MONTGOMERY— The AlabamaSAVES energy efficiency program sponsored by the Energy Division of the Alabama Department of Economic and Community Affairs (“ADECA”) completed a record number of 8 loans and $4.0 million in funding during the 4th quarter of last year, bringing total funding for the year to $15 million and making 2013 a record year for the program. Projects ranged from large industrial equipment and process improvements to HVAC and lighting upgrades and replacements, as well as a large commercial solar rooftop project on an industrial facility in Cullman. ADECA founded the AlabamaSAVES program to provide state businesses with low-cost loans for energy-efficiency upgrades and renewable energy projects in order to create jobs and make Alabama industry more competitive. The upgrades are expected to reduce operating expenses so that the energy savings exceed loan repayments, creating both a means for paying for the capital cost of the upgrades as well as extra cash flow for the business. Since awarding the first loan in June 2011, AlabamaSAVES has approved more than $25 million in loans for energy upgrades involved in 36 projects across the state. These projects are estimated to have created over 250 jobs and resulted in over 62,000 MWhs in annual energy savings and a reduction in 43,000 metric tons of carbon emissions.
ADECA Director Jim Byard Jr. said the program reached a milestone at year-end surpassing $25 million in funding. “Word is getting out that ADECA’s AlabamaSAVES program is a valuable resource for businesses seeking to increase their energy efficiency,” Byard said. “We look forward to helping more Alabama businesses reduce operating expenses and expand job opportunities for our residents.” ADECA established AlabamaSAVES with funds made available to the state by the U.S. Department of Energy’s State Energy Program. Loans of $50,000 to $4 million are available to help Alabama commercial and industrial businesses finance energy-saving improvements. Interest rates for the loans are currently as low as 1 percent. Projects are evaluated based on the potential for sustainable energy savings, cost savings, renewable energy generation, emissions reductions and job creation and retention.
A range of businesses across the state have taken advantage of AlabamaSAVES funding, including large and small industrial companies, distribution facilities, commercial office buildings, multi-family, hotels, retail businesses, and several agricultural projects. And an increasing number of financial institutions are taking advantage of AlabamaSAVES to subsidize the interest rate of loans they are making to customers to fund energy efficiency projects.
In the 4th quarter of 2013, the AlabamaSAVES program worked with Servis1st Bank to fund lighting upgrade projects for two of its customers to improve energy efficiency for operational savings and increased lighting for employee safety and productivity. In the case of MT Deason, funding was provided for a lighting upgrade at its distribution facility in Irondale. Ricky Hart, VP of Operations, said, “We are certainly beneficiaries of the AlabamaSAVES objective and are both pleased and excited with the technology and we look forward to reaping the benefits of future energy cost savings.” And in the case of Stiver’s Ford, funding was provided to upgrade the lighting and HVAC systems and building envelope at its car dealership in Montgomery. Eddie Stivers, President of Stiver’s Ford, said, “The AlabamaSAVES program has been fantastic. The remodeling of our Montgomery Ford Lincoln and Mazda facility will truly be complemented by improving its carbon footprint and reducing energy consumption and operating costs. Without the AlabamaSAVES program we might not have gone as far to ensure the most energy efficient facility possible. The AlabamaSAVES program is easy to utilize and welcomed by our local financial institution, Servis1st Bank. We know that our business will benefit from the program for many years to come.”
Also during the 3rd and 4th quarters of 2013, the AlabamaSAVES program worked with People’s Bank, Regions, Auburn Bank, and Bryant Bank to fund a range of energy efficiency projects for their customers. In the case of People’s Bank, AlabamaSAVES subsidized a loan to Apel Steel for the installation at its steel manufacturing plant in Cullman of a 360kw solar system which will offset the facility’s energy demand and costs. Ronny Apel, President of Apel Steel, said, “The AlabamaSAVES Program has been a key driver in decreasing our energy costs and increasing energy savings to be used in our operational budget. Our renewable energy goals will now be met in part because of the low interest rate provided by the program.” Regions provided funding to St. Paul’s Episcopal School for upgrading the lighting, HVAC, controls and plumbing in the PreK-12 buildings on its campus in Mobile, which measures are projected to significantly decrease energy and water consumption.
Abundant Power, which is focused on providing transformative financial and technology solutions for energy efficiency in the built environment, serves as administrator to ADECA on the AlabamaSAVES program. Abundant has been instrumental in increasing the initial loan pool from $25 million to $65 million by forming partnerships over the life of the program to date with 16 private banks and lenders, including funding provided for loans closed over 2013 with Regions, Servis1st, DLL, First Commercial Bank, Bryant Bank, People’s Bank, Auburn Bank, Trustmark Bank, Progress Bank and National Bank of Commerce. “AlabamaSAVES uses public funds with private capital to maximize energy costs savings through the program” said Shannon Smith, CEO of Abundant Power. “We expanded the capital base in 2013 through leveraging an increasing number of private lenders in the program and we are looking to continue expanding our relationships with the lending community by inviting additional lenders to participate in the program in 2014. This enables more businesses to participate in the program, creating more jobs, accelerating energy savings and reducing dependence on fossil fuels,” Abundant Power brings a unique blend of expertise in finance, engineering, building science, technology and real estate to each of its financing products and programs.
ADECA recently announced that businesses wanting to convert their fleet vehicles to run on propane, liquefied natural gas or compressed natural gas would be eligible for AlabamaSAVES loans. The alternative fuels cost less and produce fewer emissions than traditional gasoline or diesel fuel. Loans can cover the costs of converting existing vehicles to run on the alternative fuels and the installation of fuel pumps and other infrastructure needed to provide the new fuels. AlabamaSAVES is underwriting its first alternative fuel conversion projects with the expectation of funding the same in the first half of 2014.
Alabama businesses and financial institutions interested in participating in the AlabamaSAVES program can find more information at AlabamaSAVES.com.