California Energy Commission Letterhead

3 Percent Loans For Energy Efficiency And Energy
Generation Projects

Budgets are shrinking, energy costs are increasing. Now is the best time to invest in energy efficiency with a new lower interest rate of 3 percent. Up to $24 million in loan funds from the California Energy Commission (Energy Commission) are available for energy cost saving projects. Loan applications are accepted on a first-come, first-served basis. The new rate applies to loans made on or after July 9, 2009, and ends when a new notice is issued. The 3 percent interest rate will not be applied retroactively to existing loans.

Who is eligible?

Cities, counties, special districts, public schools, colleges and universities, public care institutions, and public hospitals are eligible to apply. Nonprofit entities such as schools, hospitals and public care facilities are not eligible for these funds.

How much is available and what is the maximum amount per application?

Up to $24 million in funds are currently available with a maximum loan amount of $3 million per application. If organizations already have existing loans from the Energy Commission, they must demonstrate that their existing loan-funded projects are progressing before another loan will be awarded. There is no minimum loan amount.

What projects are eligible?

  • Projects with proven energy and/or capacity savings are eligible. Common projects include energy efficiency upgrades to lighting systems; heating, ventilating and air conditioning systems; light emitting diode traffic signals; energy management systems and equipment controls; cogeneration systems; pumps and motors; and renewable energy projects.
  • Energy audits and feasibility studies may be eligible for loans.

What are the project/loan requirements?

  • Projects must demonstrate technical and economic feasibility.
  • Loans for energy projects must be repaid from energy cost savings within 15 years, including principal and interest (approximate 11 years simple payback). Simple payback is calculated by dividing the dollar amount of the loan by the anticipated annual energy cost savings.
  • Loans awarded for energy audits/studies only must be repaid within two years.
  • The loan term cannot exceed the useful life of loan-funded equipment.
  • Only approved project-related costs with invoices dated after loans are officially awarded by the Energy Commission at a Business Meeting are eligible to be reimbursed from loan funds. If the application is rejected for any reason, the Energy Commission is not responsible for reimbursement of any costs.

How can I get an application?

The application is available online at

Or receive a print copy by contacting the Energy Commission's Special Projects Office at (916) 654-4104 or by submitting a written request to:

California Energy Commission
Special Projects Office
1516 Ninth Street, MS #42
Sacramento, CA 95814-5512
E-mail: []

Any Questions?

Contact the Energy Commission's Special Projects Office at (916) 654-4104 or by e-mail at []

News media should direct inquiries to the Media and Communications office at (916) 654-4989.

Date online: July 9, 2009