Tech CU sees bright future in solar lending
By Michael Bartlett
Posted on November 27, 2017 on Credit Union Journal
With its residential
solar loans program going strong, $2.4 billion Technology Credit Union, San
Jose, Calif., is branching out with a solar financing program for its
commercial, non-profit and government members.
According to Joe
Anzalone, Tech CU's chief commercial banking officer, the program will allow
members to finance solar systems ranging in price from $100,000 to $2 million
with no money down. All financing will be structured so that the savings from
using solar energy – in lieu of drawing from the grid – will cover the cost of
the financing over time.
The credit union is
drawing on its own experience on the latter point – it installed solar grids in
the parking lot of its headquarters building in 2016. The solar electricity
used in its office has allowed it to shrink its non-renewable energy
consumption by nearly 30 percent.
For the new commercial
solar financing program, Tech CU is working in conjunction with Belvedere Solar
Finance. Anzalone said Belvedere has been in equipment leasing and finance for
“There is an
opportunity for small- and medium-sized businesses that have a demand for
solar,” Anzalone said, adding through the use of federal grants and cost
avoidance, businesses have the same advantages as consumers using solar. “I was
able to work with Belvedere when I was at a previous financial institution
seven or eight years ago. I wanted to do a version of the same program at Tech
CU, so I put together a commercial solar program.”
There are several
similarities in financing residential solar and financing commercial solar,
Anzalone explained. He said target clients include small manufacturing firms,
grocery stores, gas stations and certain non-profit organizations.
“All of these companies
see rising utility costs and the benefits of using solar versus paying their
utility company,” he said. “We structure five- to 10-year financing so the cost
is less than their utility bill. There is a lot of demand for this based on
that economic rationale. Loan sizes typically range from $200,000 to $2
Different sort of risk
As for risk involved with residential versus commercial, Anzalone acknowledged
there “definitely” is a difference.
“The underwriting is
different. We have to price per the risk profile, the ability to repay by the
borrower and we price accordingly once we evaluate their creditworthiness. We
try to make an attractive equipment loan for them.”
The good news: Tech CU
believes there is a “growing pipeline” for commercial solar lending. Anzalone
said Belvedere will identify prospects and do the underwriting at the front
end, including the documentation of the borrower, allowing the credit union to
serve as the financing arm.
“They know how to
underwrite these loans, and will bring a complete package to us for approval,”
he said of Belvedere.
“This is a great
program for us. It allows us to really scale,” Anzalone continued. “This is a
program that should do $5 million to $10 million per year. That is our rough
estimate right now.”
Anzalone said as far as
he knows, he has not heard of any other credit unions doing commercial solar
a number of CUs across the country have started solar lending programs for
members or established solar energy programs for their
facilities[cujournal.com]. “Belvedere says we are the first credit union
they have worked with. They do work with some commercial and community banks.
We are very excited about this. It is a real differentiator for us.”
In May of this year,
Tech CU committed more than $500 million to residential solar loans.