Green Giants – Episode 92

Wes Ashworth (02:44)

I love that story. I love when people really do see a problem. You obviously you’ve got that passion already, but then taking those next steps and really focusing on the solutions and what you can do about it. I love that. I love that journey. As you said too, Florida is the sunshine state. To help paint that picture spends tens of billions every year importing fossil fuels. When did you begin to see a different path forward for the state and really kind of shaping what you’re doing now?

Doug Coward (03:11)

Well, it’s been a long road because we have more recently seen some progress. The coal plant project that I referenced was almost 20 years ago. I served on the county commissioner from 1998 to 2010. I think it was around 2006 or so when the coal plant was proposed.

I really think the motivating factor for me and how it relates to the Solar Energy Loan Fund was my decision to contact the president of Florida Power and Light, set up a one-on-one meeting, and really try and have a heart-to-heart conversation with him about this whole plant and trying to see if there were opportunities for us to work together on a demonstration project. It was in the course of that conversation where the president of FPL looked down his nose at me and he said, “Commissioner, you give me my project and I’ll think about helping you.”

Now, I don’t know how you’d react to that, but as a county commissioner representing about 300,000 people, I left with steam coming out of my ears. I’ve got to get permission from an energy monopoly and a key party governor to do what’s right for my community. They think the best solution is to be bringing in train loads of coal and burning that and dumping those pollutants all over our community.

It just didn’t sit well with me and it really motivated me. That was really the turning point for me because I realized that I couldn’t work within the system that was in place, that we didn’t have control over our own destiny. That in order for us to be able to promote clean energy in the Sunshine State, we’re going to have to find a path around bad government.

Wes Ashworth (05:04)

Absolutely. I can definitely understand. I think I’d feel the same way in terms of steam coming out of the ears when you leave. But again, to further reiterate on that of just seeing the problem, experiencing and feeling that, and then taking the steps to do something about it, which I think not a lot of people do in the grand scheme of things. But what was maybe that moment thereafter where you decided to really step out and you needed to kind of build something entirely outside of that system and what led you to obviously found SELF and all the work that you’ve done there?

Doug Coward (05:35)

The first thing I did when I left that meeting was to kind of reflect on where I was at and what I could do. The first thing I wanted to do was educate myself. I’m thinking to myself, what can I, as an elected official, local elected official, do to try and promote clean energy in my community, that doesn’t require me to go to an energy monopoly and a state government that doesn’t support clean energy to get their permission?

I started to look around the country at what other local governments were doing. I think, Boulder, Colorado was one of the first local governments in the country to create a green financing program. I’m not supportive, particularly of the choice that they made, but the broader idea of a local government taking this matter in their own hands and then developing solutions for their community to be able to participate and benefit from these technologies.

It was really through that process where I started to think, well, maybe St. Lucie County could set up their own green financing program. Our mindset was that financing could be the key to unlocking the clean energy economy, as opposed to trying to addressing it through a policy issue or through state government and all that. If we set up a non-profit lending institution, gave people access to low cost financing, they’d be able to overcome the high upfront cost of those investments. They would therefore be much more likely to be able to take advantage of technologies.

Right about this time, you had the second Bush recession that then transitioned into President Obama coming into office and passing the American Recovery Act, the stimulus program. As a part of the stimulus program, the ARA program, the Department of Energy had a highly competitive national grant that was set up for the creation of innovative local clean energy financing programs.

A friend of mine who I was kind of brainstorming about this idea, really sharp guy, Lawrence Davenport, brought me a copy of this grant opportunity. I think that was where the light bulb just started going off in my mind. I’m like, this is it. I’ve got an idea, but this is a mechanism actually get it done. It was a really, I guess, a learning process would be the way I would describe it.

My first reaction as a county commissioner was to sit down with the top staff in the county and really just use them as a sounding board and present this idea and see what their thoughts were. You know, am I crazy? Or, you know, tell me. So I did, I arranged a meeting with the county administrator and probably about a half a dozen or so top staff. I present this idea that, I’d like to create this local nonprofit green bank here in St. Lucie County and help people get access to financing and fix up their home. Long pause. Nobody had any initial thoughts.

Finally, after a couple of minutes, somebody was brave enough to speak up and they said, “Commissioner, can we speak the truth to you?” and I said, “yeah, absolutely. Be candid, please” And they said, “we think it would be a waste of time” was their quote. I’m like, what? Waste of time? OK.  I pulled the county administrator over to the side after the meeting and I thanked her for putting the meeting together. I said, “appreciate your thoughts. Just do me one favor. Just stay out of my way.” Right. Just let me at least try. If I fail, that’s on me.

But don’t create additional roadblocks. This is tough enough already to stay out of my way. I then went to the County Commission, presented the idea to them and they thought it was a great idea. It was unanimously supported. All five commissioners supported. I mean, what’s it going to hurt? We were going to go after a grant and try and create this entity. If we fail, we move on to the next issue.

But anyway, we ended up putting together a really robust application, one that I’m super proud of. We had support from Republicans, independents, Democrats, environmentalists, labor unions, business interest, and we packaged this together and submitted the proposal and we’re extremely fortunate to have been selected as one of 20 local governments in the country to actually receive a seed grant through the R.F. program.

We were the smallest in the country. We got this guy of three million dollars and the idea was to pilot the program in St. Lucie, have it become certified as a community development financial institution through U.S. Treasury, and then ultimately try and scale the program and be able to sustain it. It was initially the idea was that we created, the county actually created the Solar and Energy Loan Fund and then funded off as an independent 501C3 organization that would initially administer the three-year grant but then was basically on their own to be able to figure out how do you survive afterwards.

The time frame I’m talking about was about 16 years ago. It was in 2009 that we applied for the grant and received confirmation that we had received the grant. Then we immediately put together the initial meeting of kind of the key stakeholders in late 2009 and then by early 2010 we had established the organization, gotten our 501c3 status and basically focused the next three years on trying to develop this brand new non-profit lending institution.

It was successful but it was challenging because we hadn’t grown the program yet. We didn’t have a large region or state to work in. We had one medium sized county. It was really hard to launch and scale that program successfully. In year two of the three year grant, we actually went back to DOE and said, “we’re ready to expand. We know that we need to expand or we’re not going to have the scale to be able to survive.” It took a lot of negotiation. We also had to get support from the county of St. Lucie to allow us to do this.

But ultimately, we made that initial step to grow into the Treasure Coast region, which is the area around St. Lucie. That was basically probably the hardest time for the organization because we’re once we’ve weaned ourselves off that grant, we’ve got to survive. Right. We’ve got to be able to pay the bills and you’ve got to generate sufficient earned revenue from the lending activity in order. to be able to survive, or you’re going to need to have grant support from foundations and others.

At that point, we were so small, we were like a little boutique operation, everybody’s patting us on the back, you know, do a good job, but we weren’t really getting a lot of support. We didn’t have any support from the state, no support from the utility. We had no venture capitalists supporting us. We had no major foundations. How do you grow that program without resources?

It was really my background in working for local government, both as a staff person and as a county commissioner, where I envisioned the opportunity for us to work with local governments all over the state. While the state of Florida itself was not supportive of clean energy, there were lots of local communities within the state that were. One of the important things we did early, is actually work with local government partners.

Most notably the city of Orlando, the city of St. Petersburg, Hillsborough County, which is where Tampa’s at. We were able to get basically seed grants from these organizations to help us expand into their region. Then it allowed us to build our capacity so that we could hire additional staff. Then we basically set up these public-private partnerships whereby SELF brought it’s programming, its expertise, its resources. We did all the work essentially for them and we took all the risk.

 t was a really compelling sell for local governments around the state who wanted to advance clean energy, but again, did not have those real world tools or solutions in hand. That’s really what I like to think of SELF as an implementation tool for local governments for helping retrofit existing affordable housing, advancing energy efficiency, solar, storm resilience, creating jobs, there’s health benefits, there’s so many things that we do that overlap with the mission of the local government.

We were able to raise over $2 million in small capacity building seed grants from more than a dozen local governments around the state, which gave us critical resources to grow but also helped us in establishing ourselves in new areas, creating new loan volume, and allowing us to begin to scale the program so that we could begin to generate sufficient revenues to be able to sustain the organization.

Wes Ashworth (14:10)

Incredible journey. As you’re walking through that and just the early stages of a lack of support, really from your inner circle, people that you trust and they’re kind of going, hey, it’s a waste of time. But having that belief to continue going, obviously consult others as well too, and get it off the ground. Then that’s just step one. You’ve got a hundred more steps beyond that to really create this thing and get it to where it is today. Absolutely remarkable journey.

Now that we kind of framed up sort of the origin, how that all came to be, I want to talk a little bit about just the problem that you’re solving and get into that a little bit. You’ve often pointed out that roughly half of Americans were denied a loan last year. When you really like internalize that statistic, how did it change your view of who the clean energy transition was actually built for and then just what you could do about it?

Doug Coward (14:56)

It reminds me of the first time I ever sat down with somebody who was working for a community development financial institution and the national CDFI program was set up in 1994 to actually help bring low cost capital into underserved communities. But I have to confess that I was pretty naive and ignorant to the fact I sat with this person and they talked about the need for CDFI. I’m thinking, I can go to a bank and get a loan. Why do we need this, right?

I didn’t have any concept of how big this problem really was. That was a very eye opening discussion that is only been reinforced over the last 15 years that we’ve been doing this. I hear so many people in the environmental space or in the clean energy space really focusing on the volume of activity that’s going on. It has been highly successful.

But if you start to dig below the top layer and look a little bit more at where those projects are happening and who’s benefiting, you see clear differences, right? Most clean energy projects are happening in wealthier communities, people with higher credit scores. It’s really the low and moderate income people who are most affected by climate change. They’re also the ones who are least likely to participate and benefits from the clean energy economy. We’re kind of tackling all of that through our nonprofit lending institution because our mission is to really help rebuild underserved communities by helping people get access to low cost financing so that they can then take advantage of all these proven technologies and benefits therein. It’s been enlightening.

I just didn’t realize how many people in America fit into this category of not being able to access financing. I mean, I think I might’ve thought it was 15 or 20%, but the fact that nearly half of Americans cannot access money, it’s not only important in the environmental and renewable energy sector, it’s in life in general.

Like how do these areas recover from storms? How do they rebuild from poverty? Like how do they get out of this? They have to have access to capital. I think we really struck a chord and are providing a solution to an incredibly significant national issue. I am a little frustrated. I heard a presentation from my governor the other day who, I’m a big capitalist, but at the same time, there are limitations on what capitalism can solve. The mindset that I was hearing from him was that everything is fine. The capitalism is taking care of this. I’m thinking, well, wait a second, half of Americans can’t even get access to money. We can’t exactly consider that a success story.

As the professionals are trying to promote solar for all and clean energy for all and so forth, how do you do that when half of Americans can’t get money? Right? It is an absolutely critical piece of this puzzle. It’s also helped advance SELF on the national stage, because honestly, when we created SELF as a local program, we didn’t have ambitions to become a national model. We really were trying to solve a local issue, but it just so happened to be that that local issue resonated and was needed across the country.

But most green financing groups have done a fabulous job, but have not really been as successful in the LMI market. Those have been the most challenging, right? By default, really, SELF was elevated to a national level because we were one of the few green banks in the country that were really hyper-focused on this issue.

If I can brag just for a second, when Congress was debating the creation of the Greenhouse Gas Reduction Fund, they brought one Green Bank in to showcase. That was the Solar Energy Loan Fund. Our CEO, Duanne Andrade, who’s been really the load star of our organization, was testifying before the US Senate, talking to them about how our Green CDFI model works and specifically benefiting low and moderate income people.

I think I spoke with the head of a group called the Coalition for Green Capital, name is Eli Hobson. I asked him, we were on a trip to Puerto Rico on solar projects, I asked him, what is the average LMI penetration rate for green banks in America? He said that he wasn’t sure of the exact number, but he thought it was around 20%. Meaning that one out of every five projects that was being financed was for low- and moderate-income people. SELF over our 15 years has been at 70%.

We’re one of the national leaders in what I would describe as like energy equity, where we’re really not just promoting clean energy, but trying to help the middle America, the folks that haven’t traditionally had access to these technologies and the benefits therein.

Wes Ashworth (19:56)

Just incredible, what you you’ve been able to achieve with your team. Obviously, I think that we really start to paint the picture of the problem that most people I would say aren’t aware of. I didn’t know that statistic and was surprised when you shared it with me as well, too. But then you really start to see the impact of what you’re doing and the value behind this existing and this taking off continue to spread across the nation.

You know, I think once you really understand the financing gap, the conversation stops being abstract it becomes very personal, behind every loan denial is a real household dealing with real consequences and that’s how we have to think about it and frame it up. But you also share with me too, SELF doesn’t underwrite based on credit scores, but on ability to pay. I love this whole model and how it all starts to come into play. But can you walk us through what that looks like, kind of using a real customer story?

Doug Coward (20:42)

Sure. Again, I have to give credit to Duanne Andrade, our CEO. She was formerly the CFO and she was the one who was directly responsible for developing our underwriting methodology. She is from Bolivia, had worked throughout Mexico. She had been exposed to some international microlending concepts and methodologies. She came back to Florida. We were fortunate enough to connect with her and bring her on as a consultant.

She was the one who developed our underwriting methodology, which is essentially, as you said, focusing on the applicant’s ability to pay, not their credit score. When an applicant comes in, we’re looking at what is the revenue that individual has, whether through a job or retirement or other, what are their monthly expenses and then what amount of disposable income, if any, do they have for us to build a loan around?

Part of the reason why we have low default rates is that we’re a nonprofit and we’re trying to help people. We’re not pushing loans on people. We’re trying to help them. But another learning process for me, I think when you think about somebody with low credit, your initial instinct is, oh my gosh, they must have defaulted on every loan in their life. They’ve earned this. Right? But I think the figure I read recently is that 22 % of Americans don’t even have a credit score. They’ve never even taken out credit.

To your question about an example, one that really jumps out at me is after Hurricane Irma hit Florida, it did quite a bit of damage, as you can imagine, to people’s homes. We had an elderly person, he was around 70, and his very elderly mother or father, I don’t remember which one, was living with him. His house was so severely damaged that FEMA ended up putting him in a hotel. I believe he was in that hotel roughly for a year because FEMA had given him a check for, I think these numbers may not be exact, but it’s been a good time since this exact project, but FEMA gave him like $7,000 or $8,000.

Well, the improvements that he needed on his roof and his home were around $15,000. It turned out he was one of those 22 % of Americans who didn’t have a credit score. His contractor couldn’t secure traditional financing.

He couldn’t get a loan from a bank. He’s in limbo and he’s having to live in a hotel and he’s staying on the government dime and nobody had a solution. Finally, he meets a contractor who’s in our network and the guy said to him, have you ever heard of SELF? He said, no, I haven’t. He applied for a loan from us. With zero credit score, I mean, no credit score whatsoever. We looked at his financials and we realized…Okay, wait a second. This guy worked all his life. He’s retired. He has retirement income. He owns the house outright. He has the ability to pay. We approved him for, I think it was somewhere around $8,000 or $10,000, which he matched with the FEMA grant, was able to hire the local contractor, get his home fixed, get out of the hotel, off the government dime, and back to a normal life.

But that, and to my knowledge, he’s never missed a loan payment with us. So part of what we’re doing is filling the credit worthiness of underserved communities and people with no or low credit scores, you know, 98 % repayment rate. I do hope that there’s more opportunity for us to work with some of these state and federal agencies that are like the one example I just gave where FEMA doesn’t have a solution. Well, there are other CDFIs, other green banks all over the country that could be stepping in and augmenting those government resources, right, and provide real world solutions. That’s one example of a story where his credit score or lack thereof did not tell his story at all.

One last piece on that is that we also report our loans to the credit bureau. As he’s paying this loan off over, I can’t remember what the term of his loan, was probably five or seven years, he’s actually improving his credit score as he pays off the loan so that when he’s done, he not only has a safer home and more comfortable, probably more efficient and lower his operating costs, but he’s also increased—he’s established his credit store and now has the ability to secure lower cost financing in the future as needed.

Wes Ashworth (25:03)

A powerful story and I think just how your solution really fits in to where normally this gentleman, there is no solution and what’s he left to do? You know, live in the hotel or come up with other means and really kind of negatively drastically impact his quality of life. But just a simple thing of just doing things that make sense. As you said, the default rate less than two percent. I mean, this obviously works, it’s been proven time and time again. You shared another example with me too, of an elderly woman whose roof was failing before hurricane season and loan got funded through Kiva in just hours. Tell us a bit about that. What did that moment reveal to you about just trust?

Doug Coward (25:35)

One of the biggest strengths of the non-profit Solar Energy Loan Fund is the fact that we have the ability to raise low-cost capital from a variety of sources, whether those are faith-based organizations, impact investors, banks, CRA investments, foundations, do what are called CRIs, program-related investments. One of our sources of low-cost capital is Kiva.

Kiva.org is an international crowdfunding juggernaut. They have raised over a billion dollars. They started out as second and third world nations and they’re using a really interesting model as kind of similar to a GoFundMe site where everybody puts up $25 and then you gift it to somebody, right?

In the case of Kiva, you’re putting up that $25, but as opposed to gifting it, what you actually do is lend your money at 0% interest. It’s an opportunity for people to use their money to create impact. With that background, go to the story that you referenced where we had an elderly woman in Polk County, which is central Florida, and she was in desperate need of roof repairs. As you know, there was coming up on hurricane season. Unfortunately, her husband had passed recently.

Because of the millions of dollars in medical bills, she had to declare bankruptcy. Naturally what happened is her credit score, I think it was in the low 500, and her roof contractor could not get her approved for a loan with their financing or a local bank. Again, they contacted us in desperation and said, is there anything that you all could possibly do? I think her name was Verda. We said, we’ll try. We had just been approved as a field partner with Kiva, which meant that we were allowed to take our clients, post it to this international site, which has 1.2 million individual investors and we have 30 days to raise the money for the project on this platform.

We sent the information to Kiva, I think they’re headquartered out of San Francisco on like Friday. We came in on Monday to see if the project was posted because we were really excited about this first project, right?

We came in, we pulled it up, and we’re all like, “What? What?” It was fully funded in six and a half hours! I dug deeper because I was so amazed with this. I was able to calculate how many people contributed. It was three hundred and thirty one people, I believe, from three different continents, all putting up twenty-five dollars. We then pooled that money from the globe, pulled it back into Florida and are able to offer Virta with a 523 credit score, our lowest interest rate loan of 5 % fixed.

This is not a secured loan attached to the house. This is an unsecured personal loan for somebody with bad credit who would normally probably couldn’t get it at all, or if they did, they’d be using the credit card at 30%. We’re able to get it to her at five. The end of that story was as we’re closing the loan, her daughter calls me from California and wants to talk to the executive director. I gladly take the call. The essence of it was, is this a scam? Are you trying to scam my mother? Right? I chuckled and I said, “no, ma’am, we’re a 501C3 And this is what we do.” She’s like this sounds too good to be true.

But it’s really harnessing the power of the trillion-dollar global impact investment world. There are so many people that are putting their money out there, not just to focus on creating yield, but to create impact. That’s where us as a non-profit lender are able to tap into those sources of capital at really low cost so that we can re-lend that money at well below market rate.

We didn’t just give Verda a loan and help her address her pressing issue with her roof falling in right before hurricane season. We’ve probably saved her 25 % on her interest rate that she would have probably otherwise had to use a credit card of 30 % if that option was even there.

Wes Ashworth (29:37)

Just another absolutely incredible story, it really does paint the picture of the work you’re doing and how you’re really impacting lives.

Doug Coward (29:45)

I just want to pitch out there, if any of your listening audience are like, a lot of people are like, what can I do? You know, this is like the climate change and these bigger, they’re outside of my purview. I don’t know how I can affect them. Go on Kiva and become a Kiva investor. I did this about, I think it was 2014 when I joined, maybe a little bit after that. I put up like $400 or $500.

Over the next 10 years, the repayment rate on Kiva is like 98 % also. I’ve had one out of like 50 loans go bad, so I lost a little bit. But the bottom line is that same, I think I put up $400, but that same $400, I would put it out in a loan, I’d get repaid, and then I would lend it again. So that same $400 that I put up, I’ve now done $1,500 worth of projects.

The power of having many people do this is really impactful. I would encourage individuals, companies. I mean, even like know like Hewlett Packard has been big in this space and they instead of giving employees a Christmas bonus, or maybe they did that too, they gave everybody like a couple hundred dollars of Kiva credit so that they could then establish their own presence on Kiva and begin to lend on that program.

A lot of groups want to give money and if you give a grant, it gets used up, it’s burned, goes away. In this case, it’s like your own little mini revolving loan fund where you can continue to create impact over and over and over. You might not think that you can create a lot of impact with small loans, but I can tell you after 15 years of working in this space, our average loan size is around $12,000. The transformative nature of that money is difficult to even describe because it’s different in different cases.

But what is more important than a roof over somebody’s head or a safe home for you to be able to live in, to be able to afford the energy bills and the insurance bills, to be able to create wealth and equity and generational wealth? Health, comfort. One of the things that in my mind is like the heat that’s been hitting the country over the last couple of years. We’ve been having record breaking heat. Imagine an elderly person living in a home in South Florida and the AC doesn’t work. Right? That’s not even an energy issue anymore. Now we’re talking about health and safety.

These are just really important issues that we I don’t in the same vein that I didn’t realize so many people were unable to access capital. I also think I fully realized how many people were really struggling in this country just to make ends meet. Just to be able to keep their houses up. A lot of the work that we’re doing is really fundamental repairs of existing affordable housing.

Again, I don’t think I realized the full extent of that problem either. Washington Post just had an article about a month ago, and I think it was the US Builder Building Coalition or something that housing group that had looked at the current state of American housing. They said that the average US house in America was 40 years old and crumbling. That’s the average home, right?

Imagine, translate that over 340 million people around the country, and what do we have, like 120 million homes, how much fundamental work needs to be done in just retrofitting existing affordable housing?

Wes Ashworth (33:25)

Eye-opening sort of stuff and really I’m glad we’re doing this, that more people get to hear it and learn about it and hopefully have those sort of epiphany moments. I’ll link a lot of that in the show notes as well too with Kiva and SELF and otherwise as well. I encourage listeners to please go check that out. A lot of people ask, what can I do? How can I contribute? This is a way, you know, you can take a small step and really make a difference.

Doug Coward (33:32)

If I could add to that, we’ve talked about Kiva as one example of what you can do. The other example is what you can do to your own home. I think there’s also a disconnect between all the different technologies that are out there and a lot of either misinformation or they just don’t know. You know, like putting in a high efficiency AC, we’re typically cutting people’s energy bill and carbon footprint by 20/30% percent, right?

A lot of people think solar energy is not cost effective. I’ve heard that over and over and over. The cost of solar has dropped like 80% in the last 10 years. It’s actually cheaper now to build your own solar system on your rooftop than it is to purchase carbon-based fuels off the grid. Another benefit of these home energy systems gets to the issue of energy independence.

When we saw Hurricane Milton come through the west coast of Florida and severely impact North Florida, Georgia, and all the way up into the Carolinas, one of the things that we saw right after that was a huge push and tremendous demand for people to integrate not only rooftop solar photovoltaics, but to also integrate batteries.

This isn’t just clean energy and saving you money. Now you’ve got emergency baseload power available to you during and after a storm event. If you’re elderly or maybe you’re disabled or maybe you are reliant on electricity for medical devices, food, air conditioning, whatever it may be. It’s a really valuable tool. It’s not just a way to save money, but it can also potentially, I don’t want to overstate and say save your life, but there’s an emergency response component to this.

Then lastly, it’s the energy independence piece. We just need to be smart about what we’re doing and why the state of Florida would buy billions of dollars of carbon-based fuels from other states and other countries to drive their economy instead of reinvesting those dollars back into the state to not only benefit local people and local businesses, but to take advantage of this enormous economic development opportunity, right? We could not only be installing solar panels in Florida, we should be making them here.

This is, if I can, I’ll share, I was working with a company that wanted to build a solar manufacturing facility and generate 1400 jobs. I worked on this project for almost six months. The company lined up financing for it. They’re literally ready to go. Then the current administration basically I’m trying to think of the right words here, but basically, got rid of the greenhouse gas reduction fund, got rid of the solar tax credit and created so much chaos in this space, that this company pulled out.

The numbers you’re seeing about the job losses, it’s not just the existing ones that we lost, but we also had more jobs that were coming. In my county, with 1,400 jobs in the solar sector, we were already connected with the local college ready to train local people, all went away. Gone. Because of the chaos and uncertainty that was created by the current administration. It was a huge missed opportunity. But it’s just from an economic standpoint. I think there’s just a lack of knowledge from many elected officials about the opportunities that exist for these technologies.

I’s just been a longstanding frustration of mine here in the Sunshine State where we just don’t have strong leadership on this issue. If it was a well-educated position and it was articulated as to why, I’d be a little bit more open to it. But it doesn’t make any sense on any level. Environmentally, socially, economically, we need to do better.

Wes Ashworth (37:27)

Couldn’t have said it better myself. That’s kind of a mic drop moment there. A lot of good insight in what you shared and I agree completely. Part of the reason I think it’s important to do these sorts of things and try to get education out there, speak to misconceptions, things like that. Even to your point of people making decisions based on solar data that’s 10 to 15 years old, I always encourage people to make a decision based on accurate information you whatever you do and make sure you have the real story there. I think that that stuff is critically important.

Doug Coward (37:56)

It makes me add one other thing because we’re not just a financing entity. We also provide a broad array of project coordination. We’re pre-screening all the contractors to make sure they have proper license and insurance. We’re checking quotes to make sure that people are not gouged by unscrupulous contractors. I can’t tell you how many people have come to me after they’ve invested in solar and they know I work in the sector.

They gave me their project and they’re like, “here’s what I did. Did I do okay?” Almost every time I looked at it, it’s like, no, not even close. In fact, I have one client here locally, who we had some unscrupulous contractor out of Miami come up, and unfortunately, they’re tarnishing the industry because they’re trying to rip people off. I hate to be that candid, but that’s what it came down to. This guy came into my office and said, “hey, I understand you guys do solar financing. I need your help.”

He gave me a copy of the invoice and I looked at it and I said, “not doing that.” And he goes, “what do you mean?” I said, “sir, I don’t know how to say this to you politely, but you’re about to get ripped off. “He said, “I am?” I said, “badly.” They were literally double charging price of solar in the state and he had no idea. Unfortunately, that’s not an isolated case. Many people are investing in these technologies.

We’re not even able to read that invoice and understand it and be able to figure out what is the market rate and what could I be getting. In that particular case, he called the contractor back, backed out of the project. The owner of the company called me and he was so upset. He said, “you are a financing entity. Your job is not to tell me what I can and cannot charge. Your job is just to finance my project.” Well, I said, “welcome to St. Lucie County, sir, and working with the Solar and Energy Loan Fund because we’re a nonprofit who’s looking out for the best interests of our clients. And we’re not going to allow you to use our program to rip off local people.” He threatened to take me up to the attorney general’s office and I said, “pick me up, I’ll go up there tomorrow with you and I’ll let them know how you’re trying to rip people off.”

The end of that story was that we did not allow that contractor to join our network because he’s trying to rip people off. We had that client re-bid the project out to three local qualified contractors, and I ended up saving him $20,000 on the price of the system before I even financed it. We cut it in half, right? It’s not just access to financing. It’s also knowledge about the technologies, pricing, and making sure you’re getting everything that’s needed for a good clean energy project.

Wes Ashworth (40:36)

Absolutely. I was going to ask you about that. Just the role with contractors, ywhat that looks like. I know there’s a vetting process, but also you’re benefiting those those contractors that are approved and doing things the right way. There’s some benefits as well to what you’re doing and how you’re going about that. Tell us a little bit about about that, the contractor side.

Doug Coward (40:41)

That’s a great question, Wes, because in the same vein that we’ve been talking about, where homeowners aren’t able to get financing, that means contractors are losing business. We did a survey of our thousand plus contractors and just wanted to get a sense of how much business are they currently losing because of credit scores and people not being able to qualify.

The answer was between 20% and 40% depending on which sector they’re working in. SELF is not just filling this financial void and helping the homeowner. We’re also salvaging projects for our contractors. IF we do this right, it’s literally a win/win for all. We also have eliminated a lot of unnecessary financing charges.

Typically, a solar contractor would have to pay what I would call a dealer fee. That is essentially paying an outside financier to get access to the money to finance the project. I’ll give an example. I had a contractor out of Orlando call me and she said, “I’ve got a $20,000 solar deal that I’m trying to get financed. If I use Mosaic, it’s going to cost me,” I think the dealer fee was 31 % at the time, something like that, so she’d have to stroke a check for $6,200 to this outside financier. Then of course, add that onto the cost of the project and pass on to the homeowner a $26,000 project as opposed to the original cost. I said to her, “we don’t charge dealer fees.”

Not only do our contractors gain access to financing that opens up these working class neighborhoods, and LMI areas, but it also eliminates these unnecessary financing charges, makes them more competitive, and then gives the end user homeowner a more competitive price in the end.

Wes Ashworth (42:44)

You’re doing incredible work. The benefits all around, there’s individual homeowners to the contractors to the whole community and everybody else and doing it the right way and really taking people’s best interests at heart and looking out for folks and their well-being is incredible.

Doug Coward (42:50)

We have one mom and pop air conditioning company that joined us at the very beginning, like when we started, and it wouldn’t surprise you that they’ve now done more projects than any of our other 1200 contractors or so. We’ve done, I don’t know, I haven’t looked at the number recently, but I think we’re probably around 1.5 million in projects that we’ve done with just this one company.

Imagine how impactful a million and a half dollars of economic development opportunity is to a small mom and pop shop, particularly through like COVID when there were so many businesses that were going out and hit hard. They told us they didn’t let anyone go and they were able to maintain. It’s really rewarding to see not only the benefits to the homeowners, which is ultimately who were trying to help and the impact and the transformative nature.

But it also is really exciting to see these small companies using our financing to grow their businesses and then hire more people. Of course, it has an effect down the supply chain and so forth. But yes, it can literally be a win-win situation all around if it’s done properly.

Wes Ashworth (43:53)

Absolutely. Exciting stuff for sure. Huge impacts obviously all around as you shared there. As we get closer to time, a couple just quick questions just as we get closer to concluding. Thinking about where SELF has come from and where you are today. Like what’s next? If you look into the future, what are some things you’re working on and what has you excited on the horizon?

Doug Coward (44:12)

No, that’s a really great question. Over the last two or three years, particularly when the greenhouse gas reduction fund was passed, it’s been pulled back by the existing president and is caught up in courts and so forth. But we decided that there was a need nationally for more green banks to pop up.

When we first started, think maybe 10 years ago, there was a couple of dozen green banks and there’s some really good ones out there. Connecticut green bank jumps out at me. There’s a number of groups, but there were also large areas of the country that had no programs at all. We decided that we were going to basically franchise our model. We’re going to bring our energy equity, inclusive lending, and try and fill those voids nationally. Our plan for expansion was not to go into existing states that have great programs and compete with them. That’s silly. We are going to go into areas that have no programs, don’t have any of these lending options available to homeowners and trying to set up.

But instead of us trying to raise money for bricks and mortar and expansion and literally have us expand the SELF-organization, what we decided to do was to partner with other green banks and CDFIs around the country who wanted to get into this space, but had no experience in doing so. What better than be able to connect with a pioneer in this space with 15 years of experience? We’ve invested millions of dollars in our FinTech platform. We have a 15 year track record. Why not partner with them, have them bring this program in?

We can literally plug into their FinTech platform, take advantage of their proven underwriting system, take advantage of the capital that they’re raising from all of these impact investors, and basically be able to fast track new energy equity lending programs in new states. That was our goal three years ago. Well, fast forward to today, we’ve now partnered with 13 community lenders. I believe 12 of those are green banks and one is a CDFI. We are now operational in 17 states and the District of Columbia, which basically constitutes about half the U.S. population.

That’s a moment to reflect, because when we started this organization in one county, never in my wildest dreams did I anticipate that we would even go beyond Florida. Right? In fact, I remember we got an award after a couple of years of operating. I was doing this presentation and I said, “we’re going to expand from Miami all the way up to Jacksonville.” Well, I thought I was ambitious, but I realized that I had actually undersold what we were going to do.

It really gets to the root of the issue, which is the demand for the products and services that we provide. I remember we were going into some state, I don’t even remember which one, and they’re like, “have you done a deep market assessment of the blah blah blah?” I’m like, “no, and I’m not going to, I don’t even need to, because the demand is so overwhelming. It’s not needed.” We just need to be able to set up the partnership, the program, operationalize them, bring in your contractor network, and just start working and get these things done.

It’s been an incredible journey. I have to close out with thanking the broader team that I’ve worked with from day one. None of this would have been possible without really extensive support from all, viewpoints, as I mentioned early in the conversation. Then the SELF team, we’re currently at 25 people. I’ve mentioned Duanne Andrade several times, and I will again, just because she’s played such a big part in the development and the leadership and strategy for the organization. But we have a ton of really talented and inspired people that I think all of us put our head on the pillow at night and really think about those transformative impacts that we’re making.

It’s just really rewarding work.

Wes Ashworth (48:32)

Absolutely incredible, great place to just land on and kind of just take with us and move forward. But Doug, thank you for the work you’re doing and for sharing these stories so openly. SELF is a reminder that clean energy transition is not just about technology or policy, it’s about access, dignity and who gets to participate and really the lives that it impacts.

To our listeners at this episode, challenge how you think about climate solutions, financing or equity. Just share it with someone who is interested in this and needs to hear it. Get the word out and again check those show notes for those important links to check them out as well. Subscribe to the show, leave us a review and with that we will see you next time on Green Giants.