Alternative Energy Loan Frequently Asked Questions

Frequently Asked Questions

 

How is the money received and used?

Loan funds are usually paid to the borrower shortly following signing of final loan documents. Loan funds are restricted to qualified expenditures. DEQ site visits may be required to assure the loan funds are used as proposed.


What can loan funds not be used for?

Loan funds may not be used to purchase land, buildings, or vehicles. Loan funds cannot be used to pay the applicant for labor or in-kind services. Loan funds cannot be used for back-up systems (i.e., electric furnace, fossil fuel-powered generator, etc.).


What can loan funds be used for?

Loan funds are restricted to qualified purchases and services, including: engineering and consulting services; financial services associated with the project; normal loan fees and closing costs; equipment and components; installation costs and associated services; energy conservation products and associated installation costs and services; other qualifying items as approved by program managers.


What technical information is required?

A site assessment of the project is generally required, including a map delineating the planned locations for the equipment to be installed. Other information includes:

  • Energy production estimates as appropriate;
  • Energy saving calculations with assumptions;
  • Product information, specifications, manufacturing data, brochures, etc. for appliances and/or equipment to be installed;
  • Information on dealers as needed; 
  • Contractor bids. 

What loan security is required?

An applicant must provide some form of loan security. The loan program can accept a first mortgage or a junior position on a home mortgage, should the applicant have adequate equity in the home. In these instances, the loan program may require a property appraisal. The installed alternative energy system components purchased through the program may be acceptable loan security with a lien on the equipment. 


What are the project documentation requirements?

Itemized purchase and construction receipts must be kept by the applicant to document that the loan is used only to pay for qualified project costs. Installations and construction phases will be photographically documented in color by the applicant. Loan recipients maintain records, documents, and other information relating to the loan project and keep records sufficient to account for all funds received and expended pursuant to the loan. All records, reports, and other documents that relate to the project are subject to audit by the office of the legislative auditor, DEQ, and where required by law, the legislative fiscal analyst.

Federal stimulus funding under the American Recovery and Reinvestment Act (ARRA) was introduced into the loan program in 2009. That funding came with specific requirements, including reporting and project verification, a high level of public transparency, as well as other provisions. Most new loans will carry the same requirements as the ARRA funds revolve back into the program. 


What happens to applications when the loan fund is depleted?

When the program receives more applications than funds are available, DEQ will implement a ranking process that prioritizes applications based on criteria published in the Administrative Rules of Montana (ARM, Title 17, Chapter 85). Ranking criteria include: the amount of energy produced, the diversity of technology in the portfolio, the return on investment, the use of a process as a system or equipment generally available in Montana, the geographical diversity of the project portfolio, and the diversity of borrowers in the project portfolio.


Will AERLP insure the project is a good one?

No. The Montana Department of Environmental Quality may not:

1. Act as an attorney, engineer, financial, or tax consultant. The applicant should hire any professionals or professional services needed.

2. Guarantee the project is a good investment.

3. Endorse any product, manufacturer, contractor, or component. All evaluations are made only for loan purposes. The applicant should shop for competitive bids and use professional help if necessary.

4. Compel a contractor or engineer to remedy defects in construction or to live up to any contracts they make with you.

5. Insure that any project is safe.


Can AERLP recommend installers?

No; however, various organizations maintain lists of recommended or qualified installers that operate in Montana. The Montana Renewable Energy Association (MREA) maintains a list of its member installers on its website. Applicants in NorthWestern Energy's service area may wish to consult the utility's listing of approved installers through its Renewable Energy Program.