State Supported Clean Energy Loan Programs

New York Energy $mart Loan Fund

With about 30 financial institutions participating across the state, this program helps buy down the loan interest rate.  The loan terms are settled between the lender and borrower while the state (NYSERDA) buys down the loan interest rate for a maximum of five years.  Energy efficiency and renewable energy projects are eligible for the program

NYSERDA no longer funds the interest rate reductions by foregoing an interest portion on certificates of deposit purchased from each lender because it tied up large amounts of capital for up to 5 years. NYSERDA now simply pays a lump sum equal to the interest rate reduction, and distributes its other capital elsewhere.

Ohio Energy Efficiency Revolving Loan Fund

The Ohio Department of Development (ODOD) Office of Energy Efficiency offers low-interest loans to clean energy projects by partnering with private lending institutions. It offers reduced interest rates on loans through linked deposits and participation loans.  The ODOD buys down the interest rate by as much as 50% on amounts up to $25,000 for residential customers and $500,000 for non-residential customers.

The banks have been slow to join this effort because of the low interest rate. This demonstrates the obstacle that often comes with public-private partnerships; they rely on the willingness of the private industry to participate.

For more examples of state-supported loan programs: Mark Bolinger and Kevin Porter, Berkeley Lab and the Clean Energy Group, September 2002