Wind and Geothermal Industry Incentives Program

In July 2008, Pennsylvania enacted a broad $650 million alternative energy bill designed to provide support for a variety of renewable energy and energy efficiency technologies. Included in this legislation was a provision authorizing the creation of a $25 million grant and loan program for wind and geothermal energy technologies. The program is jointly administered by the Department of Community and Economic Development (DCED) and the Department of Environmental Protection (DEP), under the direction of Commonwealth Finance Authority (CFA). The most recent program guidelines were issued in January 2014, available here. Incentives are available to businesses (including non-profits), economic development organizations, political subdivisions (e.g., local governments, schools, etc.), and individuals. 

The program will offer support for wind and geothermal technologies in the form of loans, grants and loan guarantees (i.e., grants to be used in the event of a financing default). The definition of geothermal includes, but is not limited to, closed-loop geothermal heat pump systems that use the ground, groundwater, or an underground mine as an energy source. Eligible wind energy-related applications include energy production facilities and manufacturing facilities for wind turbines and other system components. Funds may be used for the following project costs:

Acquisition of land and buildings, rights-of-way, and easements necessary for project construction

• Clearing and preparation of land to build an eligible project
• Construction or renovation of a building to manufacture wind or geothermal components and systems
• Equipment purchases for the manufacture of wind or geothermal systems
• Purchase, installation, and construction of facilities to produce and distribute geothermal or wind energy
• Project planning and feasibility studies
• Permit fees
• Administrative costs associated with an eligible project, not to exceed 2% of funding

The individual support mechanisms are described in more detail below. For all types of support, there is a general requirement that applicants provide matching funds equivalent to the funding offered under the program. 

Loans 

Loans are generally available at a fixed interest rate for terms of up to 10 years (equipment) or 15 years (real estate). Interest rates are set at 250 basis points above the 10 year Treasury bond (5% as of November 2014). Loans for manufacturing facilities are limited to $40,000 per job created within three years of loan approval. Loans for geothermal systems may not exceed $3 per square foot of space to be served by the system, up to $5 million. Loans for wind energy generation or distribution projects are limited to $5 million. 

Grants 

Grants for renewable energy manufacturing facilities are available for up to $5,000 per job created within three years of grant approval. Grants for wind energy production or distribution facilities are limited to $1 million. Planning and feasibility studies are also eligible for grants of the lesser of 50% of the cost of the study or $175,000. Grants are not available for the installation of geothermal energy systems. 

Loan Guarantees 

Loan guarantees will take the form of a grant that may be used in the event of financing default on the part of the applicant. Loan guarantees are limited to 75% of the deficiency up to $5 million. The term of the grant may not exceed five years. 

Visit the program web site and review the funding guidelines for additional program details and application procedures.