Loan Guarantees
To encourage the development of clean sources of energy, the Energy Policy Act of 2005 established DOE's Loan Guarantee Program. Guarantees can be issued for loans of up to 80% of a project's total cost and are targeted only for projects that avoid, reduce, or sequester greenhouse gas emissions and employ "new or significantly improved technologies as compared to commercial technologies in service in the United States."
In a recent press release Secretary of Energy Steven Chu announced changes to the loan guarantee program intended to expedite disbursement of funding from the American Recovery and Reinvestment Act. According to the press release, these changes will allow the DOE to be in a positions to:
- Begin offering loan guarantees under the Department's previous loan guarantee program by late April or early May. These offers may still require recipients to secure their own share of the financing — similar to earnest money in a home mortgage – or meet other conditions prior to closing, but DOE will have completed its review.
- Begin offering loan guarantees under the new Recovery legislation by early summer. Again, these offers may still require recipients to secure their own share of the financing or meet other conditions prior to closing.
- Disperse 70 percent of the investment from the American Recovery and Reinvestment plan by the end of next year.
Learn more about the program and loan guarantee solicitations at the Loan Guarantee Program Web site.