In the hot Florida climate, poor insulation or inefficient equipment can have a large impact on homeowners’ energy use. Because the state has some of the highest energy consumption per capita and fairly high electricity rates, summer heat waves can send Floridians’ utility bills soaring. St. Lucie County in the heart of Florida’s Treasure Coast committed to helping homeowners reduce their rising utility costs by creating the nonprofit Solar and Energy Loan Fund (SELF), a certified community development financial institution (CFDI), using $2.9 million in seed funding from the U.S. Department of Energy's Better Buildings Neighborhood Program.
Since its creation in 2010, SELF has raised community awareness of the importance of energy efficiency and enabled hundreds of St. Lucie County residents to affordably upgrade their homes and lower their energy costs.
In order to give low- to moderate-income county residents an affordable way to achieve energy and finanical savings, SELF created the Clean Energy Loan Program to provide assistance throughout all steps of the home energy upgrade process. SELF’s energy experts provided step-by-step guidance to help homeowners identify potential upgrades and the best options for achieving energy efficiency, and SELF’s Clean Energy Loan Program made comprehensive home energy improvements possible for all customers by partnering with local governments and utilities to offer free home energy assessments and by providing loans at below-market interest rates.
Through its combined social and financial mission, SELF was able to help underserved populations improve their quality of life, stimulate local employment, create economic development opportunities, and raise energy efficiency awareness in the community. Read more in the St. Lucie final report.
SELF helped homeowners invest in much-needed energy upgrades through consumer outreach, advice from energy experts, financing, and incentives.
- Residential Program Design: Each SELF project began with a energy assessment completed by a state-certified energy rater. SELF energy experts reviewed the results of the assessment with homeowners to explain potential improvements. Customers were then offered consultations and credit counseling to help qualify them for low-interest loans. They could also choose a contractor from three or more quotes from SELF’s list of qualified contractors.
- Marketing and Outreach: SELF employed a full-time marketing professional to establish a media and community presence for the program through local radio and television shows, social media, webcasts, press releases, quarterly newsletters, and community outreach events.
- Financing: SELF offered low-interest loans with flexible approval terms through the Clean Energy Loan Program, mainly for low- and moderate-income and minority populations. Clients with credit scores as low as 500 could qualify for a loan, and loan amounts ranged from $1,000 to $50,000 with interest rates as low as 6%. SELF also offered military discounts of 50% off closing cost fees.
- Workforce Development: SELF approved more than 38 contractors to provide program services, which stimulated Florida’s hard-hit construction industry by creating quality jobs. SELF also provided training workshops for contractors on green technologies, energy efficiency awareness, and business management.
SELF’s close connection with the St. Lucie County community allowed the program to be responsive to its customers’ needs. Other lessons learned include:
- Foster local partners. SELF partnered with local governments and utilities to offer free or reduced-cost home energy assessments. Partnerships with the Treasure Coast Regional Planning Commission and the Space Coast Energy Consortium allowed the program to expand into neighboring counties and gain access to new funding sources. Faith-based organizations sharing SELF’s mission to support the underserved also donated more than $585,000 to the program.
- Keep capital costs for financing low. SELF had to find a balance between keeping interest rates low enough to make loans affordable for customers but high enough to generate revenue to meet loan expenses and provide operating funds. SELF worked with experienced local nonprofits to identify strategies for keeping capital costs low in order to pass on those savings to customers.
- Be flexible. SELF initially planned to use Property-Assessed Clean Energy (PACE) financing for its residential loan structure but had to find a new model after the Federal Housing Finance Agency stopped supporting PACE programs in 2010. SELF instead became certified as a CDFI focused on residential energy efficiency and renewable energy upgrades.
- Connect often with customers. SELF communicated frequently and clearly with clients throughout the upgrade process. The program also conducted all of its own underwriting and client contact directly, which gave SELF a deep knowledge of its products and clients and generated positive feedback and trust from customers.
SELF aims to expand throughout southern Florida and to leverage support from the community and local organizations to continue making energy efficiency upgrades affordable for all of the region’s residents.
- SELF is continuing its expansion efforts into new markets, including Orlando, West Palm Beach, and the Tampa Bay Area. A key component to achieving this growth will be continuing to pursue strategic partnerships that can help fund part of the expansion and operating costs in new geographic areas.
- SELF plans to focus on deploying three- to five-year term loans to provide the necessary rate of revolving capital to meet its loan obligations and continue to access medium term debt, which has been most available to the program in its short time of operation.
- As SELF continues to grow, it plans to expand into the commercial market to serve small businesses, which will help scale the program and increase returns with shorter terms loans. SELF is exploring how to generate upfront fees through administration of a commercial PACE program in St. Lucie County. As loan payments would be collected by the county’s tax collection office, SELF could earn sustainable funds while avoiding portfolio risk and extending energy-saving benefits to business owners.
- To oversee and support expansion efforts, SELF plans to create regional advisory boards made up of professional volunteers who meet regularly to advise and support regional expansion and new branches; raise funds; serve as public advocates for the organization; and improve relationships with other organizations.