Renewable Energy-Related Legislation and Loan programs in Pennsylvania
In July 2008, $80 million was sanctioned for loan and grant program in Pennsylvania for solar energy technologies. The funding came from the $650 million alternative energy bill which is supervised by the Department of Environmental Protection (DEP) and the Department of Community and Economic Development (DCED) under the direction of Commonwealth Finance Authority (CFA). Various business sectors are eligible to apply for this loan program like – profit or non-profit organizations, schools, local governments, economic development organizations etc. according to Special Session H.B. 1 of THE GENERAL ASSEMBLY OF PENNSYLVANIA all the facilities that utilize waste coal, alternative Biomass, Solar Energy, Wind Energy, Geothermal Energy etc come under “ALTERNATIVE ENERGY PRODUCTION PROJECT”. All the systems that use renewable energy sources as their source of energy or installs equipment to facilitate or improve energy conservation or energy efficiency including heating and cooling equipment and solar thermal equipment can be granted loan for development. The applicable system must have a lifetime of at least 4 years. The fund can be granted for various parts of the whole project like – Infrastructure development and land acquisition for necessary project construction, preparation of the land for the project, renovation of the infrastructure to facilitate the ongoing project, purchase of the necessary equipments for solar systems, permit fees and also the administrative costs of the project. The applicant must provide proof for availability of matching funding equal to the granted amount. Moreover for Solar thermal system, there is one more requirement for the SRCC-100 rating or other comparable rating from DEP. All the systems must be bought and installed new and UL-listed.
The funding can be availed in different flavors. As of April 2009, Loans can be secured with an interest of 5% and repayment tenure of 10 years for equipment and 15 years for real estate. Various manufacturing facilities can avail an amount up to $35,000 through this loan and for various energy production projects it is capped at $5 million. But, all loan applications will be evaluated by the authorities on a case by case basis. On another hand, funding can also be availed through Grants. Manufacturing facilities can get an amount up to $5,000 through these grant schemes whereas, various energy production facilities can avail up to %1 million. Various R&D projects or studies on Renewable Energy System are also eligible for a grant of 50% of the cost or $175,000 whichever is lesser. Generally CFA considers various projects eligible for grants where the contract is for less than 10 years rather than loans. The applicant must produce Solar Renewable Energy Certificates (SRECs) during the process to be considered eligible for the loan or grant. Not only this, loan guarantees are also available under this program. This funding can be used in case of financing default on the applicant’s part. An amount equivalent to 75% of the deficiency can be availed through this program. The maximum amount allocated for loan guarantees is $30 million and the repayment tenure is kept at 5 years for all applicants.
The Metropolitan Edison Company Sustainable Energy Fund was sanctioned in the year of 2000 by First Energy and an amount of $5.7 million was made available for immediate grants. Later due to the merger between GPU Energy and First Energy an additional amount of #2.5 million was added to this program. Though under this Local Grant program no eligible efficiency technologies have been specified, but various eligible Renewable/other technologies are – Solar Water Heater, Solar Thermal Electric, passive solar space heat, solar space heat, solar thermal process heat, Photovoltaic, Biomass, Fuel cells etc. the maximum amount that can be granted under this program is capped at $25,000 and the actual amount will greatly depend on the project. The fund can be used for various purposes like – development of renewable energy technologies, energy conservation, sustainable energy efficiency, improvements of environment in the Company’s territory.
First Energy also establishes the Penelec Sustainable Energy Fund in 2000 under which an amount of $9.1 million was sanctioned for local loans and grants. The entire fund is administered by the Community Foundation for Alleghenies in Johnstown, Pennsylvania. Two third of the fund is made available venture capital and business lending and one third for environmental grant making. The fund is sanctioned mainly to facilitate the development of renewable energy technologies and sustainable energy business.
Central Eastern Pennsylvania has also sanctioned Sustainable Energy Fund (SEF) for a limited number of loans and grants in the PPL Territory. Eligible sectors are industrial, commercial, local government and non-profit etc. the amount which can be sanctioned will greatly depend on the project. The fund has been released with the following purposes – financing sound energy solutions for businesses, manufacturing facilities, teacher training under CFL Energy education etc. the SEF was a direct consequence of the merger of PPL Inc. and the PUC. An amount, greater than $25 million was made available under this program.
Sustainable Development Fund Financing Program was established by the Pennsylvania Public Utility Commission in the final order of the PECO. This program is administered by the Reinvestment Fund, Inc. (TRF). After the PECO Unicom/Energy merger SDF had additional funding later. Currently, the total amount of funding available is $31.8 million. Various energy efficiency technologies like Heat pumps, Lighting, Air Conditioners etc are eligible to apply for and other eligible renewable technologies are photovoltaic, solar space heat, solar thermal processes, geothermal heat pumps etc. the fund can be availed in the form of subordinated debt, commercial loans, equity financing and royalty financing.
To facilitate the use of renewable energy and clean energy in West Penn Market, the West Penn Power Sustainable Energy Fund (WPPSEF) has been established. Solar system manufacturers, distributors and service companies can avail commercial loans under this program. Under WPPSEF a loan can be availed hat is not bankable but acceptable to all credit risks. And moreover this loan will be offered at an interest below the rate available in market. According to 72 P.S enacted in 29th November 2006, wind turbines and all related equipment are exempt of tax assessors. The equity evaluation of the property is done by the capitalized value of land-lease agreements.
According to 24 P.S. enacted in 13th July 2005, all new schools must be built efficiently under the Governor’s Green Government Council of Pennsylvania. Under this program a part of the soft costs of designing a green building will be provided. The amount that will be granted is capped at $25,000. The funding will cover modeling costs, consultancy fees and documentation costs for LEED-NC certification. An amount equivalent to 10% o the total costs of the building or renovation can be availed under this incentive.
The Pennsylvania Energy Development Authority (PEDA) provides various periodical financial incentives to energy projects in the field of solar thermal electric, photovoltaic, renewable transportation fuels, fuel cells, geothermal heat pumps, coal mine methane etc. In the year of 2009 $21 million was solicited under this incentive program. Normally the maximum amount which can be sanctioned to each project is capped at $1.5 million. All the applicants are required to produce some documented cost share or matching funds.
To preserve land quality, reduce air pollution and provide opportunities for the agricultural community, the Pennsylvania Department of Agriculture and the Pennsylvania Department of Environmental Protection (DEP) started the Pennsylvania Energy Harvest program in 2003. Under this program financial incentives can be availed for various projects which make use of renewable energy technologies. Till 2007, $26 million was awarded under this program as financial incentives. Projects which do not concern environmental or energy concerns are not eligible to apply for.
Homeowners in Pennsylvania are eligible to get financial incentives under the Keystone HELP Energy Efficiency Loan & Rebate Program which will help them the energy efficiencies in their houses. This program is administered by the Pennsylvania Treasury Department, the Pennsylvania Housing Finance Agency and the AFC First Financial Corporation. To become eligible homeowner must have an annual income of less than $150,000 and they can apply for only one loan every fiscal year. Various types of secured and unsecured loans like Energy Star Loans, Advanced Performance Energy Star Loans, Renovate and Repair Energy Star Loans, Whole House Improvement Loans etc are available under this program.
Under Small Business Pollution Prevention Assistance Account Loan Program various small businesses in Pennsylvania having 100 or less full time employees are eligible to avail low interest loans for projects implementing renewable energy technologies. This program started in 1999. And it has sanctioned loans for more than $9.3 million.
Adams Electric Cooperative started offering financial incentives to its residential customers under the Energy Resource Conservation (ERC) and Supplemental Loan Program. An amount up to $25,000 can be borrowed under this program. Fund will be sanctioned based on the credit status of the applicant.
PA Home Energy (West Penn Power) – Home Efficiency Incentives
To let Pennsylvania consumers reduce home energy use the West Penn Power Sustainable Energy Fund (WPPSEF) has started the Pennsylvania Home Energy program and only customers of West Penn Power (Allegheny Energy) are eligible to apply for this program. It is expected to expand the scope of this program. Normally incentives are available under two programs – Energy Star Homes program and Home Performance with Energy Star program. An amount in the range of $200 to $1000 can be availed through this program. New homes certified by the Home Energy Rating System (HERS) index are eligible to avail increased incentives.
Pennsylvania Sunshine Solar Rebate Program
Under this rebate program all Pennsylvania residents using Photovoltaic and Solar systems are eligible to avail funding. This program started in May 2009 under the Pennsylvania Department of Environmental Protection (DEP). A total amount of $100 million is available under this program. The system must be installed in the applicant’s home and it must be his primary residence in Pennsylvania. No repairing cost will be supported under this program.