The Nebraska Energy Quarterly features
questions asked about 5% Dollar and
Energy Saving Loans. Loan forms may
be obtained from participating lenders or the
Energy Office, or at the agency's web site.

Loans as of September 30, 2000:
16,906 for $125.8 million

   Questions and Answers...

   5% Dollar and Energy Saving Loans

The Energy Office recently revised its requirement that new ductwork financed with a 5 percent loan be "installed with gaskets or mastic in accordance with manufacturer's installation instructions.  Duct tape is not permitted."  Why was this requirement added and what are the associated energy savings benefits?

The requirement was added because the 2000 International Energy Conservation Code states "Low-pressure duct systems:  All longitudinal and transverse joints, seams and connections of low-pressure supply and return ducts shall be securely fastened and sealed with welds, gaskets, mastic (adhesives), mastic-plus-embedded-fabric systems or tapes installed in accordance with the manufacturer's installation instructions." The Code also stipulates "Duct tape is not permitted as a sealant on any ducts." 

The Energy Office's 5 percent loans are used to promote high efficiency, energy saving products and technologies.  To achieve those ideals, standards are constantly updated to ensure code requirements are met or exceeded.

Ducts are an integral part of a home's comfort delivery system, carrying cool air in the summer and heated air in the winter.  When the system works well, the home and its occupants are kept comfortable.  Building inspectors in several states, including Nebraska, have routinely found instances where sections of ducts were never installed, connected or had broken or fallen away completely leaving gaps in the system.  A properly assembled system requires the ductwork to be well connected, attached and sealed.  National tests indicate a 10-15 percent energy savings for properly sealed ductwork in retrofit work and during new construction.

Are below market rate mortgages still available for the construction of new, single family homes built

Mortgage loans are available at one percent below Freddie Mac rates for new homes in rural Nebraska that are built 30 percent above the requirements of the 1995 Model Energy Code and are completed before June 30, 2001. 

Rural counties are defined as all counties in Nebraska except Douglas, Lancaster, Sarpy, Washington and Cass. 

Construction loans are available through all participating lenders.  Permanent mortgages can be arranged through Security Federal in Lincoln.

A Dollar and Energy Saving Loan is being used to purchase and install a new exterior door and storm door.  Since the doors are nonstandard in size, they must be special ordered.  The dealer is requiring a down-payment of half the cost of the doors at the time the order is placed.  Will loan eligibility be lost if this down-payment is made BEFORE the loan is approved?

If the down-payment is refundable, loan eligibility would not lost.  With these loans, borrowers may not contractually obligate themselves to have the improvement made before a loan is approved.

In this situation, since the doors must be custom-made it is probable the down-payment would not be refundable.

In this case, the bid for the new custom-made doors would have to indicate any down-payment received would have be refundable, if the project was not approved for financing. 

A number of atypical projects have been financed with Dollar and Energy Savings Loans such as a corn-fueled stove, several types of wood stoves and repairs to wind generators.   How do you know if an improvement can be financed with a Dollar and Energy Saving Loan? 

For less common types of improvements, an energy analysis is needed to demonstrate dollars saved from the improvement will more than offset the cost of the improvement.  Here's how to find out if the improvement can be financed with a loan:                

1. First, get a bid for the energy improvement project you want to make.

2. Next, get loan forms #32 and #33.  (These forms are available from the Energy Office, a participating lender or from the agency's web site: 
  Form 32 at and  Form 33

3. Gather your energy bills from last year and calculate the amount of energy used by the equipment to be replaced.

4. Estimate your energy bills for that same task(s), if you were to complete the planned energy improvement, using last year's energy prices.

5. Subtract the amount of energy dollars you will spend next year if you make the improvements from the amount of energy dollars you spent last year.  The difference is what you will save.

6. Now divide your energy project's total cost by the amount of energy dollars you will save next year.  This is the simple payback or number of years it will take to pay back the loan.  This number will need to be less than or equal to the number of years for the following types of projects:

What information will be needed when applying for a Dollar and Energy Saving Loan using an energy audit?

1. Copies of actual energy bills for fuel and electricity for the previous 12 months.
2. Copy of bid(s) for the planned energy improvements, which include installation costs.
3. Completed Form 32 -- Energy Saving Improvement and Analysis -- and Form 33 -- Energy Billing History
4. Technical data supporting the proposed energy savings needed for review of the project.  Technical data can include your calculations, any product bids and specifications, disposition of old equipment and other similar items.  Irrigation projects usually require additional information.

How do
and Energy Saving Loan?

Replacement windows and doors must qualify in one of two ways: either by the window/door tested total "R" or "U" value ratings or by construction features. 

For windows and patio doors, the "R" value must be equal or greater than 2.86 or the "U" value must be less than or equal to 0.35.  For doors, the "R" value must be equal or greater than 4.0 or the "U" value must be less than or equal to 0.25. 

The "R" or "U" value for the new window or door must be a tested value, not computed or simulated.  The value must be verified by providing a copy of the test report or a copy of a National Fenestration Rating Council tag (available from the dealer or manufacturer).  The stated "R" or "U" value is for the total window or door unit as opposed to "center of glass" values.

U Value
Btus per hour

Square feet of Area

Degrees Fahrenheit
=U Value

"R" and "U" values tell how much heat will flow through a structure, such as a window.  The units of the "U" value are British thermal units (Btus) per hour per square feet per  degrees fahrenheit or in other words, how much heat in British thermal units will pass through one square foot of a structure, in one hour, for each degree of temperature difference measured from the inside to the outside of the building.  For instance, a one square foot window with Council sticker "U" value of 0.25 with the temperature outside of 63 and the inside temperature of 73 will lose 0.25 times the temperature difference of 10 degrees (73-63) or 2.5 British thermal units every hour.  

The "R" value is simply the inverse of the "U" value or 1 divided by "U."   So if you have a "U" value of 0.25, the "R" value will be 1 divided by 0.25 or R-4.0.  "R" value units then are 1 hour, times square feet of area, times Degrees Fahrenheit divided by Btu.

R Value
Degrees Fahrenheit
Square feet of Area

Btus per hour
(or X Hours per Btu)
=R Value

The bid for the replacement windows or doors and Form 2 must also indicate a brand and model number, which coincide with the brand and model number on the test report or Council's tag.  For instance, a bid or Form 2 for replacing double-hung windows cannot be verified with a test or NFRC tag for an entirely different window, such as a casement.  Also a test report or Council tag for a solid door cannot be used to verify a door which has a half lite or side windows.

If a test report or Council tag are not available for a particular brand or model, the window or door may qualify based on construction features.  In this event, the bid or Form 2 must detail the construction features or indicate a brand and model number which coincide with brand and model numbers on supporting company literature which shows the construction features.

Construction feature requirements for windows include:
1. A minimum of two panes of glass.
2. At least one of the two panes of glass must have a low-e coating.
3. The window must be gas-filled with Argon, Krypton, Carbon Dioxide, SF6 or some combination of these.
4. The frame must be made of wood, vinyl or aluminum.  If the frame is made of aluminum, it must be thermally broken.

Construction feature requirements for doors include:
1. The core material in the door must have an insulating value of at least  R-8.0.
2. Any lite in the door must be double-glazed and cover no more than 10 percent of the door surface area.

Return to the Winter 2000 Newsletter