November 2006 Rebate Report: Spotlight on Financing Programs

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The Time is Now

Funding for rebates and incentives continues to rise. In California alone, investor-owned utilities budgeted $2 billion to support energy efficiency initiatives from 2006 through 2008. Significant funding increases can be found in many other states as well, especially where utility rates have risen sharply or where growing electricity demand has strained the transmission and distribution infrastructure. But cash incentives are certainly not the only path to making energy projects more affordable.

In most areas of the country, utilities, governments, or other agencies offer financial assistance in the form of loans. In markets where rebates or other incentives are not available, a loan program especially one that features belowmarket interest rates—may be just what a capital-constrained organization needs to move forward with an energy-saving project.

The cost of delaying an upgrade increases as energy prices rise. If an organization were eligible for one of these loans, and the monthly debt service would be less than the project’s energy cost savings, this funding approach should be given serious consideration. e&pm

Spotlight on Energy-Efficiency Financing Programs

Visit our Rebate Report page for archived Rebate Reports, featuring direct links to incentives, program details, rebate applications, and more.

TEXAS STATE ENERGY CONSERVATION OFFICE (SECO)—Texas LoanSTAR (Loans to Save Taxes And Resources) Revolving Loan Program

ELIGIBLE APPLICANTS: All public entities, including state, public school, college, university, and non-profit hospital facilities.

ELIGIBLE PROJECTS: Measures include, but are not limited to HVAC, lighting, and insulation. Funds can be used for retrofitting existing equipment or, in the case of new construction, to finance the difference between standard and high efficiency equipment. The LoanSTAR Program funds “Design, Bid, Built” or “Design, Built” projects. All projects are approved based on the Detailed Energy Assessment Report.

LOAN TERMS: Recent loans have ranged from $8,000 to $4.7 million. Current interest rates are 3% APR. Loans are repaid through energy cost savings. Projects must have an average payback of 10 years or less.

FOR FURTHER INFORMATION: Contact Theresa Sifuentes at theresa.sifuentes@cpa.state.tx.us, (512) 463-1896 or (800) 531-5441, ext 31896. http://seco.cpa.state.tx.us/ls.htm

LOS ANGELES DEPARTMENT OF WATER AND POWER AND STATE ASSISTANCE FUND FOR ENTERPRISE, BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATION (SAFE-BIDCO) — EFFICIENCY WISE: Low-interest energy efficiency loan for small and medium-sized businesses

ELIGIBLE APPLICANTS: CA small businesses of net worth below $6 million and average net income below $2 million.

ELIGIBLE PROJECTS: Measures that conserve, produce, or control energy use in new or existing facilities. Examples include lighting, weatherization, cogeneration, management systems, HVAC, refrigeration, process improvements, and alternate energy systems.

LOAN TERMS: 5.4% fixed interest rate; up to 5 year payback period; up to $2000,000 may be financed or 10 times the amount of estimated annual savings, whichever is less. Project must conserve energy equal to 15% of normal usage or manage load. Collateral required.

FOR FURTHER INFORMATION: Contact LADWP at (800) 473-3652 for an energy analysis. Then contact SAFE-BIDCO for an application package at (800) 273-8637 or safe-bidco@pacbell.net or www.ladwp.com/ladwp/cms/ladwp001440.jsp

CONNECTICUT LIGHT & POWER—Small Industrial and Commercial Energy Efficiency Loan Program

ELIGIBLE APPLICANTS: CL&P customers in business for a minimum of three years with an average demand of 350 kilowatts (kW) or less over the past 12 months. Industrial customers must have 100 employees or fewer (combined for all customer locations in CL&P territory).

ELIGIBLE PROJECTS: Replacement of existing electrical equipment with high-efficiency electrical equipment. Loans are not available for projects that qualify for either the Energy Conscious Blueprint or the Small Business Energy Advantage programs.

LOAN TERMS: Interest-free loan offered to CL&P customers who are small Industrial manufacturers or commercial customers. $5,000 minimum loan to $100,000 maximum loan. Maximum loan payback period is six years (based on simple payback period).

FOR FURTHER INFORMATION: Call (877) WISE-USE www.cl-p.com/clmbus/target/financing.asp

THE IDAHO DEPARTMENT OF WATER RESOURCES, ENERGY DIVISION—Low Interest Energy Loan

ELIGIBLE APPLICANTS: Commercial, schools, local government, state government, agricultural, institutional, hospitals

ELIGIBLE PROJECTS: Financial assistance is provided for projects that result in the conservation of energy and/or utilization of renewable resources within the state of Idaho. Loans are available for retrofit only, with the exception of some renewable resources.

LOAN TERMS: 4% interest, 5-year loan repayment. Commercial loans: $1,000 to $100,000; agricultural loans: up to $100,000; renewable loans: $1,000 to $100,000; schools, hospitals and health care facilities: $1,000 to $100,000.

FOR FURTHER INFORMATION: (208) 287-4800, energyspecialist@idwr.idaho.gov or terry.hoebelheinrich@idwr.idaho.gov www.idwr.idaho.gov/energy/loans/default.htm

OTTER TAIL POWER COMPANY— Dollar Smart Financing Program

ELIGIBLE APPLICANTS: Nonseasonal Minnesota customers may participate in the 2.9% energy-efficiency plan. Customers in North or South Dakota may choose the 7.9% Competitive Rate Plan, closely tied to the prime interest rate.

ELIGIBLE PROJECTS: MN —commercial lighting and refrigeration; air-source and geothermal heat pumps; process improvement systems; milk house precoolers and stock waterers; heat-recovery systems; and motor and variable speed drives. North and South Dakota — All MN measures plus: electric heating applications; dual fuel systems; electric cooling applications; new electric water heaters, and more.

LOAN TERMS: Maximum business loan is $25,000 under the Competitive Rate Plan and $100,000 for eligible CIP projects under the Energy Efficiency Plan. Loans may not exceed 80% of project total cost. Repayment terms vary from a minimum of 12 months to a maximum of 60 months for loans of $5,000 or more.

FOR FURTHER INFORMATION: Use the “contact us” website https://www.otpco.com/asp/ContactUs.asp or call (800) 257-4044. www.otpco.com/ProductsServices/ Financing.asp

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