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Renewable Energy and Energy Efficiency Loans

Ocean Bank - New Hampshire

As Director of the State of New Hampshire’s New Hampshire Business Resource Center, Roy Duddy is charged with the duty of helping New Hampshire companies to grow and thrive, as well as to recruit new businesses to the state.

Keeping in line with this, Duddy is constantly thinking about how to make New Hampshire businesses more competitive. In 2006, he came up with the idea of starting a low interest energy efficiency business loan program. He consulted Pat McDermott of Public Service of New Hampshire (PSNH).

According to McDermott, PSNH and the other major utilities in New Hampshire had already developed rebate programs under the guidance of the New Hampshire Public Utilities Commission to encourage energy efficiency improvements. McDermott and Duddy arrived at the concept that a low interest energy efficiency loan combined with the existing rebate programs would allow companies to install energy efficiency measures, use the rebate as the down payment, and the energy savings to pay off the loan.

Project Steps:

1. Duddy approached several banks with his idea. Danny O’Brien, Ocean Bank’s President and Chief Executive Officer, was the most receptive to the idea and enthusiastically committed Ocean Bank to the project.
2. O’Brien and Janet Brewer, Ocean Bank’s VP of Commercial Lending, drafted a proposed structure for the loan program (rate, terms, etc.) and set aside funds for the program.
3. Bank representatives met with the utilities to unveil the anticipated program and to solicit their input. The "easy" fits for the program are those improvements that qualify for rebates -- generally, lighting projects and refrigeration projects, as they involve the greatest energy savings and highest rebate.

Ocean Bank has built in enough flexibility, though, to include any other type of project. If no rebate is available, Ocean Bank will grant the loan if the business provides a 20% down payment. The loan is structured such that the rebate is substituted for aconventional down payment (even though it comes at the end of the project)and the monthly payment is set so that the projected monthly energy savings more than cover the loan payment.

Finding common interest, the program was finalized and announced in the Governor's office.

• The Renewable Energy and Energy Efficiency Loan may be used for lighting upgrades, HVAC upgrades, the purchase of energy efficient motors, and the development of on-site electricity generation from renewable energy systems.
• Terms include an interest rate of prime minus 1 percent, floating, for a maximum of seven years, subject to credit approval and the findings of an energy efficiency review. The rate is targeted to energy loans of $10,000 or more.
• Currently, PSNH (or one of the other utilities) conducts an energy review and determines the level of rebate the project qualifies for and what the proposed energy savings will be.

Costs and Savings:
From Ocean Bank

Electricity distribution companies in New Hampshire collect a charge – the Systems Benefit Charge (SBC) – on consumers’ bills to pay for certain public benefits such as low-income assistance and energy efficiency. Under this program a business may not need to put any of its own funds into energy efficiency improvements up front. Generally, the construction vendor will take an assignment of a rebate from a utility company – approximately 20 percent of the project cost – and the bank will finance the balance. The business then reaps the benefit of ongoing savings in its energy bills.

Participating businesses are eligible for a free energy efficiency review from the New Hampshire Office of Energy and Planning.

Contacts:

Roy Duddy, Director
New Hampshire Business Resource Center
P.O. Box 1856, 172 Pembroke Road
Concord, NH 03302-1856
Phone: (603) 271-2591
Fax: (603) 271-6784
r.duddy@dred.state.nh.us

Janet Brewer, Vice President, Director of Community Development
Ocean Bank
35 Main Street, P.O. Box 552
Peterborough, NH 03458
Phone: (603)924-1207
Fax: (603)924-2238
jbrewer@eOcean.com

Pat McDermott, Economic & Community Development Manager
Public Service of New Hampshire
Phone: (603) 634-2386
mcderpf@psnh.com

Information & Downloads to Use as Templates:

Renewable Energy and Energy Efficiency Loan Brochure

Ocean Bank Press Release

Links:

Ocean Bank

New Hampshire Business Resource Center

Public Service of New Hampshire

New Hampshire Public Utilities Commission

Nashua, New Hampshire, Revolving Trust Fund