43. CALIFORNIA COMMUNITY BANKS AND SUNWEALTH ARE A MATCH
Our ground mount solar project at JSerra Catholic High School in San Luis Capistrano, California. The project is one of three in the 1.8 MW solar portfolio developed for the school in partnership with California-based developer and installer, Renewable Energy Partners.
This is the first installment of Sunwealth’s Banking on Solar series for California Community Banks, a series of articles in which we describe the opportunity for community banks to invest in solar tax equity and partner with Sunwealth to impact the communities we serve.
It is a simple truth that community banking is the “backbone” of prosperous and equitable communities. As a paperboy, it was my community bank that held my weekly deposits – mostly loose change – and empowered my parents to fulfill the dream of homeownership for our family of six. I have three brothers, and our community bank was there to provide us with an emergency loan when our septic system failed in dramatic fashion a few years later.
During the Great Recession, as head of the Commonwealth’s Solar program, I was proud to partner with the community bank that launched the first ever homeowner solar lending program in Massachusetts. They saw an opportunity that was profitable and impactful: customers would save more money on their electric bills than they would pay on the solar loan; and they’d do it with clean energy. At a very early stage, this community bank saw the transformative potential of the solar industry in Massachusetts, which was about $10 million per year at that time, and saw the clean energy jobs that their loans would create during those tough financial times.
Since then, many local community banks have followed their lead and offered solar loans as the industry continues to grow rapidly across the nation. I’m a committed customer: I know that my family’s savings are in good hands with our community bank and that it prudently reinvests these funds into our local economy and is providing support during challenging times.
Community Banks as Leaders and Anchors, Especially in Extraordinary Times
Sunwealth invests for a better energy future by financing and managing solar projects that benefit diverse communities through clean power, carbon reduction, cost savings and job creation. We partner with skilled local solar installers, community organizations, local businesses and investors to change who benefits from renewable energy by changing the way we invest in it.
Our work provides us with the opportunity to partner with an extraordinary community of committed local small businesses and organizations, many of which are community bank customers. Our partners include the dozens of quality small solar businesses that develop, build, and maintain our solar projects and the hundreds of businesses, organizations, houses of worship, and homeowners that host and benefit from our solar projects. Among these diverse partners, there is a common sentiment:
Access to banking and capital is extremely important, as we’ve seen during the peak of the pandemic
Community banks outperformed when it came to customer service, empathy, and timely financial solutions
This sentiment was confirmed by the national PPP Loan results during 2020 and 2021, where almost half of PPP borrowers relied on community banks for what was likely a combination of better service, access, and technology. Community banks emerged as the touchstone banking partners for our communities during a period of hardship and uncertainty.
Sunwealth Embraces Community Bank Values
Community banks are good role models. Like community banks, Sunwealth focuses on better access, service, agility, and technology to foster relationships with our partners and provide them with measurable benefits. We have learned from community bankers about the importance of building and retaining a great team that is passionate about our mission. We also embrace the diligence, love, and elbow grease that goes into knowing our diverse communities and the need for continually building our expertise around underwriting, policy, technology, and deal structuring. Like Sunwealth, community banks need to focus on new opportunities that make financial sense, are consistent with core capabilities and are scalable. Solar tax equity investing with Sunwealth is deeply aligned with community bank values and financial interests.
As the impacts of climate change intensify, community banks have an opportunity to lead on impactful solutions that combat both climate change and inequality. In California, where climate impacts are already driving economic damages into the billions, investing in community-based solar helps mitigate climate risk, support communities' environmental and economic well-being, and satisfy institutional sustainability goals without compromising financial returns.
Want to learn more about the projects we’re developing in CA?
Be on the lookout for our next blog in this series: Tax Equity is Good for CA Community Banks
Want to learn more about Sunwealth’s impact?
Jon Abe is Chief Executive Officer at Sunwealth. He has over 20 years of experience developing, building and managing solar and distributed energy resources and working with community banks to finance the growing solar economy.