As reported in SNJ Business People

06/02/09

The second solicitation for financing by the State of New Jersey under the Clean Energy Manufacturing Fund began on June 1. The recently launched program was specifically designed to support companies looking to site or materially expand a Class I renewable energy or energy-efficient product manufacturing facility in New Jersey, and will enable the state to take a leadership role in the clean technology industry by promoting new green jobs and growth while addressing the goals of Governor Jon S. Corzine’s Energy Master Plan. The program is funded by the New Jersey Board of Public Utilities (BPU) and administered through the New Jersey Economic Development Authority. The solicitation period opened June 1, and is scheduled to close on July 15.

 “The Clean Energy Manufacturing Fund will contribute greatly to the cost-competitiveness of renewable energy and energy efficiency in New Jersey while also supporting the creation of green collar jobs in the Garden State,” said Caren S. Franzini, chief executive officer of the EDA.

 “Our continued partnership with the EDA will create jobs, ensure energy security and help achieve Governor Corzine’s mandate to reduce greenhouse gas emissions and combat global warming,” added BPU Board President Jeanne M. Fox.

Through the Clean Energy Manufacturing Fund, New Jersey clean technology manufacturers can receive funding under two separate components: project assessment and design, and project construction and operation. In total, a qualified manufacturer of Class I renewable energy or energy efficiency systems, products or technologies may be eligible to receive up to $3.3 million in grants and interest-free loans. Up to $300,000 is available as a grant to assist with the manufacturing site identification and procurement, design, and permits. Up to $3 million is available as a zero-interest, ten-year loan to support site improvements, equipment purchases, and facility construction and completion.

To take advantage of this program, a company must be a for-profit entity that is planning to manufacture eligible products in New Jersey and be entering or expanding within the manufacturing stage of commercial development. A minimum 50-percent cash match of total project costs from non-state grants, loans, or equity, is required for both program components. Preference will be given to those projects that demonstrate a greater percentage of the project being designed, manufactured, processed, assembled or made ready for commercial sale at the company’s project facility in New Jersey. Eligible technologies for funding include energy efficiency equipment and technology, Class I renewable energy and other technologies or equipment that can demonstrate their integral nature to the development of Class I renewable energy and energy efficiency technologies. Class I renewable energy is defined as electricity derived from solar energy, wind energy, wave or tidal action, geothermal energy, landfill gas, anaerobic digestion, fuel cells using renewable fuels, and, with written permission of the New Jersey Department of Environmental Protection (DEP), certain other forms of sustainable biomass.

To learn more about the Clean Energy Manufacturing Fund, call 866-534-7789 or visit www.njeda.com\CEMFApplication.

As reported in

The Executive’s Daily Green Briefing

A new loan process from the Department of Energy could jump-start the alternative energy business, observers say.

Under the Obama Administration, energy companies can expect a quicker response to loan requests, in stark contrast to a process that tended to bog down in recent years.

As part of the new economic stimulus, Energy Secretary Steven Chu is revamping the Department of Energy’s method for dispersing direct loans, loan guarantees and funding aspects of the recovery plan. Chu wants to expedite disbursement of funds to begin investments in a new energy economy, putting millions of Americans back to work, according to a DOE press release.

Govi Rao, chief executive officer of Lighting Science Group Corp., Westampton, N.J., welcomed the news.

“DOE has been proactive in funding cleantech companies like ours,” Rao said. “But by reducing the bureaucracy and paperwork, the process should be much simpler now.”

In the press release, Chu said, “These changes will bring a new urgency to investments that will put Americans back to work, reduce our dangerous dependence on foreign oil, and improve the environment. We need to start this work in a matter of months, not years – while insisting on the highest standard of accountability.”

As an example of how critics say the loan process is broken, Massachusetts-based Beacon Power Co. has been waiting 25 months for a $50 million loan guarantee toward an electricity-storage plant, according to WSJOnline.com.

As part of the approval process, so far Beacon has supplied DOE with 96 documents, including a draft 87-page environmental-impact study for the proposed two-acre site, according to the article.

By reducing paperwork and processing applications on a “rolling basis,”  the Department of Energy aims to emulate the way private industry quickly finances projects. Among other things, according to the release, the department plans to:

  • Offer loan guarantees under the Department’s previous loan guarantee program beginning in late April or early May.
  • Begin offering loan guarantees under the stimulus by early summer.
  • Distribute 70 percent of the stimulus dollars by the end of next year.

Some other aspects of Chu’s approach may appeal to companies, including the department offering applicants the opportunity to pay fees as part of closing, instead of up-front when applying. Additionally, Chu plans to further reduce up-front costs by having credit subsidies paid over the life of the loan.

The Department of Energy is not offering a free ride, however. Companies receiving loans in most cases will have to come up some earnest money on their own.

A spokesman for DOE said it’s too soon to know how much the announcement will affect the number of loan applications.

Rao expects Lighting Science will apply for a loan in connection with a proposed factory in New Jersey, which has been courting the company.

Lighting Science designs, develops and manufactures light engines, plug and play fixtures, screw-based lamps and custom projects. It has operations in Florida, California, New Jersey and Europe. In addition to consumer uses, it specializes in so-called “architainment,” or the mixture of architecture and lighting for entertainment. One of its more famous projects is the Times Square Ball.

While at a previous company, Rao applied for a DOE loan, he said, adding, “It was tedious. It involved extensive documentation and took almost a year. That was understandable to a degree, but I’m looking for it to change.”

Rao said he expects the Obama Administration to deliver more good news for the cleantech sector.

“In general, the Obama administration will result in positive results not only for companies like ours but for the entire energy chain,” he said. “It changes the paradigm for energy production in this country. As we transition to solar, wind and LED lighting, it will take time to overcome the barriers.”