Credit unions, like many other businesses and financial institutions, are seeking to enact environmentally friendly policies that can cut costs and benefit the planet. In some cases, credit unions have adopted various in-house practices to reduce their carbon footprint, while others offer products to members that encourage them to also abide by similar "green" measures. (Some credit unions do both).
At Vermont State Employees Credit Union (VSECU), a $741 million-asset institution based in Montpelier, Vt., a program is in place to transition the credit union from electrical power to solar energy.
Laurie Fielder, VSECU's VGreen program director, told Credit Union Journal that the impetus for the green initiatives began several years ago when the board of directors adopted an environmental mission statement that challenged the credit union to promote environmentally sound choices through its operations and business products.
"This solar project, which powers all of our buildings with clean, renewable energy, is one more positive step in lowering our carbon footprint and lessening our environmental impact," she stated.
VSECU currently has nine branches located across Vermont, Fielder noted, and the solar project will generate enough renewable energy to offset the electricity consumption of all branches and operations.
Fielder explained how the solar array will reduce the credit union's power costs: "The [solar] array [which is now fully operational] will produce enough energy to completely offset our electricity consumption, and we actually anticipate production may exceed our own energy consumption," she said. "The solar net metering credits will be applied to our electricity bill, [eventually] bringing it to zero, resulting in a positive return for the credit union over the life of the project."
Green Financing
In order to fund this investment in a financially sustainable way, VSECU partnered with Soveren Solar, a local solar-installation and development firm. Under the solar power arrangement, the credit union will benefit from a federal tax credit for renewable energy investments — something not usually available to non-profits and not-for-profits.
Fielder explained that for-profit companies have been incentivized to invest in renewable energy, thanks to a 30% federal tax credit. "Non-profits, however, have been less likely to make that investment because they do not benefit from such a credit," she said. "As a member-owned cooperative credit union, we felt it was important to ensure we could maximize the financial benefit to our organization — a goal most credit unions and non-profits share."
While the environmental benefits are clear, VSECU also wanted to identify an approach that maximized the investment potential and resulted in operational cost savings over time. That's where for-profit Soveren Solar comes in.
"This approach will give us a positive return on the investment over the life of the project," Fielder said.
Under terms of this partnership, Soveren owns the initial project and claims the investment tax credit.
"After the tax depreciation period is over, in year six, we then have the option to purchase the array from Soveren at fair market value," Fielder explained. "We believe this provides a model for other non-profits to benefit from the federal tax credit. As we've seen with our own residential solar-financing program, incentives and discounted rates are critical factors in the economics of a renewable investment."
Indeed, economic viability impacts the adoption of renewable energy projects, so Fielder added that she hopes this approach is something that helps incentivize similar investments among non-profits and credit unions.
Green Loan Products
Along with going green at certain branches — including a Gold-LEED-certified branch in Rutland — VSECU offers members the chance to participate in energy efficiency and renewable energy initatives at discounted rates through its "VGreen" loan program. VGreen offers "affordable financing options" that allow members to make their own investments in renewable energy, efficient heating systems, heat pumps, green vehicles and home weatherization upgrades.
VGreen has been one of VSECU's most successful loan programs in recent years, Fielder pointed out, with more than 1,800 loans originated totaling more than $30 million. The program offers rates that are generally five percentage points lower than a standard personal loan, incentivizing investment and allowing Vermonters to make energy efficiency improvements.
"Additionally, we've been awarded with multiple grants from the state of Vermont that offer our members even greater savings," she said. "Through these state-funded grants, VSECU has helped members save more than $400,000 in interest."
Fielder said she hopes that more credit unions across the country to follow their example.
"We think credit unions are in a unique position to really drive a mission-driven movement in the financial sector, and fostering environmental prosperity is part of that movement," she offered. "With a similar approach, we believe more credit unions, cooperatives and non-profits could make an investment in renewable energy that also maximizes the financial benefit for the organization."
'Our Organizational Responsibility'
Credit Union of Colorado (CUCO), a $1.36 billion institution based in Denver, is leading the way in practicing clean energy and hoping to serve as an example for other institutions in the Centennial State.
Doug Schneider, VP of marketing at CUCO, said the credit union began its focus on going green in 2010.
"The credit union felt this was a commitment to the communities we serve as well as our organizational responsibility," he said. "All of our branches have a recycling program; we offer shredding/recycling services to all of our members; we [also] have bins located in each of our branches."
In addition, most of CUCO's branches have updated their HVAC equipment to be more energy-efficient, which has resulted in saving on energy bills. "We have updated a few of our branches with LED lighting for both interior and exterior lighting," Schneider added. "Our intent is to eventually upgrade all of our branches."
Echoing other credit unions, Schneider noted that the largest obstacle to going green — depending on the project — can be the cost. "We are implementing the program when we have a brand new location built or as remodels are scheduled to mitigate expenses," he added. When CUCO is designing new branches or remodeling existing facilities, it works with contractors and vendors to look for opportunities to increase energy efficiency.
CUCO has undertaken many other measures to help protect the environment, including the annual recycling of more than 83,000 pounds of paper; the installation of carpeting made from recyclable fiber mesh; the use of Low Volatile Organic Compound (VOC) paint; and applying automatic temperature controls in branches to adjust heating and cooling, thereby saving more than $13,000 a year.
'Good Stewards of the Environment'
As First Capital FCU shows, going green isn't just for large-asset credit unions.
According to Tara Houser, VP of marketing at First Capital, the $179 million-asset credit union started construction on its green branch in South York in 2008, but the planning process began years before that. The inspiration for this initiative came from the former CEO, who installed a geothermal system in his house and wanted the credit union to bring that same technology into the new building.
"This was just one more way for us to live the credit union philosophy of people helping people [and] help to preserve our environment for generations to come," Houser said.
Among other measures, First Capital FCU installed a geothermal heating/cooling system, white roof, rainwater capture system and an "ultra-efficient" lighting system.
First Capital FCU did not convert any existing branches to into becoming green. Rather it built one new branch from the ground up. "The process of building [a green branch] was a longer process than the average build due to [having to meet] all of the requirements for LEED certification," explained Houser.
In order to implement, maintain and monitor the green program, First Capital hired architects and builders who had to design and construct the building to meet the items on the LEED certification list.
"Our architects and construction crew met with us regularly to go over each step of the process," she said. "We also consulted with the LEED team to make sure we were continuing to meet the criteria needed for the certification process."
The green branch came at a price tag roughly 15% higher than that of a conventional branch, Houser said, but the site is projected to save 22% in energy costs over the life of the building.
"Our membership was very supportive," she added. "They liked the fact that we were being good stewards of the environment."
Houser opined that more credit unions are probably not enacting similar clean energy programs because it's an expensive process up-front. "The savings you receive won't be felt until years down the road," she said.
First Capital also offers a "Green Loan" with a 15% discount for members who buy a hybrid vehicle or one that exceeds 32 highway miles per gallon.
The credit union also undertakes simpler methods to help the environment.
"We [also] provide bike racks at the green branch which encourages members and staff to bike to work," said Houser. "We have preferred parking for those who drive fuel-efficient vehicles. In the way of staff, we encourage staff to bike to work. We encourage them to print only what they need and recycle everything they can. Our members are very supportive of our green initiatives."
GreenUp
In the Pacific Northwest, Puget Sound Cooperative CU is widely known for its socially responsible banking, specifically around its Solar and Energy-Smart Loans, said Amy Herbig, CEO of The BA Group, which handles marketing for PSCCU
Among other products, the $112 million-asset PSCCU offers "GreenUp Loans" to help members purchase bicycles and even kayaks (with rates as low as 5.99% APR for up to $7,500 with 24-month term); as well as auto loans for hybrid, electric or new clean diesel vehicles (featuring a 0.25% rate discount).
"The majority of our members belong because of our shared care and concern for the Earth," Herbig said. "And we connect with our members and communities we serve in a variety of socially conscious ways, such as sponsoring various green programs and initiatives, encouraging our members via social media conversations and contests, and all the ways they can 'bank greener' by eliminating paper and how their deposits help us fund our socially responsible loan programs."
