Wednesday, February 1, 2023

Inaction by US federal agency could hinder access to residential solar loans

The National Credit Union Administration may expand the exemption to allow federal credit unions to offer 25-year solar loans.

The Solar Energy Industries Association (SEIA) has warned that the expiration date of the COVID-19 exemption on solar loans that allows Federally Insured Credit Unions (FICUs) to participate in 25-year solar loans is approaching.

On December 31, 2022, FICUs will no longer be able to participate in 25-year solar loans if the National Credit Union Administration (NCUA) does not extend the waiver. Sean Gallagher, SEIA’s vice president of regulatory affairs, said the NCUA has the opportunity to extend the rule or make it permanent.

“If they don’t, it will shrink the funding pool available to homeowners who want to go solar at a time when the Biden administration is trying to rein in runaway inflation and enact the most impactful climate legislation in history.” Trying. Gallagher said.

Wood Mackenzie reports that the lending market in the US solar sector has grown 37% over the past year, with a record number of households going solar in the third quarter of 2022. SEIA said that every month more than 20,000 residential customers sign loan agreements. The organization said homeowners see the greatest monthly savings on a 25-year loan, which typically coincides with the installation’s warranty period.

The Inflation Reduction Act (IRA) is expected to boost an additional 222 GW of solar capacity, create 200,000 US jobs and generate $600 billion in investment in the US economy, but inaction by the NCUA could cut off a key source of funding for support Is. those features, SEIA said. By 2031, US solar installations could offset 492 million metric tons of carbon annually, representing 32% of US electricity sector emissions in 2021.

“NCUA’s inaction will harm the financial health of FICU, the banks that NCUA was created to protect. It will also deprive credit union members of the financial opportunities they have come to expect and their climate commitment to FICU.” An opportunity has been cut off to mitigate the financial risks,” Gallagher said.

Gallagher said FICU’s participation in solar loans is an important source of revenue that limits exposure to fossil fuels, a sector that carries the risk of stranded assets and is increasingly vulnerable to technological, political changes and economic downturns. is becoming less and less attractive. It is increasing investment in sustainability-based products and services as a growing number of financial institutions, including credit unions, seek to reduce the financial and social impacts of climate change.

“The NCUA has the power to allow FICUs to fully participate in the solar and storage market. Continued access to 25-year solar loan products will help ensure that while maximizing performance and providing credit unions and their members remain resilient while creating new jobs and economic opportunities for credit unions,” Gallagher said. “Inaction at this juncture would be contradictory and a grave mistake.”

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