The U.S. Department of Agriculture (USDA) Rural Utilities Service (RUS) last week opened an application window for approximately $100 million in interest-free loans to rural electric co-ops (and other rural electric utilities) to support member-facing energy efficiency and other clean energy programs.
The Rural Energy Savings Program (RESP) is beginning its third lending cycle. These loans are for investments in the homes and businesses of electric co-op members to make cost-effective energy improvements.
Many families are unable to access traditional utility incentive programs because they cannot afford the upfront investments. Low-cost financing, either through a loan or tariff, can significantly broaden who participates in energy upgrade programs, increasing a utility’s ability to help lower-income members who can least afford high energy costs.
Financing also drives bigger individual projects that achieve deeper savings. RESP is designed to capitalize finance programs that deliver energy savings and improved home comfort and safety to a broader cross-section of an electric co-op membership. This includes on-bill financing programs, where participants repay their utility over time as a line item on their bill.
RESP funding can be used for nearly any measure that will reduce total energy costs for participating members. This could be HVAC upgrades and other traditional efficiency measures, but it goes much further. Energy storage, renewable energy systems, water efficiency improvements, and even full replacement of manufactured homes are eligible. RESP can also be used to finance fuel switching projects—as long as they are projected to reduce members’ overall energy costs. This is an opportunity to help members move off delivered heating fuels and onto efficient heat pumps, lowering their bills while increasing electric sales.
How to apply
Unlike previous, shorter RESP application windows, electric co-ops have more than a year to submit a letter of intent (LOI) to apply for the program. Rural Utilities Service will accept and review LOIs on a rolling basis through September 2019 (or until all funds are obligated, whichever comes first).
RESP is a focus of the Partnership for Advancing an Inclusive Rural Energy Economy, a collaboration between NCBA CLUSA and the Environmental and Energy Study Institute (EESI). EESI has grant funding to assist interested electric co-ops in preparing a RESP LOI at no cost.
Resources
- RESP Notice of Funding Availability
- “Power Play: Why electric co-ops are investing in energy savings programs” (Cooperative Business Journal, Spring 2018)
- NCBA CLUSA and the Environmental and Energy Study Institute‘s webinar on innovative financing programs with USDA funding