Energy Efficiency Revolving Loan Fund

Summary

The Illinois Environmental Protection Agency (“IEPA”) Office of Energy, in partnership with the Illinois Finance Authority & Climate Bank (“IFA”), is excited to announce the launch of a new Energy Efficiency Revolving Loan Fund (“EE RLF”) Capitalization Grant Program made possible by the Bipartisan Infrastructure Law (“BIL”) and the U.S. Department of Energy (“US DOE”). This program aims to support and accelerate energy efficiency projects statewide, with a special focus on assisting nonprofits, public entities, and underserved communities.

The EE RLF will introduce a specialized Bridge Loan to help nonprofits and public entities finance building electrification, energy storage, and distributed generation projects. Federal tax credits have traditionally been nonrefundable, meaning that if their tax credits exceed the amount owed in taxes, they would not get refunded. This poses a problem for nonprofits and local governments because they do not pay taxes and, subsequently, could not receive these incentives. Under the Inflation Reduction Act (“IRA”), these groups are now eligible for direct payments for their clean energy projects instead of tax credits. However, the delay in receiving these payments can hinder project implementation. We have seen similar problems in Illinois with the receipt of Illinois Solar for All incentives upon project completion and a lack of up-front funding. 

To minimize this gap, IFA’s Bridge Loans will offer low-interest, short-term financing up to $1,000,000. Loans are available for up to 24 months, with no monthly payments required until receipt of direct pay tax credits from the U.S. Treasury and/or receipt of Solar for All incentives from the Illinois Power Agency. In select cases, the Authority will also consider participating with a Project Lender to finance project costs not covered by IRA Tax Credits and IL Solar for All incentives. These financing solutions ensure that nonprofit and public entities can participate fully in the clean energy transition.