Clean Energy for All: New Loan Program Broadens Access to Green Home Upgrades

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Across the United States, the wealth gap is seen and felt in various areas, from wages to investment funds, and all aspects of owning and improving property. BIPOC and low-income Americans struggle in specific ways because of the wealth gap, including a lack of equity, savings, and access to clean environments. Clean Energy Credit Union (CECU) {GBN} is seeking to change that with the Clean Energy for All loan program.

"The Clean Energy for All Program will help underserved communities afford energy-saving, home and transportation upgrades, saving individuals money on utilities bills and creating a cleaner environment," says CEO Terri Mickelsen.

"Opening the door to more equity, economic mobility, and opportunities for those impacted by credit or income challenges due to systemic racism or other injustices, and disproportionately affected by the climate crisis, is our goal."

How Does the Loan Program Work?

After soft launching with over $800k loans financed in 2023, CECU is officially launching the program for everyone. Its overarching goal is to ensure everyone, regardless of income and barriers due to systemic discrimination, has access to affordable clean energy.

The program is an established special purpose credit program, authorized by the Equal Credit Opportunity Act and implemented by Regulation B, to meet the credit needs of those previously underserved and frequently denied.

Through this program, BIPOC and low-income borrowers can receive a 0.50% discount on CECU's standard loan rates. Loan types related to clean energy include:

• Solar panels
• Geothermal heat pumps
• Green home improvements
• Electric vehicles
• Electric bicycles

Clean Energy for All also aims to help people facing credit challenges.

To ensure a fairer chance of loan approval, CECU looks beyond traditional credit scores to factors like rental history, utility payments, and employment stability. Further, if borrowers have a credit score below 680, they can qualify for a discounted rate, which can sometimes be more than the offered 0.50% discount.

Wealth Cannot Dictate a Safe and Healthy Life

With increasing inflation and stagnant wages, people across the United States are feeling the pressure from the cost of living. According to a 2022 Pew report, incomes have steadily risen for the upper class since 1970 but plunged for those in the middle class over the same period.

From 1971 to 2021, the middle class dropped from 61% of all US adults to just 50%. Aggregate income held by the middle class has also dropped-from 62% in 1970 to 42% in 2020, while the upper class's aggregate income increased by 21 points.

These chasms of inequality are felt more acutely by different communities across the country.

According to the latest data from the Federal Reserve's Survey of Consumer Finances, the wealth gap between the median white household and the median Black household rose to $240,120, a nearly $50k increase from 2019.

In 2022, median Black wealth topped out at $44,890. Non-white Latino or Hispanic households had a median $62,000, while white households' wealth median was a staggering $285,000.

Wealth gaps like these lead to a significant difference in quality of life, with those at the top likelier to have equity such as homeownership, investments and savings, and live in nicer and healthier neighborhoods and environments.

In another 2022 Pew report, nearly three-fourths of all adult Black Americans said they have just enough money to meet their basic needs, or "a little left over for extras." One in seven Black adults are working more than one job to meet their basic needs.

When things like safety nets and clean air are not inherent rights, but "perks" for only those who can afford them, society has undeniably failed people and planet.

Everyone Deserves a Home and Clean Environment

One major area where Americans are feeling the tight squeeze is affordable housing. A 2022 Pew survey showed that 85% of all Americans consider the availability of affordable housing either a major or minor problem in their community, compared to 14% who said it isn't a problem at all. Black Americans also largely outrank other groups and communities surveyed saying that affordable housing is a "major problem."

There are several benefits to owning a home, including building generational wealth, equity, and credit, as well as benefits from community and for a family's health. Housing discrimination means not everyone gets to enjoy these benefits at the same rate.

Only 41.7% of Black households own their homes-the lowest homeownership rate nationally among any group. The Black-white homeownership gap exceeds 30% in 37 states and 40% in 10 of those states.

Much of this is due to the wealth gap leading to disproportionate loan rate denials, something CECU wants to help fix.

According to the most recent Home Mortgage Disclosure Act data and the Urban Institute, Black Americans are denied all housing loan types, including home improvement loans for things like green projects, at higher rates than every other race or ethnicity group.

Denial rates also disproportionately affect those with lower incomes and credit scores, according to BankRate, and Black Americans are amongst those with the lowest incomes and credit scores.

Renewable and clean energy provides many benefits, from job creation to a more reliable and secure power grid. For homeowners and residents, the benefits are crucial. Making energy improvements to a house can help lower costs and make energy more accessible for remote, coastal, or isolated communities.

The Clean Energy for All program wants to see all Americans receive these economic benefits-but that's not all.

Clean energy also helps reduce carbon emissions and air pollution, which can be fatal. Cancer Alley is a stretch of land along the Mississippi River in Louisiana that is home to 150 petrochemical plants and refineries-and higher rates of cancer compared to the national average.

For people living in majority Black and low-income areas of Cancer Alley, their cancer risk is over 10% higher than in majority-white areas. This is not a coincidence, but instead an example of environmental racism.

While making a home more energy efficient won't solve every problem, or fix places like Cancer Alley, it can do a lot and deserves to be enjoyed by all.

In early 2024, CECU hit $1 million in clean energy financing, with more on the way.

"We are committed to building a more equitable and sustainable future," says Mickelsen. "The Clean Energy for All Loan Program is just one step in that direction."

Clean Energy Credit Union is one of thousands of businesses who have been certified as a Green Business Network member, a designation given to businesses which meet or exceed Green America's standards for social and environmental responsibility.