Pennsylvania Solar Incentives

Renewable Energy-Related Legislation and Loan programs in Pennsylvania

State Legislation
In July 2008, $80 million were sanctioned for loan and grant program in Pennsylvania to facilitate the solar energy technologies. This funding came from the $650 million alternative energy bill signed by the Democrat Governor Edward Rendell, this initiative was supervised by the Department of Environmental Protection (DEP) and the Department of Community and Economic Development (DCED) under the direction of Commonwealth Finance Authority (CFA). Various business sectors are eligible to apply for this loan program including profit or non-profit organizations, schools, local governments and economic development organizations.

According to the Special Session H.B. 1 of The General Assembly of Pennsylvania, all the facilities that utilize waste coal, alternative Biomass, solar energy, wind energy and geothermal energy come under the title "Alternative Energy Production Project". Those who are entitled to be granted with this loan for development must fall under these categories:

1. Systems using renewable energy sources as their source of energy
2. Systems that install equipment to facilitate or improve energy conservation and efficiency.
3. Solar electric or solar thermal installations.

The applicable system must have a lifetime of at least 4 years. The fund can be granted for various parts of the whole project including

1. Infrastructure development and land acquisition for necessary project construction
2. Preparation of the land for the project
3. Renovation of the infrastructure to facilitate the ongoing project
4. Purchase of the necessary equipments for solar systems
5. Permit fees and also the administrative costs of the project.

The applicant must provide proof for availability of matching funding equal to the granted amount. Moreover for Solar thermal system, there is one more requirement for the SRCC-100 rating or other comparable rating from DEP. All the systems must be bought and installed new and UL-listed.

According to 24 P.S. enacted in 13th July 2005, all new schools must be built efficiently under the Governor's Green Government Council of Pennsylvania. Under this program a part of the soft costs of designing a green building will be provided. The amount that will be granted is capped at $25,000. The funding will cover modeling costs, consultancy fees and documentation costs for LEED-NC certification. An amount equivalent to 10% to the total cost of the building or renovation can be availed under this incentive.

State Funding
Funding is availed in several different flavors. As of April 2009, Loans can be secured with an interest of 5% and repayment tenure of 10 years for equipments and 15 years for real estate. Various manufacturing facilities can avail an amount up to $35,000 through this loan and for various energy production projects it is capped at $5 million. All loan applications will be evaluated by the authorities on a case by case basis.

State Grants
Funding can also be availed through Grants. Manufacturing facilities can get an amount up to $5,000 through these grant schemes while, various energy production facilities can take up to $1 million. Various R&D projects or studies on Renewable Energy System are also eligible for a grant of 50% of the cost or $175,000 whichever is lesser. Generally CFA considers various projects eligible for grants where the contract is for less than 10 years rather than loans. The applicant must produce Solar Renewable Energy Certificates (SRECs) during the process to be considered eligible for the loan or grant. Not only this, loan guarantees are also available under this program. This funding can be used in case of financing default on the applicant's part. An amount equivalent to 75% of the deficiency can be availed through this program. The maximum amount allocated for loan guarantees is $30 million and the repayment tenure is kept at 5 years for all applicants.

State Loan Programs

Pennsylvania Energy Development Authority
The Pennsylvania Energy Development Authority (PEDA) provides various periodical financial incentives to energy projects in the field of solar thermal electric, photovoltaic, renewable transportation fuels, fuel cells, geothermal heat pumps and coal mine methane. PEDA's April 2010 solicitation offers $16 million under this incentive program. All the applicants are required to produce some documented cost share or matching funds. PEDA is willing to accommodate 30 projects under the current budget.

• Program Budget: $16 million
• Maximum Incentive: $1 million

Pennsylvania Energy Harvest program
To preserve land quality, reduce air pollution and provide opportunities for the agricultural community, the Pennsylvania Department of Agriculture and the Pennsylvania Department of Environmental Protection (DEP) started the Pennsylvania Energy Harvest program in 2003. Under this program financial incentives can be availed for various projects which make use of renewable energy technologies. Till 2007, $26 million was awarded under this program as financial incentives. Projects which do not concern environmental or energy concerns are not eligible to apply for. In April 2008 solicitation of $5 million is offered and new Request for Proposal is issued during the spring of each year.

Keystone HELP Energy Efficiency Loan & Rebate Program
Homeowners in Pennsylvania are eligible to get financial incentives under the Keystone HELP Energy Efficiency Loan & Rebate Program. This program is administered by the Pennsylvania Treasury Department, the Pennsylvania Housing Finance Agency and the AFC First Financial Corporation. To become eligible homeowner must have an annual income of less than $150,000 and they can apply for only one loan every fiscal year. Various types of secured and unsecured loans like Energy Star Loans, Advanced Performance Energy Star Loans, Renovate and Repair Energy Star Loans and Whole House Improvement Loans are available under this program. With $17 million of budget the loan portion for this program remains open.

• Program Budget: $17 million
• Maximum Incentive: $35,000

Small Business Pollution Prevention Assistance Account Loan Program
Under Small Business Pollution Prevention Assistance Account Loan Program various small businesses in Pennsylvania having 100 or less full time employees are eligible to avail low interest loans for projects implementing renewable energy technologies. This program started in 1999. And it has sanctioned loans for more than $9.3 million.

• Maximum Incentive: $100,000
• Terms: 2% fixed interest; Loan term of 10 years

Investor-Owned Electric System Funding

Metropolitan Edison Company Sustainable Energy Fund
The Metropolitan Edison Company Sustainable Energy Fund was sanctioned in the year of 2000 by First Energy and an amount of $5.7 million was made available for immediate grants. Later due to the merger between GPU Energy and First Energy an additional amount of $2.5 million was added to this program. Though under this Local Grant program no eligible efficiency technologies have been specified, but various eligible Renewable include Solar Water Heater, Solar Thermal Electric, Passive Solar Space Heat, Solar Space Heat, Solar Thermal Process Heat, Photovoltaic, Biomass and Fuel Cells. The fund can be used for various purposes including development of renewable energy technologies, energy conservation, sustainable energy efficiency, improvements of environment in the company's territory.

• Maximum Incentive: $25,000

Penelec Sustainable Energy Fund
First Energy also establishes the Penelec Sustainable Energy Fund in 2000 under which an amount of $9.1 million was sanctioned for local loans and grants. The entire fund is administered by the Community Foundation for Alleghenies in Johnstown, Pennsylvania. Two third of this fund is made available for venture capital and business lending and one third for environmental grant making. The fund is sanctioned mainly to facilitate the development of renewable energy technologies and sustainable energy business.

Local Loan Programs

Sustainable Energy Fund
Sustainable Energy Fund (SEF) is an organization that grants limited number of loans in the PPL Territory. Eligible sectors are industrial, commercial, local government and non-profit. The amount which can be sanctioned will greatly depend on the project. The fund has been released with the following purposes: financing sound energy solutions for businesses, manufacturing facilities and teacher training under CFL Energy education. The SEF was a direct consequence of the merger of PPL Inc. and the PUC. An amount, greater than $25 million was made available under this program. The organization can offer loans from $35,000 up to $750,000.

Sustainable Development Fund Financing Program
Sustainable Development Fund Financing Program was established by the Pennsylvania Public Utility Commission in the final order of the PECO. This program is administered by the Reinvestment Fund, Inc. (TRF). After the PECO Unicom/Energy merger SDF had additional funding later. Currently, the total amount of funding available is $31.8 million. Various energy efficiency technologies like Heat pumps, Lighting, Air Conditioners etc are eligible to apply. Other eligible renewable technologies are photovoltaic, solar space heat, solar thermal processes, geothermal heat pumps etc. the fund can be availed in the form of subordinated debt, commercial loans, equity financing and royalty financing. The 2009 Program Plan had the expected awarding up to $4 million in loans, equity investments and other financing.

West Penn Power Sustainable Energy Fund
To facilitate the use of renewable energy and clean energy in West Penn Market, the West Penn Power Sustainable Energy Fund (WPPSEF) has been established. Solar system manufacturers, distributors and service companies can avail commercial loans under this program.The loan will be offered at an interest below the rate available in market.

According to 72 P.S enacted in 29th November 2006, wind turbines and all related equipment are exempt of tax assessors. The equity evaluation of the property is done by the capitalized value of land-lease agreements. The WSPPSEF's updates in the year 2010 show a focus on energy conservation of residential single-family and multi-family moreover keen interest is shown for commercial biomass heat projects.

Utility Loan Program

Adams Electric Cooperative - Energy Efficiency Loan Program
Adams Electric Cooperative started offering financial incentives to its residential customers under the Energy Resource Conservation (ERC) and Supplemental Loan Program. Fund will be sanctioned based on the credit status of the applicant.

• Maximum Incentive: $25,000
• Terms: Rate: 5%. Payment up to 7 years

Rebate Programs

PA Home Energy (West Penn Power) - Home Efficiency Incentives
To let Pennsylvania consumers reduce home energy use the West Penn Power Sustainable Energy Fund (WPPSEF) has started the Pennsylvania Home Energy program and only customers of West Penn Power (Allegheny Energy) are eligible to apply for this program. It is expected to expand the scope of this program. Normally incentives are available under two programs - Energy Star Homes program and Home Performance with Energy Star program. Energy Star program focuses on saving utility bills and in 2009 alone saved $17 billion.

PA Home Energy operates hand in hand with the Keystone Home Energy Loan Program (Keystone HELP) so that homeowners who have adopted Energy Star standards should get low-cost financing. An amount in the range of $200 to $1000 can be availed through this program. New homes certified by the Home Energy Rating System (HERS) index are eligible to avail increased incentives.

Pennsylvania Sunshine Solar Rebate Program
Under this rebate program all Pennsylvania residents using Photovoltaic and Solar systems are eligible to avail funding. This program started in May 2009 under the Pennsylvania Department of Environmental Protection (DEP). A total amount of $100 million is available under this program.

The system must be installed in the applicant's home and it must be his primary residence in Pennsylvania. No repairing cost will be supported under this program. One prerequisite for submitting the application indicates that applications should be submitted by an official installer on behalf of the applicant.