|Incentive Type:||State Loan Program|
|Eligible Efficiency Technologies:||Clothes Washers/Dryers, Dishwasher, Refrigerators, Dehumidifiers, Ceiling Fan, Water Heaters, Lighting, Lighting Controls/Sensors, Chillers, Furnaces, Boilers, Heat pumps, Central Air conditioners, CHP/Cogeneration, Energy Mgmt. Systems/Building Controls, Comprehensive Measures/Whole Building, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Fuel Cells, Geothermal Heat Pumps, Municipal Solid Waste, Daylighting, Anaerobic Digestion, Small Hydroelectric, Renewable Fuels, Fuel Cells using Renewable Fuels|
|Terms:||Fixed-rate loan (1-5% depending on project type) to be repaid within 10 years; loans may be amortized over the life of the equipment, not to exceed 25 years, except 10 years for energy efficiency or conservation projects.|
|Incentive Amount:||Varies by project, but program generally requires matching funds at least equivalent to DCED funding|
Note: It is important to note that some applicants are only eligible to apply under some aspects of the program. Political subdivisions are only permitted to apply for loans or grants for Clean Energy Projects. Businesses and non-profits may apply for loans for Alternative Energy Production Projects and Clean Energy Projects, but may only apply for grants for Alternative Energy Production Projects and for site preparation for an alternative energy system as a Clean Energy Project.
In July 2008, Pennsylvania enacted a broad $650 million alternative energy bill designed to provide support for a variety of renewable energy and energy efficiency technologies. Included in this legislation was a provision authorizing the creation of a grant and loan program for alternative energy and clean energy production projects. The program is jointly administered by the Department of Community and Economic Development (DCED) and the Department of Environmental Protection (DEP), under the direction of Commonwealth Finance Authority (CFA). The most recent Program Guidelines were issued in January 2013. Incentives are available to businesses (including non-profits), economic development organizations, and political subdivisions (e.g., local governments, schools, etc.).
The program will offer support for alternative energy and clean energy projects in the form of loans, grants and loan guarantees (i.e., grants to be used in the event of a financing default). Under this program, alternative energy production projects and clean energy production projects are governed by distinct sets of definitions and rules. Eligible activities for each type of project are described briefly below (see program rules for more detailed descriptions).
Clean Energy Projects
Alternative Energy Production Projects (construction or development of):
Both types of project allow eligible costs associated with the preparation of plans, specifications, studies, and surveys, necessary or incidental to facilitating or developing an eligible project, and costs (up to 3%) associated with administering a grant. The individual support mechanisms are described in more detail below. For all types of support, there is a general requirement that applicants provide matching funds equivalent to the funding offered under the program (i.e., incentives generally limited to 50% of costs).
Loans are available at a fixed interest rate which varies based on project type. Loans may generally be amortized over a period corresponding to the life of the equipment, not to exceed 25 years, and must be repaid within 10 years. Loans for energy efficiency and energy conservation projects (including geothermal systems) have a 10-year amortization. Loans for manufacturing facilities are limited to $40,000 per job created within three years of loan approval. Failure to create the requisite number of jobs within three years may cause the interest rate to be raised by 3% over the remaining portion of the loan. Loans are also generally limited to $5 million, although higher amounts may be authorized on a case-by-case basis as determined by the DCED.
Grants for manufacturing facilities are available for up to $10,000 per job created within three years of grant approval. Grants are limited to $2 million for other alternative energy, clean energy projects, and high performance building projects; $500,000 for energy savings contracts (ESCOs); and $175,000 for planning and feasibility studies. Grants for green building projects are also limited to 10% of costs (as opposed to the general limit of 50% of costs for other projects).
Loan guarantees will take the form of a grant that may be used in the event of financing default on the part of the applicant. Loan guarantees are limited to 75% of the deficiency up to $5 million. The term of the grant may not exceed five years.
Special Session H.B. 1 authorized a total of $165 million for this program. Visit the program web site and review the funding guidelines for additional program details and application procedures.
*While solar energy is in fact eligible under the state AEPS, a specific solar energy program was also authorized as part of the enabling legislation and as a result solar energy projects have been excluded from some other programs created by the same legislation. The program guidelines do not list solar energy as an eligible technology. However, it appears that some solar technologies could qualify if they are incorporated into the broader design of a High Performance Building.