Vermont Gov. Peter Shumlin, state lawmakers, the Vermont Economic Development Authority (VEDA) and private partners have outlined a proposal designed to support and expand clean energy projects across the state.
Under the proposal, the state would establish the Vermont Clean Energy Loan Fund (VCELF), which would consolidate existing state energy loan programs and increase private capital to encourage the development of clean energy projects. The program would be similar to the ‘green banks’ already launched in Connecticut and New York.
VCELF will comprise the following programs:
Renewable Energy Loan Program. Any new renewable energy loans for wind, solar and hydropower projects will be moved into the Clean Energy Loan 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 of up to $1.5 million will 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 would move agricultural digester projects on Vermont farms into the Green Energy Loan Fund and make any new agricultural energy loans through 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.
Energy Efficiency Loan Guarantee Program. VEDA is developing this new program in conjunction with Vermont banks, Efficiency Vermont (EVT), the CEDF and other supportive partners in which banks may make loans for energy efficiency. The enrolled loans would be 75% 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 the cost-effectiveness of these projects.
Small Business Conservation Loan Program. VEDA will move this portfolio, which currently contains 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 EVT to certify that projects are cost-effective.
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.
"For commercial projects, this growing market is increasingly less dependent on public subsidies and looking for cost-effective private capital," explains 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."