High-Performance Buildings Incentive 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 high-performance buildings. 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 the Commonwealth Finance Authority (CFA). Program guidelines were issued in April 2009 and revised in November 2009. Incentives are available to both in-state small businesses (100 or fewer total employees) and individuals for the construction or major renovation of homes or commercial buildings. Homes must be primary residences in order to be eligible.

The program will offer support for green buildings in the form of loans, grants, and loan guarantees (i.e., grants to be used in the event of a financing default). In order to be eligible for incentives, new construction and major renovation projects must achieve the applicable Gold certification under USGBC LEED or the National Green Building Standard, or at least 3 Globes under the GBI Green Globes system. Buildings must also meet additional requirements in certain categories. 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 high-performance building

- Project planning, design, and modeling work

- Fees for registration and certification of a project

- Commissioning and enhanced verification of building performance

- Administrative costs of the applicant to administer a grant

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 available at a fixed interest rate, which is updated quarterly, and must be repaid within 10 years. The maximum loan is $100,000 for residential projects and $2 million for small business projects. Loans may be amortized over a period of up to 25 years.

Grants
Grants are available for up to 10% of eligible project costs or $500,000. Applicants may request both a grant and a loan, but not for the same project.

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, up to $100,000 for residential projects and $2 million for small business projects. Loan guarantees have a term of no more than 5 years. 

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