JANUARY 6, 2023 MICHAEL SCHOECK
Solar Energy Loan Fund (SELF), a 501(c)(3) nonprofit organization that provides unsecured financing solutions that add solar energy and home improvement to residents of Florida and the Southeast United States, recently surpassed $30 million in total loans.
As a green bank and Community Development Finance Institution (CDFI), SELF lends to historically underserved and underbanked low- and moderate-income (LMI) communities such as retirees, working-class families, veterans, disabled homeowners, and disabled homeowners. presented the products. poor credit background.
SELF has made more than 3,000 green home loans, which average about $10,000 per loan, but can range up to $50,000 for rooftop solar, high-efficiency air conditioners, roofing repairs and other ongoing residential improvements.
“SELF is an implementation tool for redeveloping and building new sustainable, affordable housing while promoting green jobs, energy equity, sustainability and clean energy,” said Doug Coward, executive director of SELF. “LMI homeowners are the population most vulnerable to climate change, heat waves and extreme weather, and they have benefited the least from the booming clean energy economy.”
Based in Fort Pierce, Florida, SELF was founded in 2010 with a $3 million seed grant from the Department of Energy. The nonprofit organization is proud to be the first local national green bank. In recent years, SELF has expanded beyond Florida into Georgia, South Carolina, Tennessee, and Alabama, partnering with the Orlando, St. Petersburg, and Atlanta (Georgia) Housing Authority.
Unlike traditional banks, SELF breaks down traditional barriers by advancing financial inclusion and filling key gaps that have historically prevented LMI communities from accessing small loans for home improvements, including solar.
SELF has two dozen investors, including the KIVA.org crowdfunding platform, while more than 900 contractors in the Southeast can help customers get loans through SELF. The nonprofit leveraged the original DOE grant by a 13:1 margin and provided financial assistance to more than 9,000 people.
Maria Duanne Andrade, SELF’s chief financial officer, created the agency’s inclusive underwriting process based on a homeowner’s ability to pay their loan balance rather than a credit score-based rating system. Its lending system enabled the launch of its flagship Green Home Loan program for LMI homeowners with default rates of less than 2%.
“Green banks have the power to unlock economic, environmental and social benefits, especially in underserved communities,” Andrade said. “Financial systems are too dependent on credit scores, and traditional underwriting methods are leaving too many people behind.”
Self-financed loans are primarily funded by either crowdfunding or a mix of local banks, impact foundations, and faith-based institutions such as churches.
Port St. Lucie, Florida resident Ed Agliardo for the solar system at SELF and St. Lucie County received PACE funding.
SELF loan financing conditions:
Renewable Energy Projects: 8-9.5% with a loan term of 5 to 10 years APREnergy Efficiency Projects: 8-9.5% with a term of 3 to 5 years APRKIVA crowd-funded loans: 5% fixed interest with terms of 3-5 years
Residential projects eligible for funding are:
Weatherization and insulation Replacing inefficient air conditioning systems Solar thermal and solar photovoltaic systems Roofs, windows, doors and hurricane shutters Disability products and wear and tear in places MYSELF funds various home sustainability projects.
Green Bank meets Fintech
In recent years, SELF’s Andrade has put the loan originator into adjacent markets by providing green loan products to minority, small home owners and affordable housing developers, as well as a sewer loan product.
At the same time, the organization is trying to keep up with the emergence of financial technology applications that provide quick access to small loan products. In December, SELF’s plug-and-play fintech platform received a $3 million grant from JP Morgan Chase to provide capital to minority and startup affordable housing developers.
Other providers of secured and unsecured solar loans in Florida and the Southeast region include Climate First Bank, Dividend Finance, Sungage, Sunlight Financial, Sunnova Energy, Mosaic, GreenSky Credit and EnerBank USA, according to EnergySage.
According to Wood Mackenzie, the solar loan market grew 37% from 2021 to 2022. Homeowners see the biggest monthly savings on 25-year loans, which is the same as the warranty period of a residential solar installation.
Interest in residential solar financing will continue to grow as the Inflation Reduction Act (IRA) increases the solar investment tax credit by 30% for another 10 years.
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