The Public Entity Energy Audit and Renewable Energy Feasibility Study Loan Program

Administered by the Minnesota Department of Commerce, this program offers loans to units of local government or K-12 schools seeking to initiate energy audits or renewable energy feasibility studies primarily through its Local Energy Efficiency Program (LEEP) or Guaranteed Energy Savings Program (GESP).

Application

Public Entity Energy Audit and Renewable Energy Feasibility Study Loan Program Application (.pdf)

Upon completion of the application, submit to Commerce for review and approval.

Eligibility information

The Minnesota Department of Commerce has established a revolving loan fund (RLF) to lend funds to public entities to pay for the cost of an energy audit or a renewable energy feasibility study.

Loan applications will be accepted from public entities on a first-come, first-served basis until all program funds have been allocated. As loans are repaid to Commerce, additional loans may become available
Who is eligible?

Public Entities – includes any agency or institution of the state, a county, a statutory or home rule charter city, a town, a school district, or a special taxing district of the state.
What information is needed to receive a program loan?

Public entities must provide Commerce with one of the following:
- A copy of an executed Guaranteed Energy Savings Program (GESP) Joint Powers Agreement or Interagency Agreement.
- A copy of an executed Local Energy Efficiency Program (LEEP) Joint Powers Agreement.
- An energy audit or feasibility study proposal from a service provider.
What project costs are eligible?

Direct costs of an energy audit or renewable energy feasibility study pursued under Commerce’s GESP or LEEP programs, or as approved by Commerce are eligible.

Loan security requirements

A loan agreement between the public entity and the Minnesota Department of Commerce shall serve as the loan security.

Terms and conditions

Commerce will encumber funds on behalf of public entities seeking to complete an energy audit and/or a renewable energy system feasibility study.
Encumbered funds will be retained by Commerce in a program account until the energy audit or feasibility study report has been presented and accepted by the public entity.
The maximum term of repayment is three (3) years from the date the funds are released to the loan recipient, with an annual interest rate of 2%.

How and when are program funds released?

Funds encumbered by Commerce will be retained in a RLF program account, assigned to the award recipient, until the energy audit or feasibility study report has been presented and accepted by the public entity.
Once an energy audit or feasibility study report has been presented and accepted by the awarded recipient, the encumbered funds will be released in the following manner:

Project(s) Proceeding to Construction

Public entity agrees to pay the service provider for the cost of the completed energy audit or feasibility study with proceeds from the project financing agreement (third-party financed).
Commerce and the public entity agree to terminate the loan agreement.
Commerce agrees to unencumber the funds associated with the terminated loan agreement and will revolve the funds back into the program RLF.

Projects Not Proceeding to Construction

Commerce will release the funds to the public entity only in instances when the public entity selects to not proceed with the energy efficiency project or renewable energy projects, after the energy audit or feasibility study has been submitted to the public entity

Repayment terms

Energy Efficiency or Renewable Energy Project(s) that DO NOT Proceed to Construction

Commerce and the public entity agree to amend the loan agreement to establish a loan repayment plan, to be repaid within a 3-year term.
Commerce will release the encumbered funds to the public entity to be used to pay the service provider for the cost of the energy audit report.
The public entity agrees to repay Commerce the amount loaned, plus annual interest payments equaling 2%.

Energy audit or feasibility study report ownership

The loan award recipient will own the report. However, Commerce will be given a copy of the final report and any requested work products, as well as full access to the study and any analysis performed to complete the study. Work products that are created using the RLF funds are subject to public information laws. Provisions may be included to protect intellectual property rights on a case-by-case basis.

Program Definitions

Energy Efficiency Project – is a project identified through execution of an energy audit performed by a qualified professional with specialized skills who analyzes building systems to quantify energy consumption, energy costs, energy savings opportunities, and carbon emission reductions that are associated with discreet energy conservation measures and proposed in an energy efficiency energy audit report.

Energy Audit – is an inspection, survey and analysis, performed by a qualified professional, used to quantify the costs, energy savings potential, financial incentives, return on investments, and carbon emissions reductions associated with a proposed energy efficiency project.

Renewable Energy Project – is a project identified through the execution of a feasibility study performed by a qualified professional with specialized skills required to analyze and quantify energy consumption, energy costs, and energy production potential associated with a discreet renewable energy system (PV solar, solar thermal, wind energy) proposed in a renewable energy feasibility study report.

Feasibility Study – is an inspection, survey and analysis, performed by a qualified professional, used to quantify the costs, energy production potential, financial incentives, return on investments, and carbon emission reductions associated with a proposed renewable energy.