Borrowers Finding Green, as in Dollars, Lean

It’s no secret that credit is harder to come by these days.

But for people interested in energy improvements, borrowing money may be even tougher.

Jack Bingham is with Seacoast Energy Alternatives in Somersworth.

He says most of his customers are retirees who use savings to pay for their solar systems – not people who need to pay over time.

And that’s because, he says, it’s so hard to get a bank loan.

Bingham: They’re not afraid to lend money for cars. Well, a car there’s no return on a car. It costs you money the day you buy it, the day you get rid of it and every day in between. We’re talking about buying something here that actually saves people amazing amts of money.

A few New Hampshire banks and credit unions do offer energy loans.

Ocean Bank offers a prime minus one loan for businesses doing energy upgrades.

And Monadnock Community Bank and Northeast Credit Union offer consumer energy loans.

But by and large, banks treat residential energy upgrades like any other home improvement – meaning that they’ll offer a typical borrower a home equity line.

Jerry Little is president of the New Hampshire Banker’s Association.

Little: When you’re doing a home improvement, that’s the product that’s there.

But some energy advocates argue that home equity lines don’t do enough.

First, they obviously don’t help business borrowers.

Second, the rates aren’t always low enough.

Some bankers argue that borrowers should get lower rates, and be extended more credit than the average borrower.

After all, they say, energy improvements save borrowers cash that they can use to repay loans.

Over the last few years, a handful of so-called “green banks” have sprouted up in California, Florida, and Texas.

Frank Baldassarre is the CEO of E3 Bank, a green bank that hopes to open this fall in Philadelphia.

According to Baldassarre, New Hampshire’s situation is typical.

He spent 25 years as a conventional banker – and he says banks don’t get this new green economy.

And he says consumers and businesses need bankers who understand how to work with green rebates and tax credits.

Baldassarre: Going to a bank that understands all that can make the economics of these systems very viable today.

Jerry Little says New Hampshire bankers want to offer a new green mortgage product for people building energy efficient homes.

But he says it’s not that easy.

Little: The key to all that is finding someone who’s proficient at doing the proper energy certification and getting an appraiser that recognizes that energy certification.

Wayne Gordon of Monadnock Community Bank says banks that aren’t lending money for energy projects are missing the boat.

Gordon: Why others aren’t doing it out there, I don’t know. I think there’s a certain fear factor out there with some lenders.

But then again, there is that chicken and egg problem.

Without enough consumer demand, banks won’t explore this largely uncharted territory.

Gordon’s new energy loan program was a huge success last summer, when energy costs soared.

Gordon: I gotta be honest, when oil prices dropped, it was like somebody turned the faucet off, everybody kind of forgot about it.

Oil prices, of course, are already beginning to creep back up.

In the near term, look to New Hampshire’s 23 credit unions to get into the energy-loan game.

Rob Kimmett of the New Hampshire Credit Union League says this fall, many more credit unions will offer energy loans to homeowners.

Kimmett: This way they’d increase the value of their property but they’d also save money on costly fuel and kind of remove themselves from the fluctuations in the market.

Last year, Kimmett says, credit unions provided cash-strapped consumers a lot of emergency fuel-assistance loans.

Helping people reduce the amount of fuel they use, he says, is much more sensible.

For NHPR News, I’m Elaine Grant.