Bright fu­ture for so­lar lend­ing

Credit Union Journal - - Front Page - BY MICHAEL BARTLETT

WITH ITS RES­I­DEN­TIAL SO­LAR LOANS pro­gram go­ing strong, $2.4 bil­lion Tech­nol­ogy Credit Union, San Jose, Calif., is branch­ing out with a so­lar fi­nanc­ing pro­gram for its com­mer­cial, non-profit and gov­ern­ment mem­bers.

Ac­cord­ing to Joe An­za­lone, Tech CU’S chief com­mer­cial bank­ing of­fi­cer, the pro­gram will al­low mem­bers to fi­nance so­lar en­ergy sys­tems rang­ing in price from $100,000 to $2 mil­lion with no money down. All fi­nanc­ing will be struc­tured so that the sav­ings from us­ing so­lar en­ergy will cover the cost of the fi­nanc­ing over time.

The credit union is draw­ing on its own ex­pe­ri­ence: it in­stalled so­lar grids in the park­ing lot of its head­quar­ters in 2016, al­low­ing it to shrink its non-re­new­able en­ergy con­sump­tion by nearly 30 per­cent.

For the new com­mer­cial so­lar fi­nanc­ing pro­gram, Tech CU is work­ing in con­junc­tion with Belvedere So­lar Fi­nance. “I was able to work with Belvedere when I was at a pre­vi­ous fi­nan­cial in­sti­tu­tion seven or eight years ago. I wanted to do a ver­sion of the same pro­gram at Tech CU, so I put to­gether a com­mer­cial so­lar pro­gram.”

Tech CU is tar­get­ing small man­u­fac­tur­ing firms, gro­cery stores, gas sta­tions and cer­tain non-profit or­ga­ni­za­tions. “All of these com­pa­nies see ris­ing util­ity costs and the ben­e­fits of us­ing so­lar ver­sus pay­ing their util­ity com­pany,” he said. “We struc­ture five- to 10-year fi­nanc­ing so the cost is less than their util­ity bill. There is a lot of de­mand for this based on that eco­nomic ra­tio­nale. Loan sizes typ­i­cally range from $200,000 to $2 mil­lion.”

Though com­mer­cial and res­i­den­tial so­lar loans have much in com­mon, An­za­lone said the key dif­fer­ence is the risk in­volved. “The un­der­writ­ing is dif­fer­ent. We have to price per the risk pro­file, the abil­ity to re­pay by the bor­rower and we price ac­cord­ingly once we eval­u­ate their cred­it­wor­thi­ness. We try to make an at­trac­tive equip­ment loan for them.”

Tech CU be­lieves there is a “grow­ing pipeline” for com­mer­cial so­lar lend­ing. An­za­lone said Belvedere will iden­tify prospects and do the un­der­writ­ing at the front end, in­clud­ing the doc­u­men­ta­tion of the bor­rower. “They know how to un­der­write these loans, and will bring a com­plete pack­age to us for ap­proval,” he said.

“This is a great pro­gram for us. It al­lows us to re­ally scale,” An­za­lone con­tin­ued. “This is a pro­gram that should do $5 mil­lion to $10 mil­lion per year. That is our rough es­ti­mate right now.”

“Belvedere says we are the first credit union they have worked with,” he added. “They do work with some com­mer­cial and com­mu­nity banks. We are very ex­cited about this. It is a real dif­fer­en­tia­tor for us.”

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