Dive Brief:
- The U.S. Department of Energy on Thursday announced six awards totaling roughly $45 million to facilitate access to capital for funding energy efficiency projects, including audits, upgrades and retrofits.
- The awards would be administered to Washington D.C. and five U.S. states through the Energy Efficiency Revolving Loan Fund Capitalization Grant program, which enables states and territories to provide loans and grants that can help businesses and families save money and cut their energy costs, the department said in a news release Thursday.
- U.S. Energy Secretary Jennifer Granholm pointed to access to capital as one of the biggest hurdles facing many states looking to bring clean energy to businesses and homeowners. “The Revolving Loan Fund Program expands access to low-cost financing for energy efficiency improvements, allowing states to build an evergreen source of funds to offer their residents and businesses for clean energy projects,” Granholm said in a statement.
Dive Insight:
Energy efficiency financing is a proven approach to ramp up the adoption of clean energy, the DOE said in the release, citing a 2022 study it produced in concert with Lawrence Berkeley National Laboratory and the State and Local Energy Efficiency Action Network. Based on performance data from previous energy financing programs, each dollar the federal government invests in a revolving loan fund can draw over $20 in private capital, helping kickstart local businesses and combat climate change, the DOE said Thursday.
The five states chosen to collectively receive $45 million through this program are Illinois, Indiana, Pennsylvania, Tennessee and Vermont, the DOE said in the release.
Through the funding, Illinois will create a new revolving loan fund that commercial building owners can tap to maximize energy savings and advance climate goals, while Indiana will engage in co-lending with private lenders to provide financing opportunities in the commercial and residential sectors, per the release.
Pennsylvania, Tennessee and Vermont aim to channel the funds toward helping public and government buildings access capital for upgrades and renewable energy projects. All three states will deploy the Revolving Loan Funds alongside Energy Efficiency and Conservation Block Grant funds, which are designed to help states, local government and tribal territories implement strategies to reduce energy use, cut fossil fuel emissions and boost energy efficiency.
Pennsylvania will establish a new revolving loan fund for municipalities to support energy efficiency upgrades and on-site energy generation projects, especially disadvantaged communities, while Tennessee plans to help local government buildings meet goals for efficient, clean, affordable and resilient buildings. Tennessee will also provide a grant opportunity that can help small businesses.
Vermont will establish a new revolving loan fund that can help public buildings support energy resilience and conservation retrofits to existing municipal infrastructure.
Washington, D.C. will create a new revolving loan fund aimed at supporting owners and developers of affordable housing in their efforts to boost their energy efficiency and sustainability efforts.
Thursday’s announcement represents the first round of awards, with the DOE saying it expects to announce additional awards later this year. The Revolving Loan Fund program, funded by the bipartisan infrastructure law, will provide awardees $242 million in total, with 40% of the funds allocated to all states, territories and Washington, D.C. and 60% of the funds reserved for priority states as defined by the bipartisan infrastructure law, the federal agency said.
