Sometimes energy efficiency and renewable energy projects are about creating cutting edge technologies. In other cases the focus is instead on breaking down financial barriers that would otherwise prevent people from making cost-effective use of clean energy technologies. Energy revolving loan funds are one way to jumpstart the use of these technologies.
An energy revolving loan fund can be an attractive option for financial assistance awards. In a revolving loan fund, loans are awarded for an initial round of eligible projects, then energy savings from those projects go toward repayment of the loan. The repayment replenishes the fund, allowing for another round of energy efficiency loans for eligible projects. The energy savings from those loans will follow the same cycle as the first round and so on. In this way, the revolving loan fund can create continual upgrades within a jurisdiction with only one initial investment.
Officials in one western U.S. state realized that with a revolving loan fund, they could extend their State Energy Program funding far beyond its three-year life. This would allow them to upgrade more of their buildings and use taxpayer dollars more effectively. They decided to take advantage of this opportunity to set up a revolving loan fund with guidance from the EERE team.
Once initial capital was set up to start the process, the fund became self-sustaining. This means not only will the state gradually become more and more energy efficient, but it will also continually generate jobs. The steady stream of energy efficient retrofits and upgrades, energy audits, and other related projects will help keep local contractors in business.
This state has already begun funding a diverse array of projects with its initial round of loans. Buildings ranging from small office buildings to large state facilities have been enrolled in the program along with infrastructure projects such as traffic light upgrades. Thanks to the guidance and direction of members of the EERE team, this state is making the most of their Recovery Act funding while saving energy, saving money and creating jobs.