Biden Administration Announces $45 Million to Fund Loans for Energy Efficiency Programs

The U.S. Energy Department on June 6 announced $45 million from the Energy Efficiency Revolving Loan Fund Capitalization Grant, or RLF, program to five states and the District of Columbia. The program, supported by the 2021 Infrastructure Investment and Jobs Act, offers funds that allow states and territories to make available loans and subsidies to residents for energy efficiency audits, installations and energy related enhancements.

The RLF program provides states with access to capital in order for them to fund energy efficiency projects and will fundamentally allow households and businesses across the states to save money and lower their energy expenditures. Moreover, the program combined with other U.S. Energy Department initiatives will help communities benefit from the clean energy economy and reinforce the Biden administration’s climate goal of lowering carbon emission by 50 to 52 percent by 2030 and ultimately becoming carbon neutral by 2050.

The RLF program increases accessibility to cheaper financing for energy efficiency enhancements and allows states to offer their inhabitants funding for clean energy projects. There is evidence to suggest that energy efficiency funding is a proven approach to accelerating the adoption of clean energy. Performance statistics from previous effective energy financing programs show that each dollar that the states invest in a revolving loan fund can lead to more than $20 in private capital. This highlights the importance of federal financing in jump starting certain energy initiatives.

The RLF program will benefit Illinois, Indiana, Pennsylvania, Tennessee, Vermont and the District of Columbia. Illinois will create a new revolving fund program for commercial building holders that will concentrate on enhancing energy saving and progressing climate and energy goals. Indiana will establish a RLF to offer financing opportunities in the commercial and residential sectors, via co-lending with private investors. Pennsylvania will create a new RLF targeting underprivileged communities so that they can support energy efficiency upgrades and on-site energy generation projects. Tennessee will establish a new RLF for government buildings so that they can become more efficient, clean, affordable and resilient. Moreover, the state will offer a grant opportunity to both homeowners and small businesses. Vermont will create a new RLF for public buildings. The District of Columbia will establish a new RLF to help support developers of affordable housing so that they can attain higher standards of energy efficiency and sustainability.