VSECU’s mission is to improve the quality of life for all Vermonters, and to achieve this, it strives to bring people together to empower the possibilities for greater financial, social, and environmental prosperity.
As a triple bottom line financial cooperative, it strives to be an innovator in the credit union industry and sees itself as a part of a larger movement of purpose-driven and values-based businesses that consistently reach above and beyond industry norms.
The VGreen Programme
In response to the growing demand for solar and efficiency financing in the early 2000s, VSECU developed VGreen, a suite of products that are designed to maximize the savings of energy upgrade projects. The program has grown to not only include loan products, but also a money market account, the VGreen MMA, where the deposits are recirculated to fund VGreen loans. VGreen now has a $95M portfolio, and the one-year loss ratio is 0.18%, the lowest of all VSECU’s portfolios.
VSECU membership is open to anyone who lives or works in Vermont. The fact that Vermont is a state with no-to-low population growth has meant that for clean energy businesses to grow and thrive they needed to look beyond their borders. In 2017, the credit union extended its field of membership, forming a common bond partnership with a trade organization, Northeast Sustainable Energy Association (NESEA) and now welcomes NESEA’s members to become VSECU members. This partnership facilitates growth and diversity in the VGreen program that brings many benefits to the entire membership.
VSECU continues to adapt and innovate the VGreen program to the market challenges and technology advances in product development. The credit union funds loans for bicycles, appliances, cold climate heat pumps, solar projects, home battery storage, geothermal heating systems, comprehensive energy projects, electric vehicles and motorcycles, and more. It underwrites energy savings as a utility expense offset and looks to partnerships to provide credit enhancements such as loan loss reserves to increase access to financing more members who face financial challenges. Energy savings can mean healthier, safer, and more durable homes, and more affordable, reliable transportation – the basics needed to live better lives.
Products and processes
The products developed by VSECU include unsecured options – The Energy Improvement Loan, an unsecured loan with a fixed, discounted interest rate and terms up to 20 years, the Investment Tax Credit (ITC) Loan, also unsecured with a lower initial payment period during the time the borrower is waiting to apply for the Investment Tax Credit on their income taxes. They also offer a home equity option — The Energy Equity Loan that features discounted rates and no-or-low closing cost expense. We have a Green Vehicle loan with a 100 bp discount off our standard auto loan rates for qualifying Electric Vehicles (EVs), and a 50 bp discount for other high-MPG vehicles.
In addition, VSECU also offers an off-grid mortgage for those interested in financing a home that is not connected to traditional electric utilities. In 2021, they piloted the EnergyFirst Mortgage through a Department of Energy (DOE) grant-sponsored partnership. Borrowers could roll energy upgrades into a refinanced mortgage with a discounted interest rate, the guidance of an energy coach through the process, access to a pre-approved energy contractor to guide and supervise the project, and an allowance for the additional cost of the green appraisal and post-closing project inspections.
These projects received a DOE Home Energy Score, pre- and post-project completion, and an energy savings guarantee. While the pilot program is complete, the credit union is evaluating the results and exploring ways to build the product into our regular mortgage product offerings.
Partnerships
Vermont is home to many clean energy vendors and installers of varying sizes and business models, and they all can offer standard VGreen financing to their customers. VSECU offers the VGreen vendor program for companies with whom they have established relationships and they wish to further enhance their marketing strategy by offering local, customer-centred, financing options. The program features a few levels ranging from a marketing-only partnership where they create a shared web page for their customers to access VSECU’s standard rate VGreen loans.
Other levels feature an interest rate buy-down option for VGreen loans designed for solar or other clean energy projects, as well as other benefits to make financing easy and affordable to benefit our mutual customers. This program is designed for those installers who understand the value of a financing program that features discounted financing rates, competitive pricing, and wrap-around service as part of a customer-focused clean energy adoption experience.
VSECU also partners with Efficiency Vermont, the primary efficiency utility in Vermont, to offer the Home Energy Loan, subsidized financing for qualifying home energy upgrades. With interest rates as low as 0%, borrowers can benefit from energy savings right away by financing a project and spreading out the cost and the savings can offset loan payments. They also benefit from the guidance and services of qualified energy contractors and can access the rebates and other incentives to further bring down project costs.
Energy savings can mean healthier, safer, and more durable homes.
Since the early days of VGreen financing at VSECU, the credit union has followed a growth strategy that prioritizes mission and member needs, while responding to vendor advice and market demand. It works with partners to adapt to the market realities and work with their customers—VSECU’s members. The pandemic has presented additional challenges (supply chain, workforce) as well as opportunities (ARPA and other funds) to consider initiatives in areas that have been identified for new expanded funding, such as weatherization and electric vehicles. The current market environment and the rising cost of living make this work even more urgent.
As VSECU looks to consider ways to grow and diversify green lending, it will continue to collaborate with its current partners, listen to consumers and businesses, and form new mission-aligned partnerships to provide financing solutions that adapt to the clean energy market.
