How to Find Loan Programs That Support Energy Efficiency and Renewable Energy

Posted on January 4th, 2011 by
   

According to Southface Energy Institute staff, energy efficiency improvements can save your business up to 35 percent of electricity costs. Atlanta-based Southface, a promoter of energy efficiency since 1978, reports that the highest savings are realized by combining retrofits and technologies such as energy management systems or alternative energy. Cold region businesses or high electricity users are often pleasantly surprised at how much can be saved with a relatively small investment. For example, Nature’s Own Herb Shop in Hapeville, GA, invested $1,000 and expects to save over $2,500 per year.

Despite these significant savings and boost to the bottom line, many businesses just don’t have the excess cash right now to make capital investments. Fortunately, there is a wealth of state and local programs available to fund energy efficiency projects through loans, rebates, and grants.  Some programs offer low cost or free audits, which will help you identify the most effective improvements and calculate the payback period. The payback period is how quickly energy savings will equal your capital investment, including the cost of financing.

The first site to check is DSIRE, which provides links to programs by state via a map. Clicking on New York, for example, links are available for corporate tax credits, state rebate and grant programs, utility rebate programs, tax incentives, and PACE financing. The corporate credit allows up to $2,000,000 per building using solar, photovoltaics, fuel cells and daylighting. State grants are available for grid-independent buildings that can supply excess to the system. Rebates are available for a range of projects from lighting retrofits to green construction to improved process efficiency. Programs vary greatly by state and DSIRE is a great place to get an overview of what is available in your location.

Many government-funded loan programs designed to finance small businesses are turning their focus to energy efficiency and green business. While there isn’t a directory of nonprofit and state sponsored green loan programs, you can find sources through federal government website directories. The first is the Economic Development Administration website, which links to state economic development agencies. Your local agency will have information on loan programs. Another source is the Environmental Protection Agency’s list of state environmental agencies. Some environmental agencies offer low interest loans to businesses or have links to loan programs. Also check the Small Business Administration’s micro-loan program. Micro-loans go up to $50,000, which is plenty for most small business energy projects. Your SBA state office can guide you to the organizations offering micro-loans in your region. And finally, another source for alternative financing is the Association of Enterprise Opportunity site, where you can locate nonprofit-run loan programs in your area. These programs fund business improvements, including energy efficiency.

Don’t wait to look into these programs. Many, especially rebates and tax credits, have expiration dates. Remember, the right energy efficiency improvements will save you money immediately–cash you can use for marketing, hiring or business expansion.

Written by Elizabeth Penney, Georgia Green Loans

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