According to a recent announcement from the office of New York Gov. Kathy Hochul, significant progress has been made in accelerating the financing of large-scale renewable energy projects. The United States Department of Energy (DOE) and the New York State Energy Research and Development Authority (NYSERDA) have entered into a memorandum of understanding (MOU) to facilitate clean energy financing. This partnership aims to strengthen cooperation between federal and state energy departments and pave the way for a clear path forward towards clean energy goals.

Governor Hochul expressed the urgency of the partnership, stating, “This new collaboration between New York State and the U.S. Department of Energy demonstrates a shared belief that time is of the essence. We must forge ahead in creating a sustainable future through clean energy initiatives.”

Under this MOU, NYSERDA and DOE have established a streamlined process for reviewing applications from utility-scale solar, onshore and offshore wind projects seeking financing through the DOE Loan Programs Office (LPO). This includes projects already under contract with NYSERDA, as well as future projects that will be contracted with NYSERDA.

Through the Title 17 Loan Guarantee Program, the LPO has the capacity, with the necessary credit approvals, to provide financing for eligible projects, covering up to 80% of eligible project costs. The tenor of the financing will be determined based on project requirements and anticipated asset lifespan, with a maximum term of 30 years.

The partnership between NYSERDA and DOE presents an opportunity for clean energy projects in New York to access alternative financing options, particularly in light of the current inflationary and high-interest-rate environment. By tapping into LPO loans, projects could unlock potential cost savings that can be shared with New York State ratepayers, potentially leading to billions of dollars in savings.

Under the Title 17 Clean Energy Financing Program, the DOE’s LPO is authorized to finance projects across the United States that support the deployment of clean energy and reinvestment in energy infrastructure to reduce greenhouse gas emissions and air pollution.

The Title 17 program, established under the Energy Policy Act of 2005 and subsequently amended twice, has expanded its scope to encompass state-supported projects and projects that reinvest in existing energy infrastructure. It leverages additional loan authority and funding for projects involving innovative energy technologies.

The program includes four project categories:

1. Innovative Energy: Projects that utilize new or significantly improved technology proven but not yet widely commercialized in the U.S.

2. Innovative Supply Chain: Projects that incorporate new or significantly improved technology in the manufacturing process for a qualifying clean energy technology, or projects involved in manufacturing such technology.

3. State Energy Financing Institution (SEFI)-Supported: Projects that receive substantial financial support or credit enhancements from an entity within a state agency or financing authority to fund the deployment of qualifying clean energy technology.

4. Energy Infrastructure Reinvestment (EIR): Projects that undertake the retooling, repowering, repurposing, or replacement of energy infrastructure that is no longer in operation, or upgrading operating energy infrastructure to avoid, reduce, utilize, or sequester air pollutants or greenhouse gas emissions.

The MOU between NYSERDA and DOE is a significant development in the pursuit of large-scale renewable projects in New York State. By leveraging the resources of the DOE Loan Programs Office, this partnership aims to accelerate the transition towards clean energy initiatives, while potentially yielding substantial cost savings that can benefit ratepayers and contribute to a cleaner and more sustainable future.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The solar energy market is highly volatile, and readers should conduct thorough research before making any investment decisions.