Latest / Clean Power Hour / Making Clean Energy Accessible: Nonprofit Financing with Andy Posner | Ep 154

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Making Clean Energy Accessible: Nonprofit Financing with Andy Posner | Ep 154 · Clean Power Hour

• 0:50
  Andy Posner: I mean, I think right now we're offering 6%. On our debt, we actually just launched something called the Green New Deal fund. So people can invest in that they earn 6%.
• 0:59
  Andy Posner: And we use it to make solar loans to these families, which is not a it's a decent return.
• 1:02
  Andy Posner: It's not bad. You can make a little bit more if you went for market rate solar. So what's really appealing to them is the fact that we are enabling solar for families that otherwise are unlikely to be able to make the economics work.
• 1:16
  intro: Are you speeding the energy transition? Here at the Clean Power Hour, our hosts, Tim Montague and John Weaver bring you the best in solar batteries and clean technologies every week, want to go deeper into decarbonisation? We do too.
• 1:31
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• 1:37
  intro: Together, we can speed the energy transition.
• 1:44
  Tim Montague: Today on the Clean Power Hour, making the energy transition accessible to low and medium income individuals. My guest today is Andy Posner, he is the CEO and founder of the Capital Good Fund, hey, check out all of our content at cleanpowerhour.com. Give us a rating and review on Apple and Spotify so that others may find this content. And please tell a friend about the show. The Clean Power Hour has many listeners.
• 2:09
  Tim Montague: But we want more, so please share it with your friends and colleagues. Welcome to the Clean Power Hour, Andy Posner. Great to have you.
• 2:17
  Andy Posner: Thank you, it's such a pleasure to join you.
• 2:19
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• 2:38
  Tim Montague: The fourth generation Deno recently completed a technical review by DNV you can download the report, at denowatts.com, that's D E N O W A T T S.com.
• 2:50
  Tim Montague: Now back to the show.
• 2:52
  Tim Montague: I look forward to learning more about capital good fund and bringing your platform to my listeners. And, you know, it is, as I like to say, very heady days in the clean energy transition with the winds that are back now with the IRA legislation here in the United States and 2023. But there are many challenges for society. And one of those great challenges is making it work for everyone, not just the wealthy few who can afford solar on their roof or a Evie in their driveway. And, and we have a very large percentage of our population that falls in that category of not being able to afford the the good things that technology is providing us with regards to energy efficiency and clean energy. So tell us a little bit about yourself how you got interested in energy and financing for low and middle income groups.
• 3:56
  Andy Posner: Yeah, and it certainly is heady days. And I've been kind of waiting for this, as many of us have in the clean energy space for a long time. The story of capital good fund goes back to 2008 2009.
• 4:04
  Andy Posner: When I was doing a master's in environmental studies and looking at different financing mechanisms to unlock the potential of energy efficiency and renewables for underserved families. I was always interested interested in the intersection of the two. And of course, back then solar was a hell of a lot more expensive.
• 4:25
  Andy Posner: The policy landscape wasn't as attractive and heat pumps weren't even on my radar. Little you know, I don't think most people were talking about heat pumps, and probably the technology wasn't as good back then. So we started doing energy efficiency lending in 2011, for low to moderate income homeowners. But back then we were primarily funding, high efficiency, natural gas boilers.
• 4:47
  Andy Posner: That was sort of the ticket technology as you are. But even back then there was this focus on green collar jobs, and we saw the opportunity. And then when the inflation Reduction Act came out, it felt like the all of this work, and had come to fruition and planning and now we're at a point where we can finally carry forward our vision of getting clean energy into the homes of millions of low moderate income families. But to your point, there are a lot of challenges, even with the benefits of the IRA and other pieces of legislation, for example. Yes, the residential solar tax credit is now back to 30%. It had gone down to 26% and was due to expire and it was extended for 10 years. However, it is still a tax credit, meaning that if you are a family that has no tax liability, the tax credit doesn't do any good.
• 5:48
  Andy Posner: You don't have any way to benefit from it. You Uh, and that was not solved for in the inflation Reduction Act and a lot of the tax of a lot of the credits that are available for EVs or electrification, heat pumps, etc, are not refundable credit. So there's still a lot of work to be done to make sure that these benefits accrue to the families that really most needed because it's low income families that tend to have the most inefficient systems and pay the most of their income to their electricity bills.
• 6:18
  Tim Montague: Yes, and you make a great point that it is low and moderate income people that are most impacted when energy prices go up, which they're doing right now. They're going up significantly across the United States and across the globe. And I don't understand exactly why that is, I'm like, Why is 2023 so different than 2021? The world seems like pretty much the same place. Albeit were a little further along in supporting the clean energy transition. Okay, yeah, there's a war in Russia. I don't really, you know, here, the US were so rich and fossil fuels, and solar and wind resources. I don't, I don't understand that. But nonetheless, the market has decided that energy prices should go up. And so they are, and that really hurts for low and moderate income people. And, yeah, we have this wonderful legislation. But again, it doesn't really hurt help those who are most in need of the support. And that is really frustrating. So how do you crack that nut? And like, tell us a little bit about, you know, big picture. How do you see this problem? And how are you solving for that problem? I noticed on your website that you work in specific markets, I'll just list them off because it is an impressive list. But it is a finite list. Rhode Island, Florida, Massachusetts, Delaware, Illinois, Texas, Colorado, New Jersey, Connecticut, and Georgia. So big picture, how do you see this?
• 8:06
  Tim Montague: And and then, you know, rubber meets the road? What do you guys up to?
• 8:13
  Andy Posner: Yeah, so I mean, and it's, it's interesting, because like, with so much in the US, we have kind of a patchwork approach to policy.
• 8:18
  Andy Posner: You know, a lot of the clients that we work with outside of our green lending business, because we also do immigration loans and other types of personal loans.
• 8:28
  Andy Posner: They have to cobble together food stamps here and Medicaid there and temporary assistance for needy families there. And so similarly, when it comes to energy efficiency and clean energy, different states have different programmes that you can layer on to federal programmes, and it becomes very complicated very quickly. So for example, in Rhode Island, Massachusetts, there's a programme called the heat loan, where it's actually interest free to the homeowner that's funded through a surcharge and everyone's utility bill. And that can go towards things like heat pumps, and insulation, ductwork, and so on, and so forth. So we're the only non bank lender in that programme, we get paid the interest upfront by the utilities, which makes it viable for us. And obviously, an interest free loan really helps the economics of a heat pump.
• 9:18
  Andy Posner: Additionally, the state of Massachusetts increased the upfront rebate for the heat pump. So suddenly, we went from like 10% of the systems that we financed being heat pumps to almost 80%. And that has enabled us to reach low income families much more easily than we did previously. And the inflation Reduction Act really had nothing to do with that. That was all a state policy. So I think a lot of people focus on the Federal staff, and they don't realise the influence of local policy. I mean, another barrier is just, you were talking about costs, the lack of people to do the installation, the shortage of electricians is also bringing up the price of these installations. When it comes to solar, the cost of the panels is not nothing compared to the overall cost of the system. It's really the soft costs, the labour, the permitting and the lake that are preventing costs from falling as fast as they should be. We pay more for solar in us than Australians do and people in other countries. So anyway, so that's one thing to note is just that there's that patchwork approach, and depending on what state you live in, and your income level, if you are below I think 60% of area median income, you are eligible for the weatherization assistance programme through Department of Energy, in which case you can get free weatherization. And we don't so we don't provide loans in those cases. But another thing that we do is with respect to solar, we leverage the fact that we're nonprofit to bring down are financing costs. Solar is pretty unique because the economics and the math are pretty simple, right? You know exactly what you're paying now for utilities, you know what your new utility is going to be, you can estimate the average increase in total prices, and you can figure out what your overall savings is going to be. And it really just comes down to what is that interest rate? And what is that term. So the first thing is, you really have to offer a 25 year loan in order for the customer to be able to realise day one savings. And I think that's really key. Because if you're a low to moderate income homeowner, you really can't justify putting up a $50,000 solar system, that's going to increase your net monthly debt load by $50. or what have you, right. So that's the first thing, you got to make it a 25 year term. The other thing is that we need to bring down the interest rate as much as possible, which means in turn that we have to borrow at the lowest rate possible. And this is something that the inflation Reduction Act will be a game changer for the inflation Reduction Act includes $27 billion for something called the Greenhouse Gas Reduction Fund.
• 11:56
  Andy Posner: And that is money that is going to go to nonprofits like us that we can use for loan loss reserves, loan guarantees, and other things that have helped lower our borrowing cost.
• 12:06
  Andy Posner: Because the lower the rate at which we borrow, the lower the rate, we have to charge our customers, and the easier it's going to be to make it pencil day one. And again, this is really important, because if you are a middle income family, when you're thinking about the economics of solar, you don't care so much what your day one payment is because you're factoring in Alright, I'm going to get a 30% credit next year.
• 12:28
  Andy Posner: If you're not going to get that credit, it's a totally different calculation. And it's really regret. And it's the definition of a regressive tax policy, but it is what it is. So we're going to be leveraging the Greenhouse Gas Reduction Fund when that money starts to flow later this year. There's also the possibility in the future for us to go to the Department of Energy's loan programmes office with Judah Shah, who your listeners may be familiar with, they're doing a lot of really innovative things. But they have been given hundreds of billions of dollars in authority to make low interest loans and guarantees to projects like ours. And they are also doing a lot in hydrogen and battery manufacturing, and that sort of thing. So those are the kinds of things that will allow us to make the economics of solar were for low and moderate income families. And then the other, we're looking at other things as well. So for example, in Texas, we're talking to a utility called October's energy retail energy provider, as they call it there. And they're participating in virtual power plants now. So we're looking at the opportunity to help customers monetize the value of a battery system that will further improve the economics. There is something else though, that's in the inflation Reduction Act that will be completely transformational for us, which is that while it did not make the residential tax credit, refundable, it actually made the section 48 commercial tax credit refundable to nonprofits. So if you're familiar with if your listeners are familiar with, like Sunrun, the companies that do leases, what they're doing is they own the system. And then they have a whole complicated tax equity structure where those investors claim the credit, and they pass some of those savings on to the homeowner. For the first time. If a nonprofit owns a system, it can claim the credit directly from the IRS via what they call direct pay, right? So we are going to be launching a lease programme. And I think we'll be the first ever nonprofit lessor, where we'll own the system, we'll get the tax credit from the government, we'll pass most of the savings on to the client. And we'll keep some for ourselves. So in effect, we will be able to monetize that credit on behalf of the clients. And that is going to be a complete game changer when we roll it out in the next couple of months. And there are a lot of other nonprofits that are looking to do that. So there is a solution to this challenge it you know, ideally, the homeowner themselves would be able to claim it, because we're basically taking a cut of the credit in this case, but still, it's a game changer.
• 15:05
  Tim Montague: And so your business model is exactly what because you've you've talked about a lot of things, I get it that you can take incentives, and then pass along those savings in the form of a No Fee Loan. But where does the loan come from? Like who who creates those, those dollars that are then going to buy a solar system for a moderate income person?
• 15:35
  Andy Posner: Yeah, so I mean, we're nonprofit and meaning that we can leverage grants and donations, but we are trying to generate revenue so that we're not as dependent on grants and donations which can come and go.
• 15:44
  Andy Posner: Right now about 30% of our revenue does come from the interest that we are earn on our loan portfolio. And we're trying to get that to 100%. But all the money that we lend out, we borrow. So, you know, we're not a bank, we don't take deposits.
• 15:59
  Andy Posner: But similar concept when you, when you make a deposit in the bank, you're basically lending them the money, we just borrow directly, it's just not FDIC insured. And so that comes from other banks, it comes from family Foundation's high net worth individuals, faith based investors, other folks that want to invest in the clean energy transition. The challenge for us, though, is that, because we have to charge lower rates to our borrowers, we can't pay our investors or creditors, the same rates that they can get elsewhere. So that that, that below market rate return is out there. But it harder to raise it, it just takes a little bit longer, and particularly in this rising interest rate environment. And so that's why we actually had so much success doing solo loans that we had to pause the programme while we go to raise more capital. We lent out we've lent out $7 million in solo loans and last year to low and moderate income families.
• 16:56
  Andy Posner: And we're raising more, but but it's a challenge. I mean, it's a challenge for all lenders right now, but particularly for us.
• 17:04
  Tim Montague: And so are those financiers just mission driven on some level, and that's why they're willing to settle for a lower interest rate, or what is it that motivates them?
• 17:15
  Andy Posner: I mean, I think right now we're offering 6%, on our debt, we actually just launched something called the Green New Deal fund. So people can invest in that they earn 6%, and we use it to make solar loans to these families, which is not a it's a decent return.
• 17:27
  Andy Posner: It's not bad, you can make a little bit more if you went for market rate solar. So what's really appealing to them is the fact that we're enabling solar for families that otherwise are unlikely to be able to make the economics work. And I think, look, there's a environmental justice is is more than just a catchphrase. It's really meaningful for a lot of reasons that people are becoming aware of that. I mean, there are consequences of excluding the families we serve from the transition. For example, in Rhode Island, sorry, in California, where I live, they just implemented net metering 3.0, which has significantly reduced the economic benefit of solar. The reason that the utilities gave for doing this is that because so few systems are going on the roofs have low moderate income families, their argument was that effectively, they are shouldering the burden of maintaining the grid, because higher income families that have solar aren't paying into the system for maintenance of the wires, and all that. And there's some truth to that argument.
• 18:31
  Andy Posner: Right. And it carried the day with the Public Utilities Commission, unfortunately, what it means is that it's even harder to make it work for the rest of the families that we want to be serving. The other thing I really feel strongly about is that you can't expect families to support the policies that we're going to need to decarbonize if they don't see any direct benefit from it. So if you're low income, and you don't know anybody was solar on the roof, and you're asked to support a policy that's going to maybe add a surcharge to your bill, or increase taxes or what have you, for solar, you're gonna be sceptical that policy, even if you support mitigating climate change. Whereas every home that has solar on its roof, that's a family that's invested in clean energy and in the transition. And we're doing a really poor job not only reaching lower income families, but also families of colour, regardless of income. And a lot of that has to do with installers and the lack of diversity, their perceived bias where they're trying to sell solar, and also the design of the products. I mean, other lenders are not well suited to approving and effectively serving these communities. So these are all challenges, and we're trying to solve for that.
• 19:44
  Tim Montague: There are several directions we could take this conversation, but one of the one of the questions I have, I guess, is so if you're working directly with consumers, that's part of your model, right?
• 20:48
  Tim Montague: You're also working with other nonprofits, like churches, for example, it sounds like and helping them go green, whether that's energy efficiency with heat pumps, or putting solar on the roof or both, right.
• 21:07
  Andy Posner: Well, we right now we're focused on lending to individual homeowners. Our relationship with houses of worship is that we have some faith based and impact investors that actually lend us money. And certainly we have relationships with nonprofits through which we inform the community about the availability of our product.
• 21:29
  Tim Montague: Well, you mentioned the direct pay that's now available to nonprofits. How does that impact your your lending work?
• 21:36
  Andy Posner: Well, it doesn't impact the lending itself. What it does is allow us to create a leasing programme. So what we're going to be doing starting in August is we will own the system, we'll instal it on the roof of a homeowner, lease it to them, we'll get the tax credit, we'll use that to drive roughly 30% Day one savings on the utility bill. And so we're basically just finding a different way to monetize that.
• 22:05
  Andy Posner: Now, in a second phase, that's our phase one. In the next phase, we will be doing the same for other nonprofits, or for affordable housing complexes, like one of the things that's nice about this direct pay is that if you're a church and you put solar on your roof, you will be able to get the credit yourself. You don't need to lease it. Let's say you buy it with cash, or you finance it with a loan. Any nonprofit, and also rural electric cooperatives, municipalities and others will be able to get the credit via direct pay.
• 22:37
  Tim Montague: Yeah, yeah, that's a big deal in the solar industry, for sure. And then, how do how do people find out about your organisation? In general? What are the what are the other organisations that you're working with to funnel customers to you?
• 22:57
  Andy Posner: Yeah, I think this is another challenge that the industry is going to have to solve for. Because let's talk solar specifically. I've spoken to many of our clients when I mentioned solar, they say, Oh, you mean those people that go knock on your door and tell you're gonna get free solar?
• 23:18
  Andy Posner: There's a lot of scepticism rightly so. Because there's a lot of people going door to door and making claims and promises about solar that are not accurate. You know, what they mean, is you're going to save money day one, not that it's free, right. So there's a lot of scepticism and also people, confusing, it's a big purchase.
• 23:37
  Andy Posner: It's a long complicated process to go solar. So a lot of what we try to do is demystify that. And we do that through presentations in the community, we table at events, we reach out to our we've we've done loans for 11,000 families for again, you know, maybe you need to fix your boiler or apply for citizenship or what have you. So we send them communications about the availability of our products. We also go to installers and say, Hey, you probably have a list of people that were denied financing, if you want, you could send them over to us and we can try to rerun them and get them approved. Because we don't underwrite based on someone's credit, or we have a much different tailored approach to underwriting. So that's certainly helps. But I think even if you have a family that's interested in solar, there's another challenge, which is just the time it takes, we have to figure out a way to make permitting more streamlined. I mean, for example, cabel good fun, we have a we put a solar array on our roof, it took us a year, from the time that we started looking for an installer to the time that we got permission to operate. And I mean, some of it had to do with permitting, some have to do with permission operate from the utility. But that's another barrier is you're asking families that don't have a lot of time to take a lot of time to do this. We also partner with installers to do joint outreach, and in fact, we're getting ready to do a statewide solarized campaign in Georgia, the goal of which is to raise awareness and also to bring down the costs by telling an installer, okay, we're gonna guarantee you a certain number of volume in exchange for you lowering your average cost per watt. That's key, particularly in a market like Georgia, where power is pretty cheap. And so the margins for solar are even tighter to make it work for families.
• 25:34
  Tim Montague: Yeah. And since you're not using a FICO score, to qualify customers, what is that application process? Like?
• 25:44
  Andy Posner: Yeah, so it's still an online application. And it's fully bilingual, because we have a very strong focus on the Latino and Latina community, rather than underwriting based on your credit, we look at your banking history and your utility payment history. So we're want to see how do you manage money in your bank account? Do you have a lot of overdrafts? Do you have other recurring transactions? And then we look at okay, over the last 12 months, have you been paying utility bills on time? Since solar is a direct replacement of a utility expense, if you tend to pay that on time, you're very likely to pay your solar on time. So a loan on time, it's a little bit harder when you're looking at something like a heat pump loan because you're not necessarily realising day one savings. Typically, your boiler broke, you need you need heat or cooling so you're going to replace it. But still, utility payments and how you manage money in your bank account are really good proxies. And I should note that we have done about 17 mil million dollars of clean energy loans between our renewable and our efficiency with a 99.6% cumulative repayment rate. So we know it works. Yeah, there is no doubt that these loans get paid back.
• 26:55
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• 27:32
  Tim Montague: So I'm a lower middle income consumer, I file an application to let's say, put solar on my roof. And you come back and say, hey, we'll we'll lease you a solar array at X dollars, you'll save y dollars, in general, in the states you're working in? Do you have a value proposition that's compelling to consumers?
• 28:00
  Andy Posner: We do. You know, in Texas, the value proposition isn't as good because Texas does not have net metering. And it's a deregulated market. So each state's buyback rate that basically the what they pay you for excess power fit onto the grid varies. So sometimes you're incentivized to undersized your system so that you're not feeding power back to the grid or putting in a battery. But you know, batteries are can be expensive. And so the economics don't always work there. But still, we can make it work because we're charging lower enough rates. And that's again enabled because we're borrowing at a low enough rates. Now in Rhode Island in Massachusetts, where power is expensive, and you have net metering, and in some cases, you also get renewable energy credits. And then there's also some state tax benefits. You can almost always make solar work, which is funny because there's less sunlight than in Texas. But you know, Texas is a real leader in commercial and utility scale solar, I think the residential side is strong, but lagging particularly in low to moderate income adoption. When you
• 29:09
  Tim Montague: say there's no net metering in Texas, you mean there's no full retail net metering? There's wholesale net metering only? Yeah, that's correct. That does. Yeah.
• 29:18
  Andy Posner: I mean, because it's deregulated each each provider can choose its own buyback rate, you know, what, how they compensate you for the excess power. But another thing that an installer was telling me was that it's difficult for them to promise savings to the customer. Because if you switch from one provider to another, if the new provider doesn't offer you a good buyback rate, or has some weird pricing paradigm, it can really kill the economics of your solar plan. And so they're saying they're really struggling with the complexity of explaining that to homeowners.
• 29:52
  Tim Montague: Yeah, it is complex. And it's it's really disappointing that there's so much misinformation floating around. That makes consumers cautious. Let's talk more about the big picture and you know, energy efficiency. We like to call that the low hanging fruit.
• 30:08
  Tim Montague: Is that true in terms of savings to the consumer are our energy efficiency projects, the first step that you coach customers to take?
• 30:21
  Andy Posner: Absolutely, but I think it's in practice it gets complicated quickly. Because at least with solar and batteries, it's pretty standardised. You have a cost per watt and it's it is what it is you have a roof you have a breaker box, you might need to do a tree trimmer or a roof repair. When it comes to things like heat pumps, you know each home is different different in terms of the ducting and the attic size and all of that and so it can be difficult to standardise it. And we see wild variations in the price quotes for systems. And it can be hard to tell if it's an installer trying to take advantage of somebody or are trying to oversize the system or undersized the system. But in turn that can make it very difficult to estimate the actual savings that somebody is going to realise and it also can be hard to measure those. The other challenge though, I think on the efficiency side is that it's hard to get people to do it proactively. In fact, I literally right now I have people blowing insulation in my attic. I'm doing it practically because I'm I obsessively monitor my power consumption.
• 31:27
  Andy Posner: Most people are not looking at a heat pump or installation until something breaks. That's the real opportunity. And the thing that we need to solve for is that when the company comes out to fix your AC unit, your water heater or what have you, that they default to selling you the heat pump. installers are still not doing that, unless you have a market that strongly incentivizes it. So like I mentioned, Massachusetts just said, we're going to make it so ridiculously attractive to do a heat pump. I think they have up to a $10,000 rebate, that the installer is just not going to try to sell you something else.
• 32:07
  Andy Posner: And that again, that has nothing to do with inflation Reduction Act. That's all state policy.
• 32:13
  Andy Posner: Absent something like that.
• 32:13
  Andy Posner: We're still in a paradigm we're where people are defaulting to the much quicker and easier thing. And it's not just easier because it's cheaper to instal.
• 32:23
  Andy Posner: But it's also faster to instal and less complicated. So, you know, I know groups like rewiring America are focusing on this and doing contractor outreach and education and customer outreach and education.
• 32:35
  Andy Posner: But we have a ways to go to get there.
• 32:40
  Tim Montague: And are your staff actually running these solar proposals or heat pump proposals? Or is it in tandem with some third party installer that you're putting these deals together?
• 32:56
  Andy Posner: Yeah, it's in tandem with the installer.
• 32:58
  Andy Posner: Ultimately, the installer is the one that has to sell and explain the system. I mean, we we try doing that a little bit. But that just gets even more complicated. So it's really important that installers know how to explain the benefits of these systems, our job is to do the credit risk side, and to get people approved, and get them approved at the lowest rate. And to get them comfortable with that. And also to do the kind of customer interest piece. But ultimately, we want to send somebody like if you're a community member, and you hear about us, we're going to send you to one of our installer partners to have them give you an estimate and explain how the system works, and do the installation. There's really no way around that piece of it. I mean, we've even thought about at some point starting our own subsidiary installation company, so we can be vertically integrated like a Sunrun is, or there's a company called posit Jen that does leasings focus on low and moderate income families. And they do that so that they can control kind of end to end the messaging and the customer relation piece. Because our staff does come from the communities we serve, understands them speaks the language. And that can be a barrier when we pass them off to an installer that may not look like them or, or come from those communities or speak those languages. There's a huge opportunity to do a better job of connecting people coming out of job training programmes or apprenticeship programmes, to installers that are hiring to meet demand.
• 34:34
  Tim Montague: So what is it that keeps you up at night? Andy?
• 34:36
  Tim Montague: Yeah, I mean, this is a feel good story. I love what you're up to. I love what you're all about. You mentioned having to pause just, you know, one of your programmes because it was too popular in terms of volume and scale. How many customers are you helping on a regular basis? And what are the bottlenecks? And what is it that you're? You know, like I said, losing sleep over?
• 35:04
  Andy Posner: Yeah, I mean, last month, we lent out $2 million to about 200 family and also different product lines. But most of that was in our solar and energy efficiency lending programme. But to your like, like you noted, yes, our solar lending programme is on pause, because we just it was too popular, and interest rates kept going up. So the thing that's keeping me up at night right now is, you know, what our interest rates going to look like? And are they going to stabilise or keep going up, I am worried about the banking sector, if we enter a recession, or if the financial system becomes really shaky, people are going to be less likely to invest in programmes like ours. I also worry about things like transmission, and permitting and supply chains. Because you know, the underlying technologies we're talking about are proven.
• 35:57
  Andy Posner: And they work. And our portfolio performance is there. We know how to do all of that. But if we can't get the capital to deploy it, and we can't get the systems, the price of the systems low enough. And that's gonna be a huge bottleneck. And the other thing is that there's now a movement in a number of states to make residential solar less attractive. So we talked about California's net metering change. North Carolina just changed their net metering rules. So we'll see where that all shakes out. But I guess the other countervailing force that is that as energy prices rise, it makes the economics of heat pumps and solar better. So you know that that is sort of a boon for making the sales and And we've seen an increase in families that want to do these things now, because they're looking at the energy bill is going Oh, my God, I, you know, this is top of mind suddenly.
• 36:49
  Andy Posner: But yeah, it's an interesting time because there's all this opportunity. But there are some headwinds.
• 36:58
  Tim Montague: And and when you say we had to put solar on pause, is that nationally or only in certain markets? Or what? What's the status of your solar programme?
• 37:08
  Andy Posner: Yeah, I mean, as we're recording this now, in early April, we are not taking applications for new solar loans, while I go and raise that raise more capital. So it was a we just application volume in the first quarter this year was crazy. I mean, we lent out more in solar loans in the first quarter of this year than we did in the previous year and a half of the programme, which is great in many ways. And it was due to rising energy prices, rising awareness of the need, and the benefits of technology. So in the meantime, we are still doing an energy efficiency loans, they're they're much smaller, so they don't require as much loan capital to fund. I think the other trend was that a lot of the other lenders in this space, have been raising their rates, in frankly, stunning ways, which may be a topic for a different show, but dealer fees and Scylla lending, but they have really jacked up the rates and made it hard for even middle income families to make solar work on the financing side. The reason they're doing that is because the rates at which for profit lenders are borrowing have skyrocketed even faster than our rates have.
• 38:21
  Tim Montague: And so if you're a financier, though, or a family office, or wealthy individual, and you're interested in supporting this cause, so to speak, what is what does it take? What is the minimum buy in so to speak? What kind of capital are you looking for?
• 38:37
  Andy Posner: Yeah, I mean, we were trying to raise $3 million right now. But the truth of the matter is that our ability to deploy is quite unlimited. It's it's safe for the constraint of capital. So what we're doing now is we're borrowing at 6%. From impact investors. The minimum investment is just $5,000. It's a seven year term on the investment. It's available in all 50 states in the only constraint in our case is that the investor has to be accredited, which is an SEC definition, basically, a person of means that there's a specific definition to it. Great,
• 39:14
  Tim Montague: well, it is democratising the energy transition in many ways. So I love that. What else should our listeners know? And, you know, how can they help you other than by investing in your loan programme? Yeah, what else should we know?
• 39:31
  Andy Posner: Well, I think that folks that are that have expertise in the sector, could lend it to groups like us. And there are a lot of other nonprofits operating in this space that there's another lender called solar and energy Loan Fund. In Florida, for example, that's actually a Green Bank in Florida. We're not a Green Bank. But we are looking for people that work for us join our boards provide assistance.
• 39:57
  Andy Posner: For example, as we work to set up a leasing programme. We're trying to find a law firm that will do if not pro bono, low bono work. We also are raising grant dollars to help subsidise some of the costs of expanding these programmes, community outreach events, improving our technology, infrastructure, that sort of thing. So there's a number of ways to get plugged in, again, not only to us, but other groups in the space. And there were a lot of great organisations, advancing this clean energy transition, rewiring America, Climate Justice Alliance and so on and so forth. I think, yeah, the pledge Reduction Act does really set the groundwork for this because there is money flowing through different pots to support environmental justice efforts, not just the greenhouse gas reduction fund that I mentioned. But that money only has impact if people take the dollars and deploy them, right.
• 40:55
  Andy Posner: And so it's really a question of rolling up our sleeves and getting to work either investing our money donating money, investing our time working in the sector, there's a lot happening. It's a very exciting time, as you know, in the sector.
• 41:09
  Tim Montague: I'm going to read the list of states again, that you're working in. And then I have a question about why not?
• 41:14
  Tim Montague: Why California, New York are missing from this list. But the list is Rhode Island, Florida, Massachusetts, Delaware, Illinois, Texas, Colorado, New Jersey, Connecticut, and Georgia. It's an amazing list.
• 41:27
  Tim Montague: And so kudos to you and your team for growing that list. It's it's truly very impressive. But of course, California and New York are too big Kahunas in the energy efficiency in just the sheer volume of projects and population and incentives in those states. So why are they off the list for now?
• 41:53
  Andy Posner: The only reason they're not on the list yet is that has we're not a bank or credit union. We are regulated state by state, we don't have a federal charter. And so the lending laws, getting a consumer lending licence in those states is somewhat onerous. Although Believe it or not, Texas was the hardest state of all to get a lending licence, which you wouldn't expect. But we just haven't had the bandwidth yet to go for the lending licence. And we will definitely add those markets sooner rather than later. But it's just a matter of have limited resources. I mean, I think, you know, the heart, one of the reasons that people tend not to serve the populations we serve is that they're not as profitable to serve. And so a for profit has less incentive to do it at a nonprofit can do it. But we have limited means with which to scale. So it's as simple as that. The Clean
• 42:45
  Tim Montague: Power Hour is brought to you by Denowatts. If you're a solar PV asset manager or performance engineer, you need better data and better business intelligence. With Denowatts digital twin benchmarking technology, you get more accurate, efficient, and faster performance measurement results. The fourth generation Deno recently completed a technical review by DNV, you can download the report at Denowatts.com. That's D E N O W A T T S s.com. Now back to the show.
• 43:18
  Tim Montague: Well, thank you very much, Andy, I really appreciate it. Check out all of our content at cleanpowerhour.com Give us a rating and a review on Apple and Spotify. That is the best thing you can do to help us have more people find the podcast and then please tell a friend or two about the show. We're doing a one on one interview like this every Tuesday these are published. And then we do a news roundup, and sometimes interviews with my my co host, John Weaver, journalist for PV magazine. And we do those on Thursdays at noon, Eastern 11, Central 10 Mountain and nine, Pacific. I want to thank Andy Posner of the capital good fund for coming on the show today.
• 44:01
  Tim Montague: Thank you so much, Andy, how can our listeners find you,
• 44:05
  Andy Posner: they can email me at andy@capitalgoodfund.org. Or they can go run on a website.
• 44:08
  Andy Posner: Just reach out to me to that or learn more about our work.
• 44:14
  Tim Montague: And you're easy to find on LinkedIn as well. So reach out to Andy if you have ideas about how to raise more money for solar finance. Or if you're a consumer interested in financing your energy efficiency project in any of those states where they're working. With that I'll say, let's grow solar and storage. I'm Tim Montague, take care.
• 44:32
  Tim Montague: Hey, listeners. This is Tim, I want to give a shout out to all of you. I do this for you twice a week. Thank you for being here. Thank you for giving us your time. I really appreciate you and what you're all about.
• 44:46
  Tim Montague: You are part and parcel of the energy transition, whether you're an energy professional today, or an aspiring energy professional. So thank you, I want to let you know that the Clean Power Hour has launched a listener survey. And it would mean so much to me. If you would go to cleanpowerhour.com. Click on the About Us link right there on the main navigation that takes you to the about page and you'll see a big graphic listener survey, just click on that graphic and it takes just a couple of minutes. If you fill out the survey, I will send you a lovely baseball cap with our logo on it. The other thing I want our listeners to know is that this podcast is made possible by corporate sponsors.
• 45:44
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