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“It’s a house, it’s a car, it’s a … solar panel?” In the coming months, the Department of Energy Resources (DOER) is hoping a new residential solar loan program will spark that question and interest in renewable power at local lending institutions across the Commonwealth. In coordination with local banks and credit unions, the solar industry, and municipalities, DOER is developing the loan program to facilitate homeowners’ access to financing and encourage local financial institutions to serve the market.

solar loan process flowHomeowners will be able to get loans to install solar on their primary or secondary residences. Community shared solar participants with ownership positions, such as individual homes or small business, will be able to receive a loan for their portion of the array. As shown by the success of the recently launched Harvard, MA model, locally owned and financed community shared solar projects provide value and benefit the community as a whole.

DOER conducted a lender working group meeting in August to get feedback on an updated program design and is currently working diligently on a final design. DOER expects to finish the program design in October 2014 and to launch the loan program this winter. Continue to check our web page for details.

DOER’s initiative aims to attract and incorporate the lending industry into the solar market. Though solar lending is already common in the northeast, as demonstrated in New York and Connecticut, Massachusetts is taking a different approach to leveraging state resources. NYSERDA, the New York State Energy Research and Development Authority, and CEFIA, the Connecticut Clean Energy Finance and Investment Authority, have employed the Green Bank model by creating a state-sponsored investment fund dedicated to overcome current obstacles in clean energy financing markets. DOER plans instead to leverage designated ACP funds to provide lenders with an interest rate buydown and a loan loss reserve. These credit enhancement mechanisms will mitigate risk for lenders and encourage them to begin issuing solar loans.solar array

DOER hopes that the solar loan program’s incentives will spur banks and credit unions to continue issuing solar loans even after the program’s funding has run out. Additionally, DOER is structuring the program to encourage lending to solar customers with more moderate income levels, a market sector interested in pursuing solar, but less likely to have access to loan opportunities.

I am particularly excited to be working on this program because it demonstrates how the government and the private sector can work together in a sustainable fashion while also effectively serving the local economy. Though solar lending is becoming more common, small local lenders are less likely to participate in this market due to the perceived financial risk of solar energy. However, thanks to DOER’s ability to backstop loans through credit enhancement, these lenders now have the opportunity to begin participating in a growing market that will further develop their businesses and their communities’ economies. What’s more, by investing in solar energy, these lenders are making the sustainable choice to invest in the Commonwealth’s clean energy future and positively affect the community and the Commonwealth as a whole.

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Rooftop Solar Challenge Coordinator

Emma Krause is the Rooftop Solar Challenge (RSC) Coordinator at DOER in the Green Communities Division. RSC, a $12 million multi-state U.S. Department of Energy grant program, works to reduce soft costs around solar PV. Emma also works with the Renewables Division on the DOER solar financing program and community shared solar initiatives. She was valedictorian of her Emerson College class, where she earned her B.S. in Communications Studies, with minors in Literature and Political Science (a result of her penchant for ‘The West Wing’). Emma holds dual U.S.-Canadian citizenship and can be found on her bike or yoga mat when out-of-the-office.

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