In the midst of what is developing into a solar industry crisis, OneEthos powered by Climate First Bank uses its ethical model of solar lending to set itself apart from the competition. In discussing the solar industry, we recognize a divide into two semi-distinct markets: the residential solar market and the commercial solar market. The residential market pertains to individual consumers who seek to place solar panels on their homes, whereas the commercial solar market deals more with solar on commercial buildings, solar farms, and utility-scale solar.

Utility-scale solar is a growing market. Financially, it is backed by utilities nationwide. In late 2024, we are beginning to anticipate public money from the Greenhouse Gas Reduction Fund pouring into it as well. Although OneEthos is only starting to get involved with commercial solar, they have been active in the residential sector for a couple years now.

Over the past several year, the residential market has seen a sizeable downturn as interest rates have risen, making solar less affordable for consumers. Many consumers rely on loans to finance their solar, which is typically not a minor expense. When interest rates rise, it is less feasible for consumers to borrow money, meaning installers see their business slow. As that happens, some of these installers are forced to lay off their employees. In addition to having less revenue, installers saw a higher borrowing cost. During the first six months of 2024, many installers, including some of the largest in the US, closed their doors.

Despite this, the situation began taking a turn as interest rates dropped by 0.50% in September 2024, making solar more attainable for many working-class households. Regardless, the industry is still swamped with dishonorable practices, leaving consumers hesitant toward this investment. Solar companies in recent years have been misleading consumers, sometimes claiming that their power bill would be entirely offset, when in fact it may only decrease by 50-70%. Both the government and consumer advocacy groups have been working to impact sales and practices within the solar industry.

For this reason, many consumers are now moving toward the solar leasing model. Whereas lenders provide financing to consumers that contract an outside company to put solar on their home, in the leasing model, the consumer pays the lessor to maintain the equipment on their property. The consumer, however, does not own these panels, as they are the property of the lessor. An issue arises when the leasing company is not reputable or is not able to maintain the system well. At that point, consumers are left paying for an expensive system that doesn’t perform over time. Many consumer advocacy groups nationwide are beginning to focus on ending this practice.  

“For us, we look at that and say it’s disappointing that has happened to the industry. But, we also look at it as an opportunity because we provide a very ethical solar program with no hidden fees,” Chris Cucci, EVP, Chief Strategy Officer at Climate First Bank said. “We are very selective about the installers that we let have access to the program. We want to provide our customers with some assurance that we are helping them through the process by keeping everybody in check. This means making sure the installer is doing things right and making sure the financing [consumers] are being offered is honest and transparent, and that what they agree to is exactly what they are going to receive.”  

When leasing solar, consumers can apply for a 30% tax credit from the IRS, helping to offset income taxes. Because of this, many solar lenders give their clients a lower payment for the first year, expecting that the consumer will then make a large paydown using their tax credit. Although at first glance this may seem like a workable system, the problem arises when we consider that many consumers are not eligible for the full tax credit. This means that after the first year of having solar, their payment increases by 50% or more. Consumers are then stuck with a payment that may be higher than their initial power bill, putting them in a worse position and giving the solar industry a poor reputation.  

Consumer-centric companies like OneEthos focus on educating and informing consumers so they know the risks related to not being able to fully monetize the solar tax credit. Unlike other lenders in the space, OneEthos and Climate First Bank will underwrite to the full loan payment without factoring in the reduced loan amount after applying a tax credit. This means that consumers are not stuck with a loan they can’t afford.  

"We are a little bit unique at OneEthos and Climate First Bank in that OneEthos is a technology company, but it’s backed by a bank,” Chris explained. “It means that things are a bit different, like how we are able to price our loans and the terms we are able to offer. Because we have a lower cost of funding, it gives us the ability to be more competitive long-term on the type of loans we can do, versus a non-bank lender.”  

OneEthos is a solar lending platform that provides loans, pricing and sales tools for the installers. Every customer who qualifies with OneEthos will receive the same offer, regardless of their credit score and income. While solar lenders typically offer 20–25-year terms, OneEthos allows consumers to finance on 30-year terms, lowering their monthly payment and making solar more accessible.  

In the process of solar lending, the lender typically charges the installer a fee, called a “dealer fee,” which is passed on to the consumer. These fees could be as high as 35-40% of the total installation cost. If a consumer is looking to install a unit that costs $30,000, the installer will charge them $42,000, effectively deceiving the customers by putting them under the impression that $42,000 is the price of the installation. Were that same consumer to pay in cash, they would have saved $12,000 since they avoided the dealer fee.

“With OneEthos, we don’t do that. We charge no dealer fee, so whether they choose to pay cash or finance, they have the same cost for their solar. We do that because we feel like it’s the right thing to do,” Chris said. “It’s more honest to the consumer and it helps us achieve our mission. Our mission is to put solar on rooftops across the country, and if we’re price gouging people and overcharging them with hidden fees, that’s not going to happen, so we need to do whatever we can to make solar financing honest and affordable for everyone.”  

On the installer side, OneEthos is beneficial because it offers flexible products. When solar installers work with lenders who charge dealer fees, they seem deceptive toward their customers. They develop poor relationships, being forced to pass on this extra expense outside of their control. Good installers appreciate transparency in financing because it helps them do what is right for the customer by not needing to tip-toe around the subject of hidden fees.  

“One of the ways that they can solve that is by aligning themselves with a lending platform that promotes ethical lending at the forefront, and that’s really what I think is cool about what we do,” Chris explained. “[Dealer fees] were like this dirty secret in the industry for the past few years. People in the solar industry knew about it, but you never heard customers talking about it."

In addition to providing ethical loans that benefit both the installer and the consumer, OneEthos encourages consumers to become educated on the workings of the solar industry. By doing this, they are empowered to make the best decision for themselves financially. The installers' well-being is also a priority in that OneEthos prides itself on its ability to provide consistent, high-quality service.

“We have the culture of a community bank, but in a digital business. Our roots are in Climate First Bank and creating this community bank atmosphere. Community banks are known for being focused on customer service and personal attention to the people that they work with,” Chris said.  

OneEthos has reached a point where they are ready for nationwide expansion. As of September 2024, they are active in 27 states across the country, expecting to be in all 50 by the end of the year. Currently, they have partners who operate nationally. Starting soon, OneEthos will be able to finance these partners’ projects across the US, spreading their impact nationally.

“With OneEthos, we have a digital system with automated underwriting so that everything is done efficiently online. If the installer needs help, they have the ability to talk to a live person. They can call and talk to Dema or one of her team members. They all know Dema and Heather because they can pick up the phone and talk to them. It’s not a call center, it’s not an 800 number. When [the installer is] sitting there with a customer face-to-face and they have a quick question, they have people available to them.”  

Over the summer, One Ethos soft-launched a commercial lending platform that will provide quick credit decisions for solar. It has undergone testing during the past several months and is currently in the process of receiving feedback. After all the needed adjustments are made, OneEthos will possess this revolutionary system which will enable them to provide installers with a slick digital experience, just as they do for consumers.  

“It is our role as a community lender to educate consumers in the market and to advocate for them. One of the ways we can do that is just by building awareness,” Chris explained. “Florida is our home state and we love making a difference here, but we can make so much bigger of an impact as we start to serve people all over the nation.”  

To get involved, there are two actions consumers can take. First, they can visit the Climate First Bank website or connect on social media. Second, consumers in the process of getting home solar can request that their solar installer allow them to finance their loan with OneEthos powered by Climate First Bank. The more people finance with OneEthos, the greater the impact we can have. OneEthos continues its purpose of helping to bring renewable energy to homes across the country.