USDA Rural Development: Financing Energy Projects

Ken Yearman, Loan Specialist & Energy Coordinator VT/NH Contact Information Ken Yearman, Loan Specialist & Energy Coordinator VT/NH kenneth.yearman@vt.usda.gov (802) 828-6070 Eric Law, Community Loan Specialist VT/NH eric.law@vt.usda.gov (802) 828-6033 http://www.rd.usda.gov

Mission: Rural Development is committed to helping improve the economy and quality of life in rural America. Housing (Single and Multi-Family) 502, 504, 515 Programs Business Development RBDG, B&I, REAP Programs Essential Community Facilities CF, WEP Programs

Renewable Energy Systems & Energy Efficiency Improvements Program

Eligible Applicants Agricultural Producer Rural Small Business Individual or entity that receives 51 percent or more of their gross income from agricultural production – crops, livestock, aquaculture, forestry operations, nurseries, dairies For-profit small business - as defined by the Small Business Administration (SBA) Rural area or non-metro community of < 50,000

of Eligible Project Costs REAP Grant Assistance Up to 25% of Eligible Project Costs Renewable Energy Systems Energy Efficiency Improvements Minimum Grant Request $2,500 Total eligible project costs > $10,000 $1,500 Total eligible project costs > $6,000 Maximum Grant Request $500,000 Total eligible project costs > $2 million $250,000 Total eligible project costs > $1 million

REAP Grant Allocations FY16 For Grant Requests <$20,000 For Grant Requests >$20,000 Vermont $142,000 $380,000 New Hampshire $143,000 $384,000

REAP Guaranteed Loan Assistance Up to 75% of Eligible Project Costs Minimum Loan Amount $5,000 Total eligible project costs > $6,667 Maximum Loan Amount $25 million Total eligible project costs > $33.4 million Details USDA guarantees a commercial loan; applicant must have a willing lender. Terms are negotiated between the lender and borrower. Fees, appraisals, equity & collateral requirements apply.

 Eligible Project Costs  Ineligible Project Costs Equipment: Purchase & installation New or refurbished Post-application construction & facility improvements Retrofitting Professional service fees Permits & license fees Working capital, land acquisition (Guarantee loan ONLY with restrictions) Residential energy projects Farm tillage equipment Used equipment Vehicles Pre-application construction & facility improvements Application preparation or grant writer fees Line of credit Lease payments Payment to the applicant/business owner, beneficiary, or relative

Grant Scoring Criteria Quantity of Energy Generated or Saved per REAP Grant Dollar Requested (10 points)                        Quantity of Energy Replaced, Saved or Generated (15 points)                                                          Environmental Benefits (5 points) Commitment of Funds (20 points) Size of the Agricultural Producer or Rural Small Business (10 points) Previous Grantees and Borrowers (15 points) Simple Payback (15 points) State Director and Administrator Priorities (10 points)

Edgewater Farm Rooftop solar panels $56,141 Total Cost $14,035 REAP Grant $42,106 Applicant Funds Produces over 45% of electricity needs

Middlebury Train Depot Historical Energy Retrofit $364,913 Total Cost $29,913 REAP Grant $44,869 REAP Loan Guarantee 49% reduction in energy costs

Community Facility and Water Environmental Loan and Grant Programs

Eligible Applicants Municipal Entities Private-Non-Profits For CF, rural areas of < 20,000 – towns, villages, schools, libraries, etc. For WEP, rural areas of < 10,000 – water, wastewater, stormwater, and solid waste utilities Community-based non-profits – hospitals, daycares, assisted living facilities, community centers, theatres, small colleges, museums, etc. serving rural areas of < 20,000 Private, non-profit water utilities – water and wastewater utilities serving < 10,000

CF Loan & Grant Assistance Equipment Only or Entire Project Renewable Energy Systems Energy Efficiency Improvements Grant Request 75, 55, 35, or 15% of Project Maximum grants of $50K Loan Request (2.875%) Up to 100% of Project

WEP Loan & Grant Assistance 100% of Eligible Project Costs

Community Program Allocations Community Facilities Water Environmental Vermont $500K Grant, $11M Loan $3M Grant $4M REAP $10M Loan New Hampshire $300K Grant, $12.5M Loan $3M Grant,

Running the Numbers (CF Example) $250,000 Town Hall Solar Project 35% CF Grant- Eligible Town $50K ($87K-eligible but capped this year to $50K) Check out eligibility at http://www.rd.usda.gov/programs-services/community-facilities-direct-loan-grant-program/nh CF Loan Amount $150K Other Funding $25K (Clean Energy Development Fund Grant) $25K (Donations/Capital Campaign)

CP Funding Criteria Small Communities with a Population of less than 5,500 (up to 30 points) Median Household Income below the Statewide Average, $55K in VT and $67K in NH (up to 30 pts.)                        Health and Sanitary Benefits (up to 25 pts.)                                                      Commitment of Funds/Use of Other Funds (up to 15 pts.) Project Consistent with a Regional Plan (up to 10 pts.) State Director and Administrator Priorities (up to 15 pts.) Other Points include Consolidation, Operational Efficiency, and Facility Type (esp. public safety and health)

 Eligible Project Costs  Ineligible Project Costs Land purchase/site development Equipment: Purchase & installation New only Construction (e.g., weatherization efforts) Legal, engineering, and other consultant services Permits Short-term financing interest Other costs deemed necessary for project completion Pre-application construction & facility improvements Operation and Maintenance Costs *Electric production > facility needs Covering construction costs under a loan kicks in basis of design, voter approval, environmental review, and bidding/contract requirements

Catamount Arts Center 80 Off-site Solar Panels, LED Lighting, and 3 Heat Pumps $272K Total Cost, $150K Direct Loan, $41,000 Grant $59,000 VT Grant, $22K Applicant 30-40% reduction in operating expenses

Wastewater Utility Model On-Site Solar Panel Install $360,000 Total Cost $75,000 NH PUC Grant $285,000 WEP Loan 60% reduction in energy costs

Contact Information Ken Yearman, Loan Specialist & Energy Coordinator VT/NH kenneth.yearman@vt.usda.gov (802) 828-6070 Eric Law, Community Loan Specialist VT/NH eric.law@vt.usda.gov (802) 828-6033 http://www.rd.usda.gov Thank you!