Gov. Peter Shumlin, key legislative leadership, the CEO of the Vermont Economic Development Authority, and private partners today outlined a proposal to support and expand business and commercial clean energy projects across the state. Through partnership between VEDA, the Clean Energy Development Fund (CEDF), Efficiency Vermont (EVT) and others, the Vermont Clean Energy Loan Fund (VCELF) would consolidate existing state energy loan programs and increase private capital, working with Vermont’s banking community to expand these projects and grow jobs in Vermont communities.
“For commercial projects, this growing market is increasingly less dependent on public subsidies and looking for cost-effective private capital,” said Jo Bradley, CEO of VEDA. “I’m pleased that VEDA can play a key role in providing low-cost, low-risk financing to increase confidence and participation in the clean energy industry by private sector financiers in the state.”
“Investments in energy efficiency save Vermonters money,” said House Speaker Shap Smith. “We need to deploy capital to ensure that these measures happen. VEDA has a long history of supporting investments that benefit the state. This partnership will continue that trend.”
Programs that will be part of the VCELF:
Energy Efficiency Loan Guarantee Program
VEDA is developing this new program in conjunction with Vermont banks, Efficiency Vermont, the Clean Energy Development Fund (CEDF), and other supportive partners including the Lake Champlain Chamber of Commerce, Vermont Bankers Association, Energy Action Now and private lenders. Banks may make loans for energy efficiency. The enrolled loans would be 75 percent guaranteed by a cash reserve from EVT, VEDA, and CEDF. Modeling indicates the capacity to guarantee approximately $10 million in loans via the program. VEDA will continue to work with EVT to evaluate cost-effectiveness of these projects.
Small Business Conservation Loan Program
VEDA will move this portfolio currently containing 45 loans totaling $3.24 million into the new fund. This program offers loans of up to $150,000 for all types of energy conservation measures and is operated in conjunction with Efficiency Vermont (EVT) to certify that projects are cost effective.
Renewable Energy Loan Program
VEDA has already made loans totaling $4.9 million for renewable energy projects. They include hydropower, solar photovoltaic and wind projects, which will be moved into the Cleen Energy Loan Fund. Any new renewable energy loans will also be made from the fund. The CEDF may direct some of its monies to this fund. For loans using CEDF funds, the approval process will incorporate CEDF’s energy analysis of the proposed projects. Individual loans up to $1.5 million made be made in the program. VEDA will expect to partner with banks in this program, much like the current Direct Loan Program.
Agricultural Energy Loan Program
VEDA has financed several agricultural digester projects on Vermont farms. VEDA would move these into the Green Energy Loan Fund and make any new agricultural energy loans through the fund. VEDA often finances these projects in partnership with Yankee Farm Credit, Farm Service Agency (FSA) and USDA Rural Development (RD) and/or CEDF. That practice would continue. The CEDF may direct some of its monies to this fund. For loans using CEDF funds, the approval process will incorporate CEDF’s energy analysis of the proposed projects.
Bradley noted that VEDA currently acts as the loan underwriter and administrator for the CEDF. The CEDF will continue to provide grants, energy analysis of proposed loan-funded projects, and targeted incentives for clean energy development in the state. The CEDF may transfer funds to VEDA for lending or for credit enhancement of clean energy projects. Any such CEDF monies would be transferred to the VCEL Fund.
Under the proposal, which is consistent with the recently-released strategic plan of the CEDF that called for greater coordination and partnership between public and private entities regarding energy financing, the VEDA board would be expanded to include three additional members with energy-related experience.
Bradley cited a recent report by the Brookings-Rockefeller Project on State and Metropolitan Innovation that found that the nation and states must find new ways to provide the financial support to shift the nation’s economy toward a low-carbon future. She said VEDA’s newly proposed clean energy loan fund would help meet this need.
Several other states have already launched clean energy business loan programs, including New York and Connecticut. The Shumlin administration is working with other statewide entities to address the residential market for improvements, as well.