Loan program to increase access to financing for residential solar ownership in Massachusetts
BOSTON – January 6, 2015 - The Patrick Administration today announced the final design of a $30 million residential solar loan program to complement the nation-leading solar market in Massachusetts. The Mass Solar Loan program, designed to make it easier for homeowners to finance solar electric projects on their homes, will work with banks and credit unions to expand borrowing options through lower interest rate loans and encourage loans for homeowners with lower income or lower credit scores.
“Solar installations provide important economic and environmental benefits to Massachusetts,” said Massachusetts Secretary of Energy and Environmental Affairs Maeve Bartlett. “The Mass Solar Loan will provide opportunities for homeowners to control and reduce their energy costs and for local banks and credit unions to offer a new business product”.
The Mass Solar Loan program, which has been in development since early 2014, follows a Department of Energy Resources (DOER) study that demonstrates lifetime net benefits to homeowners ten times greater for direct solar ownership relative to third-party ownership. Beginning in early 2015, local lenders will be able to sign up to participate in the program, which is scheduled to begin providing loans in the spring of 2015.
“Massachusetts has seen incredible growth in the solar market, with installations in 350 of the Commonwealth’s 351 cities and towns,” said DOER Commissioner Meg Lusardi. “The Mass Solar Loan program will ensure that this growth continues at the local level, increasing opportunities for homeowners to take their energy future into their own hands.”
The Solar Carve-Out Program administered by DOER has, in partnership with other programs, led to solar installations growing from just 3 MW to 715 MW during the Patrick Administration. There are nearly 20,000 systems installed in the Commonwealth, with the vast majority of these installed on homes. DOER anticipates Mass Solar Loan will support $135 million of loans to 6,000 homeowners and 30 MW of new capacity, and launch a loan product that lenders will continue to offer after the DOER credit enhancements expire.
Mass Solar Loan will be launched in partnership with the Massachusetts Clean Energy Center (MassCEC) which will serve as the program’s central administrator.
The launch of Mass Solar Loan coincides with the planned sunset of MassCEC’s successful Commonwealth Solar II rebate program, which has provided rebates for more than 10,500 small-scale solar electric projects at homes and businesses across Massachusetts since 2010.
“With the price of residential solar dropping steadily over the past few years, there has never been a better time to adopt solar energy,” said MassCEC CEO Alicia Barton. ”The launch of Mass Solar Loan will make it even easier for even more residents to tap into the economic and environmental benefits of solar electricity, while creating more local jobs.”
Mass Solar Loan will be available for solar installations on single family homes and on residential buildings up to three units, as well as for participants with an ownership stake in community shared solar projects. It will provide greater credit enhancement for moderate income customers and those with lower credit scores to encourage lenders to serve these customers.
"This program will help homeowners maximize the economic benefits of going solar. I am thrilled to see it move forward and look forward to it working in tandem with private programs to advance our shared goals," said State Senator Benjamin B. Downing.
“Consumer energy efficiency and renewable energy investments are an excellent choice for our members and their customers. The Massachusetts Bankers Association believes that the DOER residential solar loan program is a helpful support mechanism for these investments. We are happy to promote participation in solar lending to Massachusetts banks that have a lot to gain from this new program and its related business opportunities,” said David Floreen, Senior Vice President, Massachusetts Bankers Association.
“Credit Unions around Massachusetts are very excited about this program and the opportunity to work in their local communities to bring this exciting technology and loan product to their members,” said Paul Gentile, President of the Massachusetts Credit Union League. “We and our member credit unions have worked as stakeholders with DOER to establish an attractive program design. We look forward to working with our members to encourage participation.”
The funding committed to the program comes from Alternative Compliance Payments (ACP). ACP funds are paid by electric retail suppliers if they have insufficient Renewable or Alternative Energy Certificates to meet their compliance obligations under the Renewable and Alternative Portfolio Standard programs.