As of June 30, 2006: 22,800 loans for $182.1 million

Questions and Answers...

5% Dollar and
Energy Saving Loans

ben franklin
The Nebraska Energy Quarterly features questions asked about 5% Dollar and Energy Saving Loans.
Loan forms may be obtained from participating lenders, the Nebraska Energy Office, or the agency's web site by clicking on the “Loan Forms” bar above.
Q:
In researching the purchase of a new furnace and air conditioner, I was disappointed that I would have had to purchase a furnace costing $1,000 more in order to qualify for the 5% financing. The difference in energy savings would take many years in order to justify the 5% financing. I don’t consider that much of an incentive. Because of that, I purchased an 80% efficient rather than the 90% efficient furnace.
A:
One of the main purposes in creating the Dollar and Energy Saving Loan program was to help Nebraskans to reduce their energy dependence by using more energy efficient products such as furnaces and air conditioners. In some cases, it will take a number of years to show a payback on some products. In most cases, higher energy efficient products do pay for themselves through energy savings in a shorter time frame. For example, most furnaces last 20 years or longer. In fact, the Energy Office has financed replacement of 50 year old units.

There are instances, such as in well built homes that use very little energy, where a more efficient furnace might not pay for itself. In those cases, if a less efficient furnace is selected, 5% financing will not be available and conventional financing will need to be used.
Q:
We are contemplating applying for an energy loan through our local bank. We are seeking a loan to replace the windows in our house. We also want to replace our propane hot water heater and propane radiant heat system with a corn furnace that would heat the water and circulate it through the radiant system and water system. Would this qualify for the loan? Our lender thought we would have to supply an efficiency report to your office. What would this consist of and from whom should we get this? Any help or suggestions would be appreciated.
A:
First, your windows will need to have a National Fenestration Rating Council (NFRC)-tested whole or total unit U-value of 0.35 or less. If the brand of windows you select is not NFRC-tested, the windows may still qualify if the frames and sashes are either vinyl, wood or aluminum with a thermal break, there are at least two panes of glass, and the space between the glass is filled with either argon, krypton, carbon dioxide, SF6 or some combination of these.

For the corn stove to qualify for a loan, you will need to use Forms 32, 33 and Steps to Obtain a Low Interest Loan Using an Energy Audit. The corn stove must show a minimum 15 year simple payback against the total installed cost. To demonstrate this, complete a "do-it-yourself" energy audit. In that, you compare your actual current heating costs to what you would anticipate if you installed a corn stove. Since this loan would replace your existing propane equipment, that equipment will need to be removed. It cannot be kept as backup as explained in the instructions for line 4a on the back of Form 32. There are some exceptions to this, and those exceptions are listed in the September 2004 Nebraska Energy Quarterly under “Notes and Resources”.

In order to complete your energy audit, you will need to establish a tested efficiency for the corn stove. The type of efficiency would preferably be a seasonal efficiency, but a steady state efficiency could be used and reduced by 5% to 20%, depending on the components of the unit in question. For the purpose of calculating savings, you would need to use the 20% efficiency reduction, unless you could show an instantaneous pilot, proper sizing, short start-up and cool-down, thin wall heat exchanger with low thermal mass, and standard set point heating controls. You would need to obtain a copy of the seasonal or steady state efficiency test from the corn stove manufacturer.

When you submit the audit to your lender or to the Energy Office, you will also need to list a complete description of your existing system, including model numbers of your current heating and hot water heating units, and copies of your heating and cooling bills for the past year. You will also need to provide data to support efficiency ratings.

The heating value of corn at 15% moisture is 380,800 British thermal units per bushel. Claims of 504,000 btu's per bushel are for corn at 0% moisture only.
Q:
We plan to install geothermal heat and air conditioning in a recently purchased house, replacing the gas furnace and the air conditioner. Are any rebates available for this upgrade? I have contacted my local electric utility and they have provided me with rebates that they offer. I want to be sure that I'm not missing any rebates at a state or national level.
A:
There are no state rebate programs, but the Dollar and Energy Saving Loan Program is available for geothermal heat pumps that have a minimum COP of 3.0 and minimum EER of 13.0 (which is just about any heat pump manufactured). This is a low interest loan, maximum 5.0%, offered through 277 participating Nebraska lenders. Check with the bank of your choice in your area to see if they offer Dollar and Energy Saving Loans.

Under the loan program, you cannot obligate yourself or make a down payment for any type of improvement purchase prior to program approval by the Nebraska Energy Office. You need to get bids for the work you want to do and provide copies of those bids and any supporting documents to your participating Nebraska lender. The lender will then submit your application to the Nebraska Energy Office for review. More information on Dollar and Energy Saving Loans is available at the Energy Office’s web site.

You may also be eligible for a federal tax rebate. Proposed recommendations for this rebate are for 10% of the cost, up to $300, for a closed loop geothermal heat pump with a COP of 3.3 and an EER of 14.1, open loop geothermal heat pump with a COP of 3.6 and an EER of 16.2, and direct expansion heat pump with a COP of 3.5 and an EER of 15. For more information on this rebate, you will need to check the IRS web site. Final rules and regulations for these rebates have not been released.
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