The Department of Energy is making every effort to support renewable energy projects. In addition to the grants and contests they offer, the DOE is offering up to $10 billion in loan guarantees for energy efficiency and renewable energy projects.

The $10 billion in loan guarantees are actually part of a larger package that the DOE has put together to fund a variety of energy initiatives. The total package is $30.5 billion, with $18.5 billion for nuclear power projects and addition $2 billion specifically earmarked for advanced nuclear power projects working on the “front-end” of the nuclear fuel cycle. The DOE will also be funding as much as $8 billion for fossil energy projects over the course of the summer. All funded projects are expected to “ avoid, reduce or sequester air pollutants or greenhouse gas emissions.”

The DOE is looking to fund the following categories of projects with the new renewable energy loan guarantees:

• biomass
• geothermal
• solar
• wind
• hydropower
• alternative fuels

According to a statement from the Acting Deputy Secretary of Energy, Jeffrey F. Kupfer, the loan guarantees will "enable project developers to bridge the financing gap between pilot and demonstration projects to full commercially viable projects that employ new or significantly improved energy technologies." The program grew out of President George W. Bush’s drive for diversified energy sources.

The DOE’s loan guarantee process is divided into four separate phases:

1. application
2. project evaluation
3. conditional commitment
4. final approval

The DOE is accepting applications now. Projects that can be commercialized in the near future have a better chance of receiving funding, as do those projects with good prospects for repaying their loans. Long-term potential is also crucial — the DOE is not looking for stopgap measures that can only help stave off a true transition. More information about applying for a guaranteed loan is available through the DOE website.

This program will be especially beneficial for projects unable to find funding through more traditional sources, such as business loans or research grants. Many of the projects that the DOE loan guarantee program will fund would otherwise shutdown because of a lack of money. These are still valuable projects — they just fall outside the boundaries of typical funding plans. They are also selected with consideration for their future abilities to repay loans, promising future support for projects with similar challenges. The loan guarantee program shows a great deal of potential.

Image — DOE