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March 12, 2012

Low Interest Loans for Energy Projects Available from the CEC!

CaliforniaEnergy Commission (CED) Low Interest Energy Conservation Assistance Act Program Loans

ECAA Low Interest Loans for School Energy Efficiency and Generation Projects

The CEC has announced a new round of low interest Energy Conservation Assistance Act (ECAA) Program Loans available on a first come first served basis to public schools and other local public entities.  The program has been well-used since its establishment in 1979, and more than $263 million has been allocated under the ECAA program to more than 760 recipients (as of June 2011).

A school may apply for up to$3 million per project, at a low interest rate of 3%.  The loans are available on a first come, first-served basis and we highly encourage you to explore this option if you are considering an energy efficiency and/or renewable project for your campus - and SEC stands ready to help. 

What kind of projects are eligible?

Examples of projects include: Lighting systems, Pumps and motors, Streetlights and LED traffic signals, Automated energy management systems/controls, Building insulation, Energy generation including renewable and combined heat and power projects, Heating and air conditioning modifications, Waste water treatment equipment.

Loans for energy projects must be repaid from energy cost savings within 15 years, including principal and interest (approximately 11 years simple payback). Simple payback is calculated by dividing the dollar amount of the loan by the anticipated annual energy cost savings.  A promissory note and a loan agreement between you and the Energy Commission are all that is required to secure the loan.

How will the funds be disbursed?

The funds are available on a reimbursement basis. For each reimbursement request, receipts and invoices for incurred expenses must be submitted along with proof of payment.

The final 10 percent of the funds will be retained until the project is completed. Interest is charged on the unpaid principal balance of the loan computed from the date of each disbursement to the borrower.

Repayment Terms

The repayment schedule is based on the estimated annual projected energy cost savings from the aggregated project(s), using energy costs and operating schedules at the time of loan approval. Loans will be amortized on the estimated annual energy cost savings achieved by the loan-funded project. Applicants will be billed twice a year, in June and December, after the projects are completed.

Loans must be repaid from energy cost savings or other legally available funds within a maximum term of 15 years, including principal and interest.

For More Information:

Please let us know if you are interested in applying for an ECAA loan and call me with any questions you may have regarding this program.