The General Assembly
of Maryland authorized the Community Energy Loan Program (CELP) for implementation
as of July 1, 1989. Originally funded with $3.2 million in seed money, CELP provides local governments and nonprofit organizations in the
State a unique opportunity to reduce their operating expenses by identifying
and installing energy conservation improvements. CELP allows borrowers
to use the cost savings generated by the improvements as the primary source
of revenue for repaying the loans. This neutral budget impact makes CELP
an attractive financing opportunity for interested organizations.
Loans under the
Program can be made to eligible nonprofits, including hospitals and private
schools, or local governments, including public school systems and community
colleges. (Eligible applicants may not have a mission that is primarily
religious or fraternal.) The program is open continuously throughout the
fiscal year to accept applications, and CELP staff is available to work
with applicants in completing the application forms and explaining program
requirements. Currently, CELP funds approximately $1.5 million in new projects
each fiscal year.
Projects considered
for funding can include those that: save energy; are performed in a building
owned or leased by the applicant; are installed in a building that has
existing heating and/or cooling systems; and have a simple payback of
seven years or less. All costs necessary for implementing an energy conservation
project can be considered for funding, including the technical assessment,
reasonable fees for special services, plans and specifications, and the
actual costs of construction.
Up to 40% of each
year's allocation, or approximately $600,000, is available per loan. Applications
are reviewed and ranked to achieve the best distribution of funds throughout
the State and among the eligible organizations. Each loan is negotiated
separately and the applicant is required to make a contribution to the
project, although the contribution does not have to be in cash. The interest
rate is negotiated by individual loan and is guaranteed to be below market
rate. The current average interest rate is approximately 3.5%.
Semiannual payments
are made by the applicant beginning in the second year of the loan. The
first year is deferred to allow the applicant time to complete the energy
project and to begin to realize savings. The maximum repayment term on
any loan is the simple payback of the project, plus the one year of deferral.
By offering the Community Energy Loan Program as a
revolving loan fund rather than a one-time grant, Maryland is able to
maximize the use of the funds. Repayments and interest earned by the fund
will allow the program to continue making loans for the foreseeable
future. To date, 47 loans have been made providing $10,791,000 for energy efficiency improvements.
Please address questions
& comments via email to Dave Cronin, dcronin@energy.state.md.us or call 1-800-72-ENERGY.
Additional Information
