Last Thursday, July 3rd, the Department of Energy (DOE) issued its finalized loan guarantee solicitation for renewable energy and energy efficiency projects. DOE made $2.5 billion in loan guarantee authority directly available through the solicitation, but indicated that an expansion of this financing up to $4 billion is possible depending on how much it can stretch an appropriated credit subsidy on applications. This suite of loan guarantees has been a highly sought after item as Secretary Ernest Moniz and other DOE officials have repeatedly stressed the Department’s focus on renewable and energy efficiency research and financing. DOE support for research and investment in these areas can be seen as an extension of the President’s Climate Action Plan, as the Administration strives to cut carbon emissions.
Below is the schedule for loan guarantee application submission deadlines:
- · Issue Date: July 3, 2014
- · First Part I Submission Due Date: October 1, 2014
- · First Part II Submission Due Date: January 14, 2015
- · Last Part I Submission Due Date: December 2, 2015
- · Last Part II Submission Due Date: March 2, 2016
The solicitation has priced out at an initial $50,000 application fee for renewables and efficiency project financing. While proceeding to Part II of the fossil energy loan program will cost an applicant an additional $925,000, this renewable/energy efficiency solicitation has only a $325,000 Part II fee. Projects could pay as little as $100,000 for Part II, depending on whether the amount of financing requested is either more or less than $150 million. The DOE is encouraging, in other words, applicants to request less than $150 million for projects aimed at commercializing renewable energy or energy efficiency technologies.
Potential candidates for the loan guarantee solicitation could include micro-grids, energy storage projects, bio-refineries, and “distributed” energy systems that incorporate storage, demand response and efficiency. The types of projects suitable include those using waste from landfills, forestry and crop waste, improved existing dams, or tapping into unused energy.
In commenting on the recent spate of loan guarantee solicitations – after a long pause caused by the Solyndra default – Secretary Moniz offered some insight into the Department’s thinking in selecting projects for participation: “As we go forward with the loan program, as aggressively as we can this year, across the board, we’ll continue to try to be focused on the early mover deployments with the idea that some of those … will get picked up by the private sector.” Moniz further said: “We don’t have the resources, frankly, or the interest of being the ones that make the entire market.”