What is it?
The Alternative Energy Revolving Loan Program (AERLP) was established by the 57th Montana Legislature in 2001 with amendments dating from 2005. Its purpose is to provide a financing option to Montana homeowners, small businesses, non-profits and government entities to install alternative energy systems. The program is funded by air quality penalties collected by the Department of Environmental Quality (DEQ).
Energy from these renewable systems is intended for use by the owner. Net-metering is allowed (see More Details). Energy conservation measures installed in conjunction with an alternative energy project may be funded through the program, limited to 20 percent of the loan amount.
A 2016 Brochure on the program is available, as is the 2016 Outcomes Report. A Frequently Asked Questions (FAQ) page also addresses the loan program as does the More Details page.
The interest rate for 2017 is fixed at 3.25 percent.
What are Alternative Energy Systems?
Alternative energy systems are defined by law as "the generation system or equipment used to convert energy sources into usable sources." The types of systems most commonly financed include: solar panels that generate electricity (photovoltaic systems); solar panels for hot water and/or space heating; small wind generators; small hydropower plants (under 1 megawatt); biomass (wood) heating appliances; and ground-source heat pump systems for space and water heating.
Other recognized non-fossil forms of energy generation may qualify. DEQ provides technical review and approval of all systems proposed for the loan program and can be consulted for details.
How much can I borrow?
Loans can be made up to a maximum of $40,000 and may be repaid in up to 10 years, depending on the loan amount. Interest rates are set annually and are fixed for the term of the loan.
How does the process work?
DEQ generally accepts and processes loan applications throughout the year. It usually takes three to four weeks for the approval process, and up to two additional weeks for loan funds to be deposited to the borrower's bank account. Technical and financial analyses take place simultaneously.
1. DEQ analyzes the request, reviews the project's technical merit, and sends the application packet to the financial contractor for financial review.
2. DEQ's financial contractor, Montana Business Assistance Connection (MBAC), analyzes credit and repayment history, debt-to-income ratio, and loan security. The contractor may request additional information needed to process the loan application. (The application process will be suspended until any requested information is received.)
3. The financial contractor recommends qualified applicants for loan approval to DEQ.
4. Technical aspects of the project are reviewed in greater detail by DEQ. DEQ approves applications that qualify both technically and financially.
5. The Montana Environmental Policy Act (MEPA) requires a review of the proposed project's impact on surrounding environmental and cultural resources. This review will be provided by DEQ.
6. Upon approval by the financial contractor and DEQ, qualified applicants are issued loan and security documents. A listing of items needed for loan closing is provided. For example, permits and insurance documentation are normally required.
7. Final loan documents are signed and MBAC deposits loan proceeds into the borrower's bank account.
8. Borrowers are required to keep records of expenditures and to document phases of construction and installations. Photographic records are required.
9. Loan payments are made to MBAC and returned to DEQ to revolve out to new loans.
What can loan funds be used for?
Loan funds are restricted to qualified purchases and services, including: equipment; engineering and consulting; installation costs; energy conservation measures; other qualifying items as approved by program managers. Loan funds may not be used to purchase land or buildings. See Frequently Asked Questions for more details.
So, You're Ready to Apply for a Loan?
Please first review the checklist before filling out applications. The checklist applies for both residential and commercial loans.
There are two separate applications that need to be completed for all residential loans. Please also print the checklist for reference. The links below are to fillable forms that can be completed electronically and saved on your computer. Complete both the AERLP Residential Application and the Uniform Residential Loan Application forms, print and sign them, and mail both applications and all of the documents detailed on the checklist to the address listed below.
AERLP Residential Application (Fillable Form)
Uniform Residential Loan Application (Fillable Form)
If you would prefer to complete the standard printed applications instead of the electronic forms, please contact the program and we will send you the forms.
Download and print the application, complete and sign the application in ink, mail the form, application fee, and all required documentation to the address listed on the application (see checklist).
Commercial Application (Non-fillable printable form)
Alternative Energy Revolving Loan Program
P.O. Box 200901
Helena, MT 59620-0901
The Frequently Asked Questions page and More Details about the program contain additional information about tax credits, installers and more.