar energy, too, would be beneficial when natural disasters strike and cut off power to homes.
Pablo DeFilippi
“Think about what has been happening with the fires in California and Colorado, when you have a situation where the electrical system goes down. What if you don’t have a generator, and running a generator can be very expensive,” he said.
Gaining the Expertise
But it takes expertise to underwrite loans for solar equipment. DeFilippi suggested the necessary expertise has been growing within credit unions.
“It's a little bit like small business lending; if you don't have the expertise you really should not be in that market,” he said, noting having the underwriting skills for solar loans is critical.
That includes having an understanding of all of the federal and state subsidies are available for solar projects.
“And these subsidies can make these loans even less risky than a standard loan you make to a member,” DeFilippi said. “For example, some states will offer guarantees on these loans.”
About the Program
The program has been developed by the Inclusiv Center for Resiliency and Clean Energy and the University of New Hampshire Carsey School of Public Policy Center for Impact Finance, with major funding from the U.S. Department of Energy Solar Energy Technologies Office.
The series will be divided into two tracks: Consumer Solar Lending and Commercial Solar Lending. Each training course will last for six weeks and each track will be offered four times a year. The virtual training launched in and will be available free to lending professionals at community-based financial institutions interested in building, or refining, solar lending programs at their institutions.
“The training sessions will bring together small cohorts of lending professionals with high capacity to implement solar loan programs at their institutions,” DeFilippi said. “Each cohort will participate in a combination of weekly, instructor-led, live Zoom sessions and self-paced lectures and homework assignments and will earn a Solar Lending Professional Certificate.”