As the Sunshine State, Florida is well positioned to leverage the potential of renewable energy, especially solar. However, that abundance of sunshine and summer heat can also mean greater energy consumption, especially in the midst of the COVID-19 crisis when residents are spending more time at home. In Central Florida, one organization, Solar and Energy Loan Fund (SELF), is making an impact by helping traditionally underserved communities combat climate change.
SELF is a nonprofit, certified Community Development Financial Institution (CDFI) with a focus on empowering low- to moderate-income homeowners and communities. CDFIs are required to allocate at least 60 percent of their financing activities to be directed to low-and moderate-income populations. SELF has gone even further—dedicating more than 70 percent to this under-banked sector. While it offers an array of residential and commercial loans, SELF has seen its greatest success in offering microloans to homeowners for home improvements.
The cornerstone of these loans is energy efficiency and renewable energy—upgrades to high-efficiency air conditioners and solar panels, for example—but they can also include low-cost financing for projects that improve a home’s climate resilience, such as new roofs or weatherization of doors and windows. Residents who invest in storm resilience can see annual savings of up to $1,000 in home insurance premiums on top of an average of 25 percent savings in heating and cooling costs.
"We want to see these technologies deployed to the people who need them the most, but are least able to afford them," says Ann Vanek-Dasovich, SELF’s Gulf Coast regional manager.
The organization puts financial inclusion at the center of its mission. “SELF’s inclusive lending standards are less stringent than traditional financing,” says founder Doug Coward. “We build our loans around the applicant’s ability to pay, rather than credit scores or equity.” The wrap-around services include coaching homeowners on financial services and rebates, helping them improve their credit scores, and guiding them on hiring contractors.
SELF designs programs specifically for veterans, senior citizens, women, and disabled homeowners. For example, it has partnered with Kiva, a crowdfunded platform of more than 1.3 million individual investors worldwide, which fundraises for women who wouldn’t traditionally qualify for financing. The organization also sees itself as an implementation tool for local governments to achieve a range of community benefits, from revitalizing older neighborhoods and building storm resilience to advancing energy efficiency and stimulating economic development.
Leveraging the relationships fostered through the Bloomberg Philanthropies American Cities Climate Challenge has been key, as Coward notes. The reason he’s enjoyed working with the cities of St. Petersburg and Orlando is because of “their unique partnerships with the ACCC. This doesn’t exist anywhere else. It’s a great combination of city and county working together.”
Residents of St. Petersburg have definitely felt the impact. “Our goal is to run on 100 percent clean, renewable energy, and this is an important step,” says Sharon Wright, the city’s sustainability manager. “It helps working-class families participate in and benefit from the city’s initiatives, contributing to our overall resiliency efforts.”
During its first year, SELF offered $400,000 in loans; this year, it surpassed $2 million. In 2019 alone, SELF financed 95 projects out of a goal of 100, with the average loan at around $8,500. It also increased its network of vetted contractors to 149, thereby promoting local green jobs.
Orlando’s satellite office opened in May 2020 and is on its way to delivering just as deep of an impact. Thanks to support from the city of Orlando, the Orange County Board of County Commissioners has approved a $50,000 grant to complement SELF’s $50,000 grant from the Climate Challenge. “We’re excited to help working-class homeowners access affordable financing for crucial home repairs,” says Orlando Mayor Buddy Dyer. “And enabling SELF financing is another strategy to help reboot our local economy and expand green jobs in Orlando.”
SELF has been essential in helping businesses and vulnerable communities weather the ongoing pandemic. About 3 percent of its clients were affected, and the organization immediately granted relief through a 90-day grace period. “All but one person has been able to catch up,” says Coward, and there are no issues with the existing portfolio, which has a default rate of less than 1.5 percent. Moreover, despite the pandemic, the organization was able to increase its lending to $750,000 as of July 2020, which is triple what it was in 2019. “Our programs are more in demand than ever,” Coward says.
SELF’s commitment to equitable inclusion undoubtedly factors into that increased demand. From its clients to its contractors, equity is an integral part of the selection process. All of the organization’s materials are available in Spanish and in other languages common to its communities, and SELF’s own diverse staff is a reflection of that commitment, including the recent hire of a staff member who speaks four languages.
SELF’s equity-driven inclusion has been a productive strategy: Overall, it has leveraged $7.2 million of loan capital into $11 million in loans; generated 30,000 job hours for local businesses; helped 4,000 clients; and reduced CO2 emissions by 1,100 metric tons. SELF is a shining example of how investing in underserved communities can not only be a successful business model but an effective way to combat climate change.