Santa Barbara County Federal Credit Union had money burning a hole in its pocket, and it saw solar energy not only as a sound investment for itself, but also for its members.
Teri Zanini, Santa Barbara County FCU's CEO, credited board member Pat McPherson with spearheading efforts to get a solar electricity system (sometimes referred to as a photovoltaic system) installed in the CU's headquarters building.
The 38-kilowatt system will generate approximately 60% of the SBCFCU's electricity usage, reduce carbon dioxide emissions into the atmosphere by more than 77,000 pounds per year, and it will pay for itself in 10 to 15 years by saving money on electricity.
McPherson told The Credit Union Journal he had experience with solar energy when he was part of a citizens group in nearby Ojai.
"I saw how valuable it was. I thought installing a solar energy system would be good for the credit union in multiple ways: we would be a good citizen, it's good for the environment, it would save money and it is an opportunity to make loans."
"The biggest part is, we are responsible for our members' money," McPherson said, explaining the CU was flush with cash because so many members had refinanced their mortgage loans with other lenders and paid off their home equity loans with SBCFCU. "When we have excess funds, we can make loans or invest in CDs, or we can do something like this. With the low rates being paid on CDs, we felt it was a lot better for our members if we cut our power bill."
Installation of the system is expected to wrap up in December-"It should be producing power by Christmas," he said-and a ribbon-cutting ceremony is scheduled for Jan. 13, 2005.
Solar Loan Program
In conjunction with the installation of its solar electric system, the CU put together a loan program designed to encourage members to invest in systems of their own. McPherson said the "No-hassle solar power loan" is a home equity loan, but no appraisal is needed and there are no processing fees.
Members can choose a 15- or 30-year payback, and the interest rate is 4% to 6%, based on credit rating. While SBCFCU's solar installation is being done by a Los Osos, Calif.-based company called REC Solar (for Renewable Energy Concepts), members can use any licensed solar contractor.
"The loan program has been available since mid-November. We've had a few inquiries, but we haven't started extensive promotion," he explained. "The ribbon cutting will be the start of the campaign."
Because the loan requires a title search but no appraisal, McPherson said the credit union can get members the money in about a week.
The current base price for an average-size solar electric system is about $18,000 to $20,000 before rebates from the California Energy Commission-which pay for approximately 35% of the cost.
Accordingly, the current loan cap is $15,000, but he said that amount will increase in coming years as people install larger systems.
Multiple Benefits
To describe a solar electric system as paying for itself over time is "abstract thinking," but the many returns on such an investment are concrete McPherson said.
"You are going to pay for your power bill no matter what-ike taxes. If you get a loan and pay the same as you would pay to your power company, while producing less pollution and, in the long run, saving money, it just makes sense," he declared. "We will get a 7% return. It makes us wonder why we're the only credit union doing it." (WesCorp in San Dimas also uses solar for some of its power needs.)
In addition to the direct monetary return from the investment in the system, McPherson said the solar loan program serves as a way to bring members back to the CU after losing many loans to the refi boom the past three years.
"Our theory is, we want to start our relationship with our members sooner, rather than later. If we offer good money to people today, later, when they need to start using the equity in their homes again, they'll come to us. We think this is good for the community and the environment, so we want to share the idea with other credit unions."
