Alternative Energy Loan Program
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 designed so that the energy produced is used by the generating entity, although net-metering is allowed. The program has traditionally been funded by air quality penalties collected by the Department of Environmental Quality (DEQ). Federal stimulus funding has recently been introduced into the loan program. Energy conservation measures installed in conjunction with an alterative energy project may be funded through the AERLP.
Download Loan Application Here:
Commercial Energy Loan Application for individuals
Residential Energy Loan Application for individuals
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 code goes on to list "fuel cells that do not require hydrocarbon fuel, geothermal systems, low emission wood or biomass, wind, photovoltaic and small hydropower plants (under 1 megawatt) and other recognized nonfossil forms of energy generation." DEQ will provide technical review and approval of systems proposed for the loan program.
What energy conservation measures may be included in a project?
Additional insulation, efficient windows, doors, and fixtures are examples of measures that may be proposed for funding. Energy conservation measures must be installed as part of the alternative energy project to be funded through the program.
How much can I borrow?
Loans can be made up to a maximum of $40,000 (subject to available funds), and may be repaid in up to ten years, depending on the loan amount. Interest rates are set annually and are fixed for the term of the loan. The interest rate for 2010 is 4.0 percent.
How does the process work?
DEQ accepts and processes loan applications throughout the year. Approved projects are ranked according to the criteria published in ARM, Title 17, Chapter 85, which includes items such as system reliability, return on investment and avoided fossil fuel consumption. Once a loan is approved, the applicant is informed whether funds are currently available, and if not, when new funds are anticipated.
What is net-metering?
Net-metering is a special installation that allows any surplus energy generated by the customer's system to go back on the utility electric system. Net-metering allows the customer to receive "credit" for the electricity put back onto the system at retail rates. The customer's meter measures the electricity the customer used from the utility system less the electricity the customer's system puts back.
Net-metering is available on the NorthWestern Energy and Montana-Dakota Utilities systems for renewable installations of less than 50 kW capacity. Most electric co-ops also offer net-metering. Contact your local electric utility for their net metering policies.
How can I get more information?
Roxann Lincoln
Phone: (406) 841-5214
Kathi Montgomery
Phone: (406) 841-5243
