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Alternative Energy Revolving Loan Program

Program Overview

The Alternative Energy Revolving Loan Program (AERLP) provides low-interest loans to increase investments in alternative energy systems and energy conservation measures in Montana.

The AERLP was established by the 57th Montana Legislature in 2001 and is managed by the Montana Energy Office, a bureau of the Department of Environmental Quality (DEQ). Since its inception, the program has provided financing for more than $10.3 million in alternative energy systems and energy saving measures installed in Montana homes and businesses. The revolving loan program is principally funded by air quality penalties collected by DEQ.

The interest rate for 2018 is fixed at 3.50 percent.

Who is eligible to apply?

Funds from the AERLP may be used to provide loans to individuals, small businesses, units of local government, units of the university system, and nonprofit organizations.

“Small business” is further defined for the purpose of this program as a business that: “(a) is independently owned and operated; (b) is not dominant in its field of operation; and (c) employs 100 or fewer individuals (Administrative Rules of Montana 17.85.105(15))."

What projects are eligible?

Funding from the AERLP may be used to provide loans for the construction of alternative energy systems and capital investments for energy conservation purposes when done in conjunction with an alternative energy system.

Alternative Energy Systems

“Alternative energy systems” are defined in Montana law as “the generation system or equipment used to convert energy sources into usable sources using fuel cells that do not require hydrocarbon fuel, geothermal systems, low-emission wood or biomass, wind, photovoltaics, geothermal, small hydropower plants under 1 megawatt, and other recognized non-fossil forms of energy generation.” (15-32-102, Montana Code Annotated)

Alternative energy systems commonly financed by the AERLP include:

• Solar photovoltaic (PV) systems
• Solar thermal systems for water or space heating
• Geothermal systems, including ground source heat pumps
• Wind generators
• EPA-certified low-emission pellet stoves or wood stoves

Energy Conservation Measures

“Capital investments for energy conservation purposes when done in conjunction with an alternative energy system” are defined in Montana law as “a capital investment that is used for an energy conservation purpose that is in the same structure as, and is constructed, installed, or otherwise put in service as part of, or at about the same time as, an alternative energy system to reduce the size of energy system needed.” (17.85.103, Administrative Rules of Montana)

Energy conservation measures commonly financed by the AERLP include:

• Insulation
• High-efficiency windows
• Energy-efficient appliances

Additional requirements

The proposed project, activity, or equipment must:

• Be located in Montana
• Be technically appropriate for Montana’s climate
• Be proven reliable and be commercially available
• Generate energy for the sole use of the owner, however, net metering systems are eligible for funding
• Meet all applicable certifications and standards, such as local building codes and utility interconnection requirements
• Comply with applicable statutory and regulatory requirements protecting the quality of resources such as air, water, land, fish, wildlife, and recreational opportunities

DEQ will conduct a technical, environmental and financial review of all applications to determine program eligibility. Feel free to contact program staff with questions.

Loan Program Terms

The current terms for the program are listed below. Please note that availability of loan funds, loan terms, and closing costs are subject to change without notice. Actual closing costs are set during the application review and will be disclosed to the applicant with a loan commitment statement.

• 2018 interest rate: 3.50%, fixed for the term of the loan
• Maximum loan amount: $40,000
• Maximum loan term: 10 years
• $0 down payment; no early-payment penalty
• Non-refundable application fee of $50 for an individual; $100 for a joint application or business/nonprofit/government entity
• Closing costs include origination fee of $250 or 2% of loan amount, whichever is greater; and other fees of approximately $200.

Application Review and Funding Steps

DEQ generally accepts and processes loan applications throughout the year. It usually takes two to four weeks for the approval process, and up to two additional weeks for loan funds to be deposited in the borrower's bank account.

1. Upon receipt of an application DEQ deposits the application fee, assesses the application for completeness, and begins technical and environmental reviews. Program staff will contact the applicant if the application materials are incomplete or if additional information is required to determine eligibility. When technical and environmental reviews are complete, DEQ transfers the application to the AERLP financial services contractor, Montana Business Assistance Connection (MBAC) for financial review.

2. MBAC analyzes the applicant’s credit and loan repayment history, debt-to-income ratio, and loan security. MBAC may request additional information as necessary to process the loan application. Upon completing its financial review, MBAC will make a recommendation to DEQ to either fund or not fund the loan application.

3. DEQ reviews the recommendation and findings of MBAC’s financial review and either approves or denies the issuance of a loan commitment statement to the applicant. MBAC will mail the approved loan commitment to the applicant, including a list of items required for loan closing.

4. Applicant must sign and return the loan commitment statement to MBAC. Upon receipt of a signed loan commitment statement, MBAC will mail final loan documents to the applicant.

5. Applicant must sign and return the loan documents to MBAC. Upon receipt of signed loan documents, MBAC will deposit loan proceeds in the borrower’s bank account.

6. Borrowers are required to keep records of expenditures and to document the completed installation with photographs. When installation is complete, borrower must send a photograph of the completed installation and any additional information requested by the department.

7. AERLP may conduct site visits to verify the project installation.

8. Borrower makes loan payments to MBAC. MBAC will remit those payments to DEQ in order to fund new loans.

Application Forms & Checklists

Prior to filling out a loan application, please review the application checklist (individual, business) and contact program staff if you have any questions about required information or supporting documentation.

Individual Loans

Individuals must complete the Individual Application Form and provide the supporting documentation outlined in this checklist.

Business Loans

Small businesses must complete the Business Application Form and provide the supporting documentation outlined in this checklist.

Nonprofit, Local Government, & University

Please contact program staff to discuss required application materials.

How to submit an application:

The application forms are fillable PDFs that may be filled out, saved, and printed from a computer. You may also print and fill the application out by hand. Applications are not accepted by email; however, you may contact program staff to arrange for secure electronic transfer of application materials.

Mail or deliver completed and signed application, application fee, and supporting documentation to:

Alternative Energy Revolving Loan Program
Montana Department of Environmental Quality
1520 E. 6th Ave.
Helena, MT 59601

Find Out More

Contact Information

Ben Brouwer

Phone: 406-444-6586

E-mail: bbrouwer@mt.gov

Bill Webb

Phone: 406-444-6465

E-mail: biwebb@mt.gov

Mailing Address

Alternative Energy Revolving Loan Program
Montana Department of Environmental Quality
1520 E. 6th Ave.
Helena, MT 59601

About Us

The Montana Department of Environmental Quality is charged with protecting a clean and healthy environment as guaranteed to our citizens by our State Constitution. Our ultimate goal is to protect public health and to maintain Montana's high quality of life for current and future generations.

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