Client: Gladys Cruz
Client Location: Lawrence, MA
CDFI: Mill Cities Community Investments
CDFI Service Area: MA
Financing, with support from OFN’s Renewable and Energy Efficiency Financing Grant Program
Old homes offer a unique opportunity to step back in time and explore centuries that have shaped the nation’s history. However, they are often less energy-efficient than new ones. As a result, homeowners, particularly those in low-income communities, experience higher energy burdens, and this disproportionately affects Native communities and communities of color.
A study from the American Council for an Energy-Efficient Economy (ACEEE) shows that “low-income, Black, Hispanic, and Native American households all face dramatically higher energy burdens – spending a larger share of their income on energy bills – than the average household.”
Image: In 2020, ACEEE published a research report that examines how household energy burdens — the percentage of household income spent on energy bills — varied among specific groups, considering factors like income, housing type and age, tenure, race, ethnicity, and occupant age.
In Massachusetts where Gladys Cruz lives, homes are among the nation’s oldest and have one of the highest electricity utility prices in the country.
Gladys has owned an 1890 two-family home for the past seven years in Lawrence, MA. When the roof on her house needed to be replaced, she began shopping around for a roofing company to support her home improvement project. She was also exploring the possibility of a rooftop solar system.
However, most of the companies offered various solar products at high rates or with escalation clauses.
Low-Income Households Still Face Barriers to Clean Energy
Although solar product prices have decreased over the past few years, homeowners in low-income communities continue to face many challenges when it comes to the clean energy transition.
In addition to energy burdens, some of the challenges include the lack of upfront costs, low credit scores, lack of awareness about available energy programs, policy issues, and more. These impact their ability to finance their energy efficiency retrofit projects.
Yet, these are the communities CDFIs have served for decades and currently, 83% of OFN member CDFI clients are low-income rural, urban, and Native communities.
CDFIs at the Forefront of Advancing Energy Justice
One of the contractors Gladys connected with suggested she contact OFN member Mill Cities Community Investments (MCCI) to support with financing her home improvement project, as the CDFI did several years ago with her home’s windows.
Enthusiastically, Gladys contacted MCCI to learn about their residential product offerings including the new holistic Solar Plus loan program, an affordable solution for homeowners to own rooftop solar panels and make energy-efficient home improvements.
The Solar Plus loan program offered Gladys a competitive interest rate of 2%, which is rarely found in this high-interest market, and subsidies to help her reduce the cost of the project and make any improvements needed to transition to solar energy. As part of the program, Gladys completed a MassSave energy audit and a decarbonization assessment, which identified building envelope improvements and provided her with guidance on how to fully decarbonize her home.
It also helped that she had a trusting, standing relationship with MCCI.
MCCI has built deep trust and relationships in the surrounding communities it serves, making Gladys feel secure that the organization had her best interests in mind throughout the process and she didn’t have to worry about predatory practices.
The CDFI also has built a reputation for understanding the linguistic and cultural needs of the Spanish-speaking community in Lawrence and surrounding towns, filling a gap not met by mainstream financial institutions in the area.
“I am forever grateful for MCCI and their loan products. I am excited to own solar and share the benefits with my tenants,” said Gladys. “MCCI has always been there when I needed them. First, I received a loan for my window replacement, and now I can add solar and replace my roof.”
Did you know that 55% of OFN members offer green lending products? OFN has called on the CDFI industry to increase that number to 100% in the next five years.
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