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State clean energy policies analysis: state, utility, and municipal loan programs

This report is a continued and collaborative effort with the US Department of Energy‘s Office of Energy Efficiency and Renewable Energy (DOE-EERE) to analyze the environmental, economic, and energy security impacts of state clean energy policies. This analysis uses a uniform methodology to look at the benefits of clean energy policies.

The intent of this project is to assist policy makers and implementers in determining which policies will have the most beneficial impacts. Although this report is focused on state policy, this analysis and framework is a good resource in informing decision making and policy development in many sectors.

The report’s analysis suggests that achieving significant clean energy policy impacts will likely require accessible financing as one element in a comprehensive policy approach. At the same time, loan programs put in place independently can increase their incremental impact by implementing lessons learned through this research. Lessons include:

  • Standardize access: Loans with clear eligibility requirements and streamlined processing will encourage accessible financing.
  • Reduce consumer-transaction costs: Many consumers are unaware of clean energy opportunities. By simplifying the process of identifying and implementing viable clean energy improvements, loan programs can reduce consumer education barriers.
  • Increase loan security: Secure loans are critical in attracting investor capital, reducing interest rates, and improving lending terms.
  • Develop technology-specific terms: Loan terms designed with specific technology improvements in mind can reduce loan payments to levels that allow customer cost savings in traditional energy expenditures to offset regular loan payments.
  • Minimize administrative costs: Administrative costs reduce the flow of capital to consumers. Increasing volume by aggregating local programs to the state level can disperse fixed administrative costs among a broader consumer pool. Subcontracting specialty work such as underwriting or energy audits can streamline program administration.
  • Provide provisions for growth: Demand for clean energy financing sometimes exceeds existing program budgets. Moreover, demand could expand rapidly as technology price thresholds are achieved and consumers become more informed. Programs that are prepared to handle growth in demand for clean energy financing will be better positioned to support widespread deployment. 

Read State clean energy policies analysis: state, utility, and municipal loan programs.