January 8, 2016 – Burlington, VT – The Vermont Energy Investment Corporation (VEIC) joined U.S. Secretary of Agriculture Tom Vilsack, U.S. Sen. Patrick Leahy (D-VT), representatives of U.S. Sen. Bernie Sanders (D-VT), representatives of U.S. Rep. Peter Welch (D-VT), and Vermont Gov. Peter Shumlin in announcing the approval of VEIC's application to administer up to $46 million in federal loan funds directed at Vermont homeowners and businesses. The capital will be used to help connect Vermonters with low-cost, flexible term financing to make more renewable and energy efficiency projects possible.
VEIC operates Efficiency Vermont, the statewide, publically regulated energy efficiency utility. With support from the Vermont Congressional Delegation and state agencies including the Vermont Public Service Department, VEIC applied for the USDA Rural Utility Service (RUS) Energy Efficiency and Conservation Loan Program funds and received conditional approval from RUS in the fall of 2015.
"Our history of delivering results and driving innovations through Efficiency Vermont gives VEIC the experience, technical expertise, and partnerships to leverage this loan capital, helping Vermonters access low-cost capital to complete clean energy projects," said Scott Johnstone, Executive Director of VEIC. "We are especially excited by the potential of this program to help more low- and middle-income customers access affordable financing to save money."
Vermont's leadership role in federal program
The USDA Energy Efficiency and Conservation Loan Program (EECLP), launched in 2014 as part of President Barack Obama's climate change initiative, made $250 million in capital available to electric cooperatives and other utilities that provide electric services to rural Americans.
The VEIC application is the largest RUS Energy Efficiency and Conservation Loan Program approved to date, representing 20% of the original national funding pool for the EECLP.
"This loan will reduce barriers to energy investments by lowering the upfront costs, spreading these costs over 20 years, and by making financing more available," Vilsack said. "It also will help residential, commercial, agricultural, and industrial consumers in rural Vermont reduce energy use and meet state and national energy goals."
Why is this different from Vermont's existing financing options?
The capital from RUS is long term and very low interest, so it can be loaned at competitive rates and to more customers, including many who cannot access existing loan products. For example, under today's rates Efficiency Vermont would be able to offer a standard 20-year loan at a fixed interest rate of 4%. In addition, RUS capital is flexible – supporting a large range of projects in energy efficiency and renewable energy for homes, businesses, and communities.
Benefits to Vermont and Vermonters
Through Efficiency Vermont and a wide network of partners, VEIC will loan funds to Vermonters over the course of four years. Business loans will begin in mid-2016, and consumer loans the end of 2016. With attractive rates and terms as long as 20 years, these loans will be structured so that the monthly payments are close to, or in some cases less than, the monthly savings produced by the improvement projects they finance.
Examples of projects that might be financed by this program include:
- Rooftop solar installations
- Residential and commercial energy efficiency improvements
- Conversion from fossil fuel heat to cold climate electric heat pumps, wood pellet systems or efficient wood stoves
- Electric vehicle charging stations.
In addition, a portion of the loans can be used to address health and safety issues that often are a barrier to completing efficiency and renewable projects. For example, some customers may be able to apply loan money to make roof repairs necessary to support a rooftop solar installation.
Timeline and next steps
The program will start once loan documents have been given final approval by RUS and the Public Service Board. This is anticipated to occur during the second and third quarters of 2016.
VEIC, as operator of Efficiency Vermont, will work with Vermont utilities, governmental agencies, weatherization agencies, contractors, and financial institutions to develop offerings for their customers and clients, as well as to identify opportunities to build on existing programs to boost their reach and impact.