Donald Trump’s election has led many environmentalists to despair over the federal government’s stance towards clean energy and regulations. Even with states and cities trying to take the lead on fighting climate change, how much can they accomplish when the federal government has different aims, priorities, and philosophies?
A new consumer credit union launching later this year wants to give people a way to make a difference, all with the full faith and credit of the federal government.
The Clean Energy Credit Union (CECU), set to launch by the end of the year, will soon enable consumers in all 50 states to take out loans focused on promoting clean energy, such as installing solar panels, making energy efficient retrofits, or buying an electric car. By creating a lender that only focuses on clean energy, the first-of-its-kind CECU will be more responsive to consumers, be able to offer better loan terms, and therefore accelerate adoption of new technology. With the U.S. solar market growing by 95 percent in 2016, Jones sees opportunity.
“We’ll be more up to date on it than any other lender, since we’re clean energy geeks and that’s what we focus on,” says Blake Jones, an engineer and board chair of the CECU.
Jones’s route to clean energy evangelist and funder started in an unexpected time and place, when he was working for oil giant Halliburton 15 years ago. After seeing the potential in alternative energy, Jones started a solar energy installation company 13 years ago. After years of expanding the company, he noticed that financing was a key concern and bottleneck to adding solar capacity. Traditional banks, which control slightly more than 90 percent of the consumer home loan market, weren’t as flexible as Jones felt they could be, due in part to a lack of knowledge and familiarity with the product. While there are a handful of other financiers and manufacturers offering loans and financial assistance Jones saw a gap in the marketplace.
A credit union, on the other hand, as a member-owned, nonprofit financial cooperative, could potentially offer better rates to members, since it didn’t need to make a profit for shareholders, and be better versed in specific investments. The CECU, according to Jones, will be more aggressive and provide better loan terms for those looking to make a green upgrade at home. In addition, as a “21st century financial institution,” while it based in Boulder, Colorado, the credit union will be strictly virtual, with no physical bank branches, meaning not only that anyone with a smartphone can apply for a loan, but that the money that would have gone into storefronts and salaries can be reinvested in solar panels.
In the post Great Recession era, when legislation such as the Dodd-Frank Act put more checks on the financial industry, starting a credit union is extremely difficult. Jones and other backers spent four years raising startup funds and meeting the requirements necessary for a federal charter, which they received in September.
“A newly chartered credit union is like a live panda birth,” says Jones. “It’s incredibly rare and something to be celebrated.”
The CECU will begin with $1.5 million in seed money to make loans, including investments from environmental nonprofits such as E4TheFuture (which gave $100,000), as well as $85,000 raised from a crowdfunding campaign. It will start by offering savings accounts, and by 2019, will also offer checking accounts. Jones expects much of the credit union’s capital will come from environmental groups trying to speed up carbon-free energy solutions.
When the group opens its (virtual) doors, it’ll have the capacity to make $15 million in loans, Jones says. While he’s put a lot of time and effort into making the CECU possible, Jones believes organizations like his won’t be alone—and maybe won’t even be needed in the same way—in the near future.
“The good news is most forms of clean energy won’t need subsidies in five years,” says Jones. “ It’s becoming bipartisan. The entire world is seeing the opportunity.”