Local Option- Residential Energy Efficiency Loan Loss Reserve Program

Arkansas Energy Office (AEO) offers a loan loss reserve program that the utilities can participate in to subsidize their energy efficiency loans to its residential customers. Municipal utility districts, electric cooperatives, investor owned utilities, and any credit union or other capital provider working with the energy providers can participate in the program. Please contact your utility to check if they are a participant in the program. Program DescriptionParticipants for the program must use the loan funds to provide on-bill repayment or on-bill financing program to their residential customers for energy efficiency upgrades. The loan are offered for residential energy efficiency retrofits that provide verifiable energy savings. Such upgrades may include installation of insulation, lighting, HVAC, weather sealing, ENERGY STAR appliances, installation of solar power appliances with improved efficiency, and others. Funds may also be used for installation of renewable energy technologies as long as the primary purpose of the upgrades are for energy efficiency or energy savings of the building. New construction are not eligible for the program. Loan loss reserves are credit enhancement tools used to reduce the borrowing costs.

The program provides the participants loan loss reserve in the amount of 10% of the total loan fund for their program. In case of the loan default, the participant will receive the loan loss reserve for the losses. Funds are available on a limited amount, and is allocated on a first come, first serve basis.