State grants $9.7 million to increase access to capital for renewable technologies and energy efficiency projects
Non-profit partners Craft3, Puget Sound Cooperative Credit Union, Washington State Housing Finance Commission build on early successes with commercial and residential loan programs serving communities throughout the state.
The Washington State Department of Commerce has committed $9.7 million from the state’s Clean Energy Fund to three non-profit lending institutions: Craft3, Puget Sound Cooperative Credit Union (PSCCU), and the Washington State Housing Finance Commission. The grants will continue and expand successful revolving loan funds that provide accessible financing to businesses and homeowners for energy efficiency and renewable energy technology projects.
Craft3, a regional community development financial institution and PSCCU are joined this year by new partner the Washington State Housing Finance Commission in the second generation of Washington’s Clean Energy Revolving Loan Fund. The grant awards announced today are targeted at improving access to capital for Washingtonians. Craft3 has been awarded a $4.2 million grant, PSCCU $4 million and the Housing Finance Commission $1.5 million. Each entity will capitalize separate revolving loan funds with the awards.
“Washington state is committed to developing the energy technologies needed by communities and industries in the 21st Century low-carbon economy. Clean Energy Fund investments are making buildings more efficient, manufacturing renewable energy systems and equipment, and modernizing our electric grid for greater capacity and resiliency,” said Governor Jay Inslee.
Increasing energy efficiency in commercial and residential buildings delivers by far the greatest return-on-investment to property owners and the community at large by reducing energy use and carbon emissions and lowering energy costs overall. Washington has long been among the top tier of U.S. states for energy efficiency.
Home and business projects financed through the first round of clean energy loans are saving an estimated 112 million Btu per year. That is equivalent to the electricity used by 4,200 residential customers, representing about $40 million of future energy cost savings.
“By supporting public-private collaborations that foster innovation, entrepreneurship and capital investment in our clean energy future, we are working to strengthen communities all across the state,” said Commerce Director Brian Bonlender.
“The Puget Sound Cooperative Credit Union is proud of the work it has done to leverage state funds to help homeowners from Aberdeen to Zillah make their homes more energy efficient,” said Shannon Ellis-Brock, chief operating officer of the credit union. “And because we leverage those state dollars, the work we fund returns $1.60 in taxes to the state for every $1 of state funds we use. That’s a good deal for our borrowers, the environment and our state’s economy!”
Ellis-Brock said the credit union met its clean energy lending goal three years early.
“With capital from Washington state and other sources, Craft3 has already deployed more than $12 million through its Future Energy Loan Fund to increase energy-efficiency, reduce greenhouse gases and create jobs,” said Adam Zimmerman, acting president and CEO of Craft3. “This new award of $4.2 million will allow Craft3 to continue supporting innovative entrepreneurs having trouble securing financing in Washington. A strong economy requires access to capital for emerging business sectors like clean tech – so programs like this really move the needle.”
One of those businesses is Craft3 client Allumia, a lighting-as-a-service company based in Seattle that serves mid-sized commercial buildings.
“Allumia was able to speed up implementation of our customers’ energy efficiency projects by three times, thanks to Clean Energy Fund 1 resources deployed to us by our partner Craft3. This created both the need and the opportunity to hire a new operations team of three full-time project managers. As an early-stage company, securing revolving construction financing was a complex and challenging hurdle to overcome,” said Allumia CEO Aaron Block. “In the time since we received the loan through Craft3, Allumia has funded and developed efficiency projects that will save Washington residents and businesses 4.5 gigawatt hours of electricity each year.”
At the Washington State Housing Finance Commission, the $1.5 million grant will augment the Commission’s successful Sustainable Energy Trust. The trust will be earmarked for energy-efficiency retrofits of apartment buildings and nonprofits, as well as community solar projects.
“Utilities are major hidden costs of housing that really affect affordability, so it’s important for us to help multifamily properties save energy and to support community solar projects that generate energy for whole neighborhoods,” said Karen Miller, chair of the Housing Finance Commission. “Also, by helping nonprofits save energy in their facilities, we enable them to direct more money toward their missions.”
Since 2012, the Commission has financed over $19 million in energy projects. The Sustainable Energy Trust, a revolving loan fund, offers up to $1 million at below-market interest rates for terms of up to 10 years.
The revolving loan fund started in 2013 with $14 million in state Clean Energy Fund grants awarded to Craft3 and PSCCU. To date, it has provided more than 2,100 residential and commercial loans totaling more than $44 million. For the 2015-17 period, the program will expand to include a broader range of eligible projects, targeted efforts to better reach rural and underserved communities, and a third lending partner to extend the program’s financial impact. On average, every $1 granted from the Clean Energy Fund will leverage at least $10 in non-state investment, according to the State Energy Office at Commerce.
The entire Clean Energy Fund, which includes three other grant programs in addition to the non-profit revolving loan funds, is expected to leverage a $40 million state investment for 2015-17 with an estimated $200 million in private funds from industry partners.
The Clean Energy Fund was proposed by Governor Inslee and funded by the Legislature as part of the last two Washington State biennial capital budgets. The fund is designated for clean energy and energy efficiency projects. Clean Energy Fund investments are strengthening communities all across the state by helping to secure a low-carbon future for Washingtonians.
“Clean energy technologies developed, demonstrated and deployed in Washington are positioned well to sell into global markets, creating new jobs and business opportunities here,” Bonlender said.