With the rising energy costs businesses are experiencing across the United States, the Department of Energy is offering what is called a Loan Guarantee Program to qualified companies. This program is designed to drastically reduce the financing costs that businesses must pay for large green energy projects.
Since the Department of Energy introduced the programs, 28 projects have been completed while generating thousands of jobs in both the manufacturing and construction business sectors. The Solar Energy Industries Association (also known as the SEIA) is a huge supporter of the Loan Guarantee Program because it brings down the cost of installing solar energy technology.
All About the Loan Guarantee Program
The Loan Guarantee Program was created in 2005 because the DOE saw a need to help businesses with the rising costs of installing and maintaining green energy systems. Long term financing is often the biggest factor that businesses consider when deciding whether or not to install solar energy equipment and has often deterred businesses from moving forward.
Not unlike the simplicity of getting a payday loan online, the application process for DOE-backed alternative energy loans is a fast and user-friendly process for businesses seeking financing.
Since the program's inception in 2005, over $25 billion in private investments have been made to help spur job and revenue growth for these businesses. Currently, the program has completed and written documentation for 28 different projects, with two more currently waiting for approval.
What are the Advantages for Businesses?
The risk that businesses take is greater in these situations because the technology is currently in transition from research and development to implementation by commercial deployment.
The loan program encourages businesses to take out loans for solar energy installation by guaranteeing that the loan will be repaid to the bank. So, if the business should default, the government will step in and help repay the loan. This method helps mitigate the risk felt by both businesses and financial institutions. Each applicant goes through a rigorous screening process and funds are set aside to cover future defaults, if necessary.
Success Has Already Arrived
Despite the fact that the program has only been in affect for 10 years, Americans are already experiencing success as a result of the advances brought about by these green energy loans.
Eleven utility-sized solar power plants are currently being constructed in the southwestern part of the United States. The energy generated from these plants will be enough to power 500,000 homes. Other contracts are currently being implemented to install 750 MW of solar equipment on commercial buildings in 28 different states.
Above all else, the DOE Loan Guarantee Program has created thousands of jobs across the country. Manufacturing and construction are large employment sectors that offer a quality of life for many Americans who were struggling for years.