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VCIB Unveils First Dedicated Loan Program for Commercial Solar Projects

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The Energy Mix is a Canadian non-profit that promotes community awareness of, engagement in, and action on climate change, energy, and post-carbon solutions. Each week, we scan up to 1,000 news...

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  • Jun 14, 2021

Canadian businesses and non-profits will be able to borrow up to $10 million to install solar panels on their properties under a new commercial solar financing program introduced by the Vancity Community Investment Bank (VCIB).

It’s the country’s first dedicated loan program for businesses and organizations interested in financing and building their own solar projects, rather than buying power from a renewable energy developer. “Specialized financing is essential to properly support the growth of our clean energy industry here in Canada,” VCIB wrote this week, in an e-blast announcing the plan.

The program is the first of several the bank plans to introduce for renewable energy, energy efficiency, and energy storage, VCIB executives told The Energy Mix this week.

The new offering stands in stark contrast to the lending priorities of Canada’s five biggest banks, which collectively directed nearly C$560 billion to fossil fuel projects in the five years after the Paris climate agreement was signed, according to analysis released in late March by a coalition of U.S. groups.

On the landing page for the new program, VCIB presents itself as the country’s only federally-regulated bank that is also a B Corp, “dedicated to building a sustainable economy by serving the small-to-mid size renewable energy market.” The program covers up to 90% of equipment, installation, and engineering costs with loans ranging from $500,000 to $10 million, offering “fast and flexible” financing that can be put in place in as little as four weeks.

VCIB is also introducing a solar installer partner program to help developers point their clients to project financing. The program is available in every Canadian province but Quebec, for solar arrays with capacity of at least 100 kilowatts.

Trish Nixon, VCIB’s managing director of commercial impact banking, said the new programs are consistent with the bank’s position as a Schedule 1 financial institution with an impact mandate.

“Every decision we make in terms of where we fund our climate effort and deploy our capital goes through the lens of its impact on people and planet,” she said. “That’s our raison d’etre as a bank. We’re owned by Vancouver City Credit Union in British Columbia, so we’re member-owned. We’re a for-profit bank, but the people and the planet are just as important to our team as the profit.”

She traced the flurry of new activity back to the bank’s November, 2019 acquisition of CoPower, a Toronto-based clean energy investment firm. But where CoPower never offered private financing for companies that wanted to own their own solar projects, “now with VCIB, we do.” That shift “is very much an extension of our sustainability-focused lending, and an additional solution we can provide to the market to make sure these projects can be deployed as quickly as they’re needed.”

While the wider transition off fossil fuels made it an opportune time to expand VCIB’s renewable energy lending, Nixon added, the bank takes a wider view of its own purpose.

“The underlying climate crisis is the motivator to finance sustainable projects,” she said. “We know that in many cases, the economics of clean energy projects make sense. We know the technology exists to have more renewables, to have less reliance on fossil fuels. But business model and financing solutions are a really important part of making sure projects are deployed, and for decision-makers to be able to say yes, a turnkey solution is often required.”

By making financing available and convenient, “we hope we can be a part of accelerating the deployment of renewable energy.”

Solar is just the beginning of a “very long electrification journey,” said Greg Overmonds, VCIB’s head of digital and customer experience, pointing to an energy storage financing deal the bank signed last month with California-based Stem Inc.

“Solar is a key part of this, but electrification in this country will be going on for decades,” Overmonds said, with storage, electric vehicle fleet charging, and other opportunities on the horizon. “This is the start of VCIB’s continual leadership, we hope, in how we finance the net-zero economy.”

“We have to always be looking down the line,” Nixon agreed. “The transition takes time, but solar is a technology we have available to us now, it’s very low-cost, and it makes sense for businesses to use it to power their facilities. Being a part of that rollout is one important role that we as a bank can play, and we plan to apply the same model to other forms of clean energy and energy efficiency interventions. That’s all part of the vision and the journey.”

The Energy Mix contacted four of Canada’s Big Five banks to ask what similar programs they had in place or under development. A CIBC public affairs consultant said the bank had “nothing to share at this time”. The Royal Bank, TD Bank, and Scotiabank had not replied as The Mix went to (virtual) press.

Robert Hornung, president and CEO of the Canadian Renewable Energy Association, said VCIB’s move is one sign of a maturing renewable energy market in Canada.

“It’s a recognition that these types of investments are not niche investments anymore,” he told The Mix. They’re increasingly common, they’re mainstream, due to the plummeting cost of renewable technologies coupled with rising customer demand.

“Financial institutions are responding to customers who are interested in making these types of investments, and for multiple reasons,” Hornung said. “Some of them are there because of concerns over climate and sustainability. Others are looking to reduce their electricity bills. Some are just looking for increased energy independence and better reliability.” And there’s also growing recognition, reflected most recently in the new Canada Greener Homes Grant, that energy efficiency and rooftop solar can go hand in hand.

“If you’re going to be making a significant investment in renovating your building structure, it makes sense to consider it on a system basis, and to look at both energy efficiency and energy supply,” he said.

Canada’s new promise to cut greenhouse gas emissions up to 45% by 2030 will mean fully decarbonizing the electricity grid, “and then significantly expanding that grid, probably by double or more, so that electricity can substitute for fossil fuels in transport, buildings, and industry,” Hornung added. With the International Energy Agency now calling for rapid decarbonization and projecting a rapid decline in fossil fuel demand, that path “is now almost going to be defined as conventional wisdom.”

But “where that clean electricity is going to come from is a whole range of different sources,” he said. “Wind and solar are particularly well situated because of their cost competitiveness and the abundance of the resource. But they’ll also happen at different scales,” from utility-scale projects to smaller, behind-the-meter options like demand-side management, demand response, electricity storage, electric vehicles, and more.

Hornung said he didn’t know of any other banks that had offered tailored solar financing package like VCIB’s, “but again, these institutions will be responding to customer demand.”


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