Revolving Energy Loan Program

Amount of Funding: $2 million

The Revolving Energy Loan Program has been recently amended and approved by DOE to be a grant program. Guidelines are currently being established. Further information will be posted as application procedures are developed.

Funding will be used for energy efficiency and renewable energy projects in commercial buildings in Arizona and also grants to manufacturers of renewable energy or energy efficiency equipment/technologies. The Arizona Department of Commerce Innovation & Global Business Development Division will administer the yet to be named grant program.

Funding for this program will be consistent with priorities of the U.S. Department of Energy in their program guidance:

• States are encouraged to use their ARRA funding not only to support current energy efficiency and renewable energy projects but also to seed sustainable programs and put in place long-term funding mechanisms such as revolving loans and energy savings performance contracting that will provide lasting benefits and lead to long-term market transformation. (Page 23, DE-FOA-0000052)

• To increase the impact of these stimulus funds, DOE encourages plans which achieve a high degree of leveraging, and/or projects that extend the impact of the funds.   Examples of programs which provide high leverage are revolving loan programs and performance contracting. (Page 28, DE-FOA-0000052)

• States may wish to consider the following program areas for inclusion in their State Plans: programs for financing energy efficiency and renewable energy capital investments and programs which may include loan programs in performance contracting programs for leveraging additional public and private sector funds, in programs which allow rebates, grants, or other incentives for the purchase and installation of eligible energy efficiency and renewable measures in public or nonprofit buildings owned and operated by a state, a political subdivision of the state or agency or instrumentality of the state, or an organization exempt from taxation under 501(c )(3) of the Internal Revenue Code of 1986 including public and private nonprofit schools, hospitals, and local government buildings. (Page 34, DE-FOA-0000052)

Nature of Projects: The Energy Office believes that applicants will be mainly small business owners applying for energy efficiency and solar projects located throughout the state. The cumulative incentives for solar installations that are available for commercial solar projects make great economic sense if the customer has the initial capital investment required. This would provide that large initial capital requirement. We also believe that we will see several applications from small renewable energy companies looking to buy additional equipment or expand to take advantage of ARRA funding that will create increased demand for their products.

Timeline: As this program has been modified to a grant program, the first round of funding opportunities are expected to be announced in early 2010. A second round of funding opportunities may be announced in late 2010.

Long-term Benefits: Energy-saving estimates will not be available until program guidelines have been established.

Job Creation: Energy Office staff estimates, based on DOE formula, this program will create 22 jobs.

Implementation: The Energy Office is working with the Arizona Department of Commerce, Innovation & Global Business Development Division, to administer this program. Administrative and programmatic costs are included in the total project budget proposed above. Staff members who implement or manage the overall strategy or programs are direct costs to the project.