Solar Seed Fund
A sustainable funding mechanism for solar on Habitat homes
Many models exist for financing solar systems on Habitat homes. Perhaps the biggest challenge is how to make it possible for solar to continue to be installed in perpetuity. One model that attempts to achieve this is the Solar Seed Fund.
A Solar Seed Fund (SSF) is a revolving fund that pays for the upfront cost of installing solar. This model requires a fundraising initiative that aims to raise enough funds to install solar on a predetermined number of homes.
The SSF is designed to regenerate as homeowners pay back the cost of their solar systems. This model is ideal for Habitat affiliates who employ a home financing mechanism that allows them to recoup the costs of building a house at the completion of construction.
How does it work?
- SSF will pay for the entire installation of the solar systems.
- This cost will vary according to system size and availability of a low-cost installer.
- Habitat homeowners will pay back the cost of the system to the affiliate over the term of their mortgage (20-30 years; 0% interest loan rolled into mortgage; $14-20/month payment for a 4kW system, depending on term of mortgage).
- (Alternatively, if the Habitat affiliate utilizes a third party mortgage financier, such as USDA, the cost of the solar can be recouped at the time of closing and directed back into the SSF for future solar installs.)
- Habitat transfers the monthly solar payments (made by the homeowner) back into the SSF, thereby regenerating the fund for future solar installs.
- Ongoing solar installs would be fully funded by the SSF.
- The fundraising goal for the SSF would be determined by how many houses on which the Habitat affiliates intend to install solar. (e.g., 4 houses @ $6K per home x 5 years = $120K)
- Fundraising efforts will focus on developing new and unique sources of funding—in particular, environmentally conscious members of the community.
- Habitat affiliates may opt in to the SSF if there is adequate interest and institutional commitment by the affiliate’s board of directors.
A formula for raising a Solar Seed Fund
- Identify a Seed donor to kick off the campaign. This could be an individual or corporate donor. ($5 to $20K)
- Request a collaboration with a local Rotary club to complete a solar pilot project.
- Partner with a local environmental group (Sierra Club chapter, climate action group, etc.)
- Implement a crowdfunding capital campaign for a period of 6 to 12 months.
- Make appeals to individuals, businesses, civic organizations, and faith communities to support the campaign.
- Carry out a Rotary-funded solar barn raising early in the capital campaign to build community awareness and support.
- Celebrate the completion of the capital campaign with another solar barnraising.