Funding for Green Building Projects

The following is a summary of available incentives for specific types of green building projects.  Many varied sources of financing, tax incentives, grants and foundation programs exist to encourage the development and renovation of green buildings.  Some of these are geographically targeted, while others are specific to certain constituencies such as business, non-profit and/or government.  Still others are geared towards a particular industry or green building use.

Local and Regional Programs and Incentives

City of Pittsburgh, Sustainable Development Bonuses (search “Sustainable Development Bonuses”)
Pittsburgh’s zoning code permits an additional 20% in floor area ratio and height for buildings that achieve LEED New Construction or LEED Core and Shell certification.

Colcom Foundation
This Pittsburgh-based foundation provides grants for programs and projects that enhance environmental sustainability, natural resource protection, and land and water conservation.

East End Food Credit Union Co-op Green Loan
This credit union offers a loan at 2% below the current rate for environmental purchases such as efficient light bulbs and appliances, weatherization improvements and Port Authority Transit passes.

Green Building Fund
This fund was created by Bridgeway Capital to assist building owners and developers with the implementation of green building practices.  It offers short-term (typically five-year) loans with interest rates ranging from 5% to 8% for qualified developers to integrate green design into either new construction or rehabilitation projects.  LEED certification is required.  

Penelec Sustainable Energy Fund
The Community Foundation for the Alleghenies provides loans and grants to companies that use renewable energy, conduct a business that enhances energy efficiency and conservation, or develop sustainable energy technologies.  Funds can be used for projects that are located in or provide services to First Energy’s Penelec territory, which includes Bedford, Somerset, Cambria and Indiana Counties.

Richard King Mellon Foundation
This foundation awards grants that contribute to improvements in five program areas in Southwestern Pennsylvania, including conservation; regional economic development; children, youth and young adults; education; and human services and nonprofit capacity-building.

TRF Capital Sustainable Energy Financing
TRF provides favorable financing for new LEED-certified residential construction, energy-efficient renovations of residential properties, renewable energy projects, and energy-efficient retrofits and equipment upgrades to businesses in the Mid-Atlantic region.

The Heinz Endowments
The Endowments award grants in five program areas, including arts and culture; children, youth and families; education; environment; and innovation economy.  The environment program funds projects and programs that improve the local environment by reducing the damage of unsustainable practices.  The Endowments maintain a green building policy whereby any capital improvement project that it funds through any of its five program areas must, if at all feasible, secure at least LEED Silver certification.

The Upstairs Fund
The Pittsburgh Downtown Partnership offers subordinated gap financing to developers or owners who convert upper floors of downtown buildings to residential uses and seek LEED certification.  Financing is available for up to 50% of the total project cost, not to exceed $500,000 or $75,000 per unit.

Urban Redevelopment Authority of Pittsburgh, Green Design Initiatives and Incentives
The URA offers lower interest rates on several of its loan funds for projects that achieve LEED certification.  The interest rate reduction increases with the level of certification achieved and ranges from 1% to 2.5% below program rates.

West Penn Power Sustainable Energy Fund
The Energy Fund offers commercial loans, equity investments and subordinated debt for the development of emerging sustainable energy technologies.  Its prime goal is to attract new companies to Pennsylvania and all applying projects must be located in the West Penn Power Service Area.

Pennsylvania Programs and Incentives

Alternative and Clean Energy Program
Grants and loans are provided through this program for the installation of alternative energy systems and the construction or development of alternative energy production projects.  Loans of up to $5 million or 50% of the total project cost are offered with an amortization of 25 years and a 10-year term.  Grants of up to $2 million (not to exceed 50% of the total project cost) are available.

Alternative Fuels Incentive Grant
This program is intended to assist in the creation of new markets for biofuels in the state.  Funding related to biofuel conversion is available for companies, school districts, municipalities and non-profit organizations.  The grant also provides support to qualified renewable fuel producers of up to five cents per gallon.  NOTE:  This program is currently closed to new applications.

Energy Harvest Grant Program
This initiative provides grants for proposals that simultaneously reduce or supplement the use of conventional energy sources and lead to improvements in water or air quality.  Grants can be made to non-profits, county and municipal governments, school districts, and colleges and universities.  NOTE:  Annual application periods usually begin in the spring of each year.

Growing Greener
Projects that enhance the environment in the state may receive capital improvement funding from this program.  Eligible applicants include local governments, counties, authorities and non-profits.

High Performance Green Schools Planning Grant
This grant covers the soft costs of designing a green building that are not typically included in the conventional design structure.  Such costs include those related to simulation, modeling, additional consultancy and documentation.  Grant amounts have averaged $25,000.

Keystone Home Energy Loan Program (HELP)
HELP offers secured and unsecured financing for energy-efficient home improvements to Pennsylvania homeowners.  Available loans range from $1,000 to $35,000, with terms from three to twenty years and rates from 6.375% to 8.99%.

Pennsylvania Economic Development Financing Authority (and here)
PEDFA can issue tax-exempt and taxable bonds for land, buildings, equipment, working capital or refinancing for energy projects.  Loans range in size from $400,000 to over $10 million.  Interest rates range from approximately 46% of prime (tax-exempt) to 61% of prime (taxable).

Pennsylvania Energy Development Authority
Grants of up to $1.5 million are given through PEDA for clean, advanced energy and energy efficiency programs, and to businesses interested in locating or expanding their alternative energy manufacturing or production facilities in the state.  Eligible applicants include private businesses, non-profits, colleges and universities, and municipalities, authorities and municipal corporations.  The 2009 application period ended May 29.

Pennsylvania High Performance Building Program
This program provides grants and loans for the construction or renovation of high performance buildings.  Both residential and commercial projects are eligible, with grants available up to $500,000 or 10% of the total project cost.  Loans of up to $2 million for small businesses (less than 100 employees) and up to $100,000 for residential projects are also available.  Amortizations can be structured to a maximum of 25 years and a 10-year loan term.  The current interest rate is 4%.  All projects must achieve LEED Gold certification and include specific credits. Program funds can be used for any costs associated with the construction or renovation of a high performance building, excluding financing fees and interest.

Pennsylvania Machinery and Equipment Loan Fund
This loan fund provides low-interest financing for the acquisition or upgrading of new or used machinery and equipment.  Up to 50% or $5 million of project costs can be financed through the program.

Pennsylvania Renewable Energy Program, Geothermal and Wind Projects
Through this program, grants and loans are available for businesses (including not-for-profits), economic development organizations, and municipalities and counties to finance geothermal systems and wind energy generation or distribution projects.  Funds are also available to manufacturers of renewable energy generation equipment.  The amount of the matching investment must be at least $1 for every $1 of program funds, with grants not exceeding $1 million.  Up to $5 million can be secured as a loan.

Pennsylvania Sunshine Program
Through this program, grants are provided to homeowners and small businesses for the reimbursement of costs associated with the purchase and installation of solar PV and solar thermal projects. 

Pennsylvania Venture Capital Investment Program
Designed for growth-stage financing, this program provides funds to venture capital firms to invest in Pennsylvania companies. 

Small Business Energy Efficiency Grant Program
Reimbursement grants of 25% (up to $25,000) are provided to small businesses (less than 100 employees) for the purchase and installation of energy-efficient items and systems such as geothermal heat pumps, energy-efficient HVAC systems, lighting and insulation.

Small Business Pollution Prevention
The Pennsylvania Department of Environmental Protection provides low-interest loans to small businesses undertaking projects that reduce waste, pollution or energy use.  Loans can be used to fund 75% of the total eligible project cost, up to a maximum of $100,000.  Loan interest rates are 2%, with a maximum 10-year term.

Solar Energy Program
Through this program, loans of up to $5 million are provided to solar energy generation equipment component manufacturers and energy distribution projects.  Grants of up to $1 million are also offered for these same manufacturers and ventures, as well as solar research and development and solar thermal projects.  Additionally, the program provides grant funding for solar energy planning and feasibility studies of up to $175,000.  Eligible applicants include businesses, economic development organizations and political subdivisions.

National

Bridgemer Investment Properties
This company provides debt and equity financing for new or renovated green buildings.

Energy Efficient Mortgage (EEM)
This mortgage for a new or existing home credits the structure’s energy efficiency in calculating its debt-to-income and housing-expense-to-income ratios.  Several federal agencies including the Federal Housing Administration and Veterans Administration offer these mortgages, as do some private and conventional lenders who guarantee them through Fannie Mae or Freddie Mac.

Enterprise Community Partner’s Green Communities
This program provides grants, financing, tax credit equity and technical assistance to developers to create environmentally friendly affordable housing.

Federal Business Energy Tax Credit
This corporate tax credit is for the purchase and installation of renewable energy systems.  A 30% credit is available for solar or wind turbines and a 10% credit for geothermal systems.

Federal Energy Efficiency Tax Deduction for Commercial Buildings
A corporate tax deduction of up to $1.80 per square foot is available to owners or tenants of new or existing commercial buildings that are constructed or reconstructed to save at least 50% of the HVAC, water heating and interior lighting energy costs of a building.  Partial deductions of up to $.60 per square foot can be taken for specific systems.

Federal Energy-Efficient New Homes Tax Credit for Home Builders
A tax credit of up to $2,000 can be provided to builders of new homes that are certified to reduce heating and cooling energy consumption by 50%.

Federal Residential Energy Efficiency Tax Credit
A tax credit of up to $1,500 is available for energy-efficient home improvements, including water heaters, furnaces and boilers, heat pumps, air conditioners, building insulation, windows, doors, roofs and biomass stoves.  Taxpayers who purchase energy-efficient properties are eligible for a tax credit worth 30% of the system cost for electric heat pump water heaters, electric heat pumps, central air conditioners, water heaters, boilers, main air circulating fans and biomass stoves.

Federal Residential Renewable Energy Tax Credit
A personal tax credit of 30% can be obtained for the installation of renewable energy systems, including solar photovoltaics, solar hot water, wind and geothermal systems.

Home Depot Foundation
The Affordable Housing Built Responsibly grant program provides funds to non-profit organizations that will result in the production, renovation or financing of green affordable housing.

Kresge Foundation’s Challenge Grant Program
Grants for facilities capital can be made to non-profit organizations as they conduct capital campaigns to build or renovate their facilities.

Sustainable Jobs Fund
SJF Ventures provides growth capital financing to companies in the renewable energy and efficiency sectors.