Alabama Launches Fund to Help Businesses Save Energy
December 13, 2010
Alabama launched on November 30 a $60 million revolving loan program that will be a new tool to help Alabama businesses make upgrades that save energy, reduce operating expenses and create work. The AlabamaSAVES (Sustainable and Verifiable Energy Savings) will offer loans from $250,000 to $4 million—with 2% interest— to help existing industrial and commercial businesses finance energy-saving improvements to their facilities. The energy savings generated by the improvements will be greater than loan repayments, meaning extra cash flow to help businesses remain competitive, retain workers and possibly create new jobs. The Alabama Department of Economic and Community Affairs (ADECA) established the program with $25 million in DOE funds from the American Recovery and Reinvestment Act.
In addition, ADECA worked with private lenders and used $12.5 million of the funds to establish a loan-loss reserve and to buy down interest rates. The additional private-lender financing increases the loan pool to $60 million. Projects eligible for loans include upgrades to energy-efficient equipment such as heating and air conditioning systems, windows and doors, electrical systems, water heating systems, energy management systems, lighting, and insulation. Installation of renewable energy systems, such as those powered by biomass or solar energy, also are eligible. Loans can cover up to 90% of the total costs of a project, and borrowers will have up to 10 years to repay. As loans are paid, the fund will be replenished and available to finance future projects. Abundant Power, a firm that partners with states and municipalities to design, administer and finance energy-efficiency and renewable energy programs, is helping ADECA administer AlabamaSAVES. See the ADECA press releasem and the AlabamaSAVES Web site.