Financing offer is an alternative energy breakthrough



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Two New Hampshire business owners have come up with a seemingly small breakthrough in credit access that could have a big impact on small-scale alternative energy products in New Hampshire. Jack Bingham is president of SEA (Seacoast Energy Alternatives) Solar Store in Dover, and James Gamble runs GreenSource Energy Solutions in Concord. Their stores are part of a retail store chain (USA Solar) focused on the alternative energy market, and both have been seeking a way to make it easier for residential and smaller commercial customers to undertake alternative energy upgrades. Bingham and Gamble said they had an expanding product line and expertise for custom design and installation. They also have noticed that state and federal grant and tax credit incentives were starting to make a difference and helping to level the playing field. But they wanted to move the market beyond government incentives and needed lower-rate financing from the private sector to cover the up-front costs of installations that can cost from $10,000 for a new hot water system to as much as $40,000 for a full-scale solar electric system. Unfortunately, few such financing options existed, and there were no partnerships in the region involving alternative energy stores and banks. Bingham and Gamble believed this was dampening the breakout potential of alternative energy development. "It's critical to our business, and it was a real missing link in the bigger picture," said Gamble, who opened his store in July 2009. "What I was finding right out of the gate was that our ability to sell systems was limited to those folks with sufficient means ready available." So he approached five banks, both small and large, to pitch his idea - one no more radical than the concept of automobile financing. But he was surprised by the lack of interest. "They sort of looked at me like I was crazy," Bingham said. "I don't think they took the time out to research the alternative energy market or the products we sold. They offer financing for a $35,000 car that won't be worth anything in five years." Bingham found it hard to believe that banks couldn't see the economic opportunity in financing a project that would save a great deal of money for customers in the long run and would enhance the value of their homes at the same time, especially the solar electric customers who could eventually make money from the electricity they generate. "In the case of a solar power generation, what we're offering is an energy system that's going to last 25 years or more, cut down on operating expenses, and save lots of money," Bingham said. "It's a unique situation and it was hard trying to get them (banks) to see it from this perspective of an improved financial condition because of the loan." But he persisted and finally found one bank that did share his vision - Rochester-based Holy Rosary Credit Union. All USA Solar Stores throughout New Hampshire - including stores in Keene and Nashua, as well as in Groton, Vt. - are partnering with Holy Rosary to extend what Bingham calls "attractive financing options" for would-be customers. "We already offered home equity loans for certain efficiency measures, so it was really a natural fit," said Julie Coakley, director of lending at Holy Rosary. "When we saw their Web site and what they were doing, we were impressed and wanted to add this to our initiatives." Currently, the fixed and home equity lines of credit rates range from 3.99 percent for up to five years and as low as 6.49 percent for 11 to 15 years. Bingham said this could lead to a chain reaction in financing options that could be used in tandem with existing rebates and credits - and providing homeowners with even more of an incentive to invest in technologies with a proven track record of saving money down the road. Even in an uncertain economy and tight credit market, Coakley said the long-term potential of what the loans cover offer more rewards than risks. "When you look at it from a risk standpoint, yes we finance up to 100 percent, but we feel that what they're putting into their home is increasing the home's value, which is good for everyone," she said. "It sounds to me like a very positive development," said Jack Ruderman, director of sustainable energy for the New Hampshire Public Utilities Commission, of the financing option. "It's meeting a need that hasn't been addressed otherwise. I really see an upside and hope it will move more people to buying alternative energy systems." Ruderman said he's unsure about how large the impact of bank financing for alternative energy improvements might be, but he knows that rebates through the state's renewable energy fund - from which more than $1.5 million has been approved - are being released at a rapid rate that shows that consumers are interested. The renewable energy fund program, which was created by the state Legislature in 2008, covers solar hot water, small wind and solar electricity generation up to 5 kilowatts as well as central wood pellet heating systems."There has been much stronger demand than we estimated," Ruderman said. "It's been a very heartening trend. There are a lot more people who are committed to clean energy to combat climate change and reducing our reliance on fossil fuels." The affordable financing option has been in place for almost two months, and it's too early to get a gauge on how popular the program will turn out to be, but Bingham and Gamble say that initial interest is high, and Bingham will soon run radio commercials to spread the word. At Holy Rosary, Coakley said, "there is quite a buzz" about the program. She has already approved two loans and has received several application requests that are pending. "They've made it pretty simple, and you can get a decision within a few days," Bingham said of the credit union. "I think this was the piece that was missing. Solar electric costs have gone down 40 percent, and incentives have become more aggressive. Alternative energy has become more cost -effective and obvious."

 

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