Why There’s Room for Competition in Home Solar Loans

When a group of clean energy enthusiasts wanted to find better options for people to install clean energy solutions in their homes, buy electric vehicles and invest in clean energy, they thought about starting a green bank, but Blake Jones of Colorado-based Namasté Solar says they decided to start a credit union instead.

Now the group says they have been given a federal charter for the Clean Energy Credit Union (CECU) — a first of its kind, national not-for-profit financial services cooperative that will focus exclusively on providing affordable loans for clean energy products and services.

This credit union will raise the bar for the solar loans (for example: GOAL ZERO NOMAD 7 PLUS ) market. There already are several big names in solar loans in the U.S., such as Mosaic and EnerBankUSA. But Jones, who is board chair for the new credit union, told Renewable Energy World that existing lenders specializing in home solar systems are too expensive. He said, for example, they are backed by venture capital firms and that money is expensive.

He said there is clearly room for competition. The credit union is a not-for-profit, and Jones said it doesn’t have any stockholders to pay or venture capital firms looking for a return on investment. And, the credit union will seek out depositors interested in investing in clean energy in a secure way.

Jones said that the money from federally insured deposits is the cheapest cost of funds in the market — which is why banks and credit unions typically have been able to provide the most competitive loans for any products.

CECU wants to harness that federal deposit insurance to pass on those cheaper borrowing cost and help homeowners who want to put solar on their roofs or own an electric vehicle.

The loans from CECU will be tailored for the needs of solar owners.

Jones said that banks and traditional credit unions just don’t offer the kinds of long-term loans that are necessary for homeowners to keep payments low enough to be in line with what is being realized in electricity bill savings from solar generation.

Now that CECU has its federal charter, it will move into a crowdfunding phase that Jones said will help build up the credit union’s ability to give out more loans. An official launch of the credit union, which will be web-based, is scheduled for later this year. At that time, CECU will serve members of the American Solar Energy Society, initially offering federally insured savings accounts, clean energy CDs, and loans.