You are here

Renewable Energy & Efficient Energy Projects Solicitation FAQ

FAQs 

Can parties interested in the solicitation meet with representatives of the Loan Programs Office (“LPO”)?

LPO intends to have several seminars and webinars that will be open to the public to discuss the solicitation. LPO personnel may have discussions and meetings with potential applicants and their representatives and advisors. You should email LPO.REEESolicitation.Questions@hq.doe.gov to request such a meeting. However, there will be restrictions on the content of any of those discussions. For example, LPO personnel can provide guidance that is publicly available to all other potential applicants and their representatives and advisors. However, except as noted below, personnel cannot discuss specific projects prior to the submission of an application. Any discussion of a potential application must be limited to logistical guidance and publicly available information. The NEPA team of the Loan Programs Office can discuss specific projects only with respect to NEPA issues.

What are the application dates for the solicitation and how many rounds will there be?

As with earlier solicitations, the Renewable Energy and Efficient Energy Projects Solicitation consists of a two-step process with multiple deadlines. The Part I and Part II application submission schedule is as follows:

Part I Due Dates
Round 1 - October 1, 2014
Round 2 - December 3, 2014
Round 3 - April 1, 2015
Round 4 - August 5, 2015
Round 5 - December 2, 2015

Part II Due Dates
Round 1 - January 14, 2015
Round 2 - March 11, 2015
Round 3 - July 1, 2015
Round 4 - November 4, 2015
Round 5 - March 2, 2016

Additional rounds may be announced in a supplement to the solicitation.

How much of the project costs will DOE guarantee?

Title XVII of the Energy Policy Act of 2005 allows DOE to guarantee up to 80% of the eligible project costs of a project. Applicants should not expect that DOE will guarantee 80% of the eligible project costs of a project. The amount of senior debt that a particular project can support, after conducting due diligence, will be the key determinant of overall senior debt leverage. Furthermore, DOE’s intent is to leverage its support by maximizing the amount of co-lending by private sector senior lenders.

Who will pay the credit subsidy cost?

LPO has received $169 million in appropriated credit subsidy for renewable energy and efficient energy projects. For a Qualifying Project the portion of the credit subsidy cost that DOE will pay is the amount of the credit subsidy cost that is above seven percent (7%), up to a total of $17,000,000. In all cases the applicant will pay the amount of the credit subsidy cost that is seven percent (7%) or less.

How is the credit subsidy cost calculated?

Credit subsidy cost is a reserve established by the U.S. government to cover the risk of estimated shortfalls in loan repayments. It was established by the Federal Credit Reform Act of 1990 (“FCRA”) and represents the net present value of the estimated long-term cost to the U.S. government of the loan guarantee. Credit subsidy cost is primarily influenced by two key variables: Probability of default; and The “recovery” after default. These variables are used to “risk adjust” the borrower’s principal and interest payments to the government, and provide an estimate of payment shortfalls. Section 1702(b) of Title XVII provides that DOE must receive either an appropriation for the credit subsidy cost of a loan guarantee or, in lieu of an appropriation, a cash payment of such cost directly from the applicant.

Is there a minimum size of a loan guarantee?

No. LPO has offered conditional commitments for loan guarantees on projects for which total project costs are expected to be less than $25 million. However, currently there are no special provisions for small business participation in the loan programs, and the application, due diligence, negotiation, and approval processes are time and capital-intensive.

Can a U.S. state or local government apply?

Yes. However (subject to limited exceptions) DOE will not be able to issue loan guarantees to projects that will benefit directly or indirectly from certain other forms of federal support, such as grants or other loan guarantees from federal agencies or entities (including DOE), Federal agencies or entities as a customer or off-taker of the project’s products or services, or other federal contracts, including acquisitions, leases and other arrangements, that support the project. Applicants are strongly encouraged to consult with DOE representatives for further guidance.

Does NEPA apply to DOE loan guarantees?

DOE’s loan guarantees are considered major Federal actions and are subject to NEPA review. NEPA compliance is integrated into LPO’s decision-making procedures to ensure that environmental impacts are considered throughout the loan guarantee process. The NEPA review must be completed before a loan guarantee can be issued.

Does the Davis Bacon Act apply?

Yes. Please refer to our general Q&A page for more details about Davis Bacon Act requirements

How will greenhouse gas reductions be calculated for commodity-based projects?

The solicitation requires that each project “avoids, reduces, or sequesters anthropogenic emission of greenhouse gases” in order to be eligible, consistent with the requirement of Title XVII. To determine whether or not each a project meets this requirement, LPO intends to conduct a Life Cycle Assessment (LCA) of each project’s GHG impact. LCA is a proven and industry-accepted practice of quantifying the full environmental impact of a product or process, and assessing that environmental impact relative to a baseline.
LPO will use a “cradle-to-grave” approach in conducting each LCA, referring to the assessment of emissions pertaining to the extraction of raw materials from the earth, raw material transport, the facility or project, product transportation and distribution, and product end use. LPO has consulted extensively with LCA experts from the National Energy Technology Laboratory’s (NETL) Energy Analysis Division and referred to International Organization for Standardization (ISO) 14040 (“Life cycle assessment – Principles and framework”) and ISO 14044 (“Life cycle assessment – Requirements and guidelines”) standards in developing an approach to assessing the GHG impact of proposed projects. This approach intends to conform to industry accepted standards and methodologies for conducting LCA analyses. The procedures and guidelines set forth in these standards are widely used in industry and the federal government to conduct similar analyses and inform decision-making.