Maryland residential solar loan program sees success in rough market
This story was originally published on Utility Dive. To receive daily news and insights, subscribe to our free daily Utility Dive newsletter.
A residential solar pilot program in Montgomery County, Maryland, has outpaced expectations by booking more than $3 million in loans since November, despite a declining residential solar market and ongoing uncertainty about the future of federal solar tax credits.
The program is a partnership between fintech platform OneEthos and the Montgomery County Green Bank, facilitated by OneEthos's affiliate Climate First Bank. It launched in November, with a goal of booking around 40 to 50 loans during its first year.
As of March, the program had booked 40 loans, and by the end of May that amount had doubled to 83 — a total of $3,062,224 in loans, program leaders shared with Utility Dive.
'In just a few months, we saw enough loan demand to meet our entire annual budget for the program,' said Rokas Beresniovas, MCGB's senior director of commercial business and climate finance.
The program's success comes amid lowered demand for residential solar nationwide. The market 'experienced its first annual contraction since 2017' in 2024, declining by 31% from 2023, according to a March Solar Market Insight Report from the Solar Energy Industries Association and Wood Mackenzie.
Residential solar companies have been struggling, and on Sunday, Sunnova became the latest of them to file for bankruptcy. In addition, the House's May budget bill proposed winding down the Inflation Reduction Act's 30% residential solar tax credit early, limiting its applicability to projects placed in service by the end of this year.
Marcio deOliveira, CEO of OneEthos, said he 'would not necessarily attribute the success or growth' of the program to customers trying to get ahead of political uncertainties. 'However, we do predict that going forward, uncertainty and changes would accelerate the growth,' he said. 'As we see the possibility of fewer incentives at the federal level, green banks become even more important — to step up, and provide incentives and support at the state and the regional level, to continue programs like this.'
deOliveira attributes the surprising level of interest in the program partially to the structure of what's being offered — a 30-year loan without dealer fees. The average term for a solar loan is from 15 to 20 years, with some lenders offering 25-year loans. Dealer fees often range from 15% to 25% of the project's cost.
While MCGB is 'focused on the commercial sector, and cannot directly lend to the consumers,' it can provide enhancements like subsidies in partnership with entities like OneEthos and Climate First Bank, said Beresniovas. MCGB is subsidizing the loan's 4.99% interest payment for the first ten years for qualifying low-income households. After the first 10 years, borrowers are responsible for a 7.99% interest rate.
'You have an incentive to pay it off in ten years to get the lower interest rate,' said Cindy Peña, the communications manager for the Montgomery County Department of Environmental Protection, who recently secured a loan through the program for solar, new roofing, an electrical panel upgrade and an electric vehicle charging station. 'My goal is to pay it off in ten years. I want to get it off my plate.'
Peña said she lives close enough to the Washington, D.C line to qualify for the district's solar renewable energy credits, which pay significantly more than Maryland's.
'My neighbors, many of them have solar because [of that],' she said. 'In a nice month, you can get $400 a month from D.C. … So I'm looking at that money to help pay off my loan, along with what I would be saving on Pepco.'
Peña said she still hopes to qualify for the federal residential solar energy credit. Her decision to move forward with a solar loan was made after the election, but 'before anybody really knew what was going to be happening at the federal level.'
'I'm hopeful,' she said. 'We wanted to get that federal rebate — I never thought it would be in jeopardy. But now, it could be.'
Peña said her husband had been wanting to install solar for some time, but she was first swayed to the idea in October when she spoke to the owner of a company that installs electric vehicle charging stations, who told her that Pepco rates would be rising soon.
As of June 1, the average residential Pepco customer 'using 614 kWh per month will see a 17.7% ($20.81) increase in their total monthly bill,' according to the D.C. Public Service Commission.
The DCPSC cited several market conditions for the bill increase: tightened supply from local power plant retirements; new reliability requirements; increased demand from new data centers; and increased renewable energy requirements in the region.
In other areas of Maryland, Baltimore Gas and Electric customers have also seen their energy bills increase. Beresniovas said he anticipates that rising energy prices will 'contribute to people considering solar, especially here in Maryland.'
Following its recent success, the partnership is looking to expand beyond solar to include energy efficiency upgrades, Beresniovas said.
'A lot of people install solar panels, but their homes aren't actually energy efficient, so they're still wasting energy through poor insulation, outdated HVAC, old leaky windows,' he said. 'We're looking forward to expanding this program in the next couple of months.'
Recommended Reading
Sunrun reports solid Q1 earnings amid tax, tariff uncertainty
Inicia sesión para acceder a tu cartera de valores
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hill
11 hours ago
- The Hill
Trump rails against green tax credits in big, beautiful bill
President Trump railed against the green energy tax credits included in his big, beautiful bill in a Truth Social post on Saturday. 'I HATE 'GREEN TAX CREDITS' IN THE GREAT, BIG, BEAUTIFUL BILL. They are largely a giant SCAM,' Trump posted. His comments come amid a GOP internal debate over the big, beautiful bill on how to roll back former President Biden's green energy tax credits. The Senate is taking a more lenient approach on this topic, while the House voted to 'sledgehammer' the tax credits. This is another point of disagreement that could slow the leadership's ability to meet the July 4 deadline to pass the bill in the Senate. Trump continued by saying he would rather the money be used anywhere else and that 'Windmills, and the rest of this 'JUNK,' are the most expensive and inefficient energy in the world, is destroying the beauty of the environment, and is 10 times more costly than any other energy.' 'None of it works without massive government subsidy (energy should NOT NEED SUBSIDY!). Also, it is almost exclusively made in China!!! It is time to break away, finally, from this craziness!!!' he continued. In August 2022, the Democrat-controlled House passed the Inflation Reduction Act (IRA), which included $369 billion for energy security and climate investments. This move underlined the need for domestic, clean energy manufacturing and decreasing greenhouse gas emissions. The Senate is debating how to decrease these investments. The text now allows the construction of clean energy infrastructure, such as solar panels and wind farms, to begin this year to receive the full credit amount. Before, when the bill was in the House, it demanded that those projects start only 60 days after the bill passed, essentially leaving no time for new clean energy investments. The Senate is also allowing projects that begin construction in 2026 to receive 60 percent of the credit, in 2027 to receive 20 percent and in 2028 to receive no credits at all. The House version would give no credits at all to projects that did not start producing electricity by 2028. The Senate is still slashing Biden's IRA significantly. Before the bill's passage in the House, some moderate Republicans issued a joint statement claiming that sledgehammering the IRA would 'provoke an energy crisis or cause higher energy bills for working families.' Nevertheless, the bill still moved up to the Senate.
Time Magazine
a day ago
- Time Magazine
What Conflict in the Middle East Means for Climate Change
The consequences of the increasingly urgent hostilities between Israel and Iran are multifold—humanitarian, geopolitical, and so on. If the situation deepens, it could also have important implications for energy markets and, by extension, climate change and the energy transition. Central to that picture are oil prices. In the past month, oil prices have risen nearly 25% as hostilities have deepened. On its own, Iran is a significant supplier of oil to global markets, producing roughly 4 million barrels of oil daily, and traders fear that its supply could be cut off. A bigger conflagration could mean significantly higher prices with fears about supply issues across the region, especially as traveling through the Strait of Hormuz grows trickier. Governments play a key role shaping everything related to the production and consumption of energy, but nonetheless energy is not divorced from market fundamentals broadly and, specifically, the effect of prices. And perhaps no price is more closely tracked in energy markets than the price of a barrel of crude. But how a high-price environment for oil would shake out is complicated—with some clear pluses for decarbonization efforts as well as some big challenges. On the one hand, high oil prices incentivize investment in alternatives, in this case electrification. Consumers may take a closer look at electric vehicles to save at the pump. Or they may just buy smaller, more fuel efficient cars, a climate win. Meanwhile, companies may take another look at the numbers for ditching diesel in heavy industry. On the other hand, high oil prices incentivize fossil fuel companies to drill more to try to take advantage of high prices. Projects that looked too expensive when prices were low start to take on a new sheen when they're on the rise. None of these factors are likely to play out in a straightforward fashion—and we don't have to look too far back for a similar analogue. In 2022, oil prices rose dramatically following Russia's invasion of Ukraine, quickly shifting the conversation around clean energy. Clean energy advocates responded vociferously that renewables could provide stability as Europe tried to wean itself off of Russian energy. In the U.S., they argued, renewables would contribute to energy security. These arguments helped advance clean energy—even if they weren't decisive. The RePowerEU initiative, launched in the wake of the invasion, helped accelerate the expansion of wind and solar power in the bloc. And energy security was among the arguments that helped get the Inflation Reduction Act across the finish line. At the same time, oil companies largely avoided bringing new oil production online. It was hard to predict how long the high price environment would be sustained. Moreover, executives concluded that they could easily reap the financial benefits of higher prices and resulting higher profitability without taking on the risk of big new investments. This time around we can certainly expect Trump to double down on his pressure on the industry to drill more to keep prices down (Biden did this, too). But up to this point the industry has largely rebuffed these entreaties. So how should companies understand the oil price dynamic? For one, it's helpful to keep an eye on the long-term trajectory. In its annual oil market report released this week, the International Energy Agency found the market to be well supplied in the medium term even as demand continues to grow because of planned increases in output from the U.S., Canada, Brazil, Guyana, and Argentina But for companies the volatility is also a reminder of some of the greatest strengths of renewable energy: it's local and not prone to geopolitical disruption. And, while production may vary day-to-day as the winds blow, prices can be set for decades—immune from the whipsaws of global commodity prices. To get this story in your inbox, subscribe to the TIME CO2 Leadership Report newsletter here.
E&E News
a day ago
- E&E News
Megabill could derail hundreds of planned clean energy projects
House and Senate Republicans are divided over how hard a blow their megabill should strike against the clean energy tax credits at the heart of Joe Biden's climate law. Hundreds of projects — overwhelmingly in Republican districts — hang in the balance. An analysis by POLITICO identified 794 wind farms, solar plants, battery storage facilities and other clean electricity generation projects that have not yet begun construction and could be at risk of losing two crucial tax breaks if the House prevails in rolling back Democrats' 2022 climate law. A competing proposal from the Senate Finance Committee would make a less aggressive attack on the law's incentives — but even then, hundreds of those projects could still lose all or part of the tax breaks if they don't move fast enough to start construction. Advertisement The ultimate shape of the Republicans' 'big beautiful bill' stands to have a major impact on the wave of clean energy projects that Democrats' Inflation Reduction Act helped launch across the country, with implications for jobs, climate change and the United States' ability to meet the power demands of technologies such as artificial intelligence. Clean energy makes up the majority of new power capacity expected to be added to the nation's electric grid during the next five years, according to a POLITICO analysis of data from the U.S. Energy Information Administration.
