PA Solar Energy Guidelines : simplebooklet.com

Solar Energy Program Guidelines 11 17 2017 Section I Statement of Purpose The Solar Energy Program the Program provides financial assistance in the form of grant and loan funds that will be used by eligible applicants to promote the generation and use of solar energy and the manufacture or assembly of solar equipment in the commonwealth The Program is administered jointly by the Department of Community and Economic Development DCED and the Department of Environmental Protection DEP under the direction of the Commonwealth Financing Authority CFA Section II Eligibility A Eligible Applicants The following applicants are eligible for grants loans 1 2 3 A Business a corporation partnership sole proprietorship limited liability company business trust or other commercial entity approved by the Commonwealth Financing Authority The term shall include venture capital firms solar energy and solar thermal system installers and other business entities capable of raising a significant amount of capital The term shall also include not for profit entities An Economic Development Organization a nonprofit corporation or association whose purpose is the enhancement of economic conditions in their community A Political Subdivision A municipality county or school district B Eligible Projects 1 2 C Solar projects including facilities to generate distribute or store solar energy as well as manufacturing or assembly facilities for solar panels or other solar equipment Solar photovoltaic electric technologies are eligible Projects must have a useful life of at least twenty two years The development or construction of facilities used for the research and development of technology related to solar energy Eligible Use of Funds Funds may be used by the applicant to pay for any of the following project costs 1 Acquisition of land and buildings rights of way and easements necessary to construct an eligible project 3 Construction or renovation of a building that will be used to manufacture equipment or conduct research and development related to solar energy systems engineering costs associated with construction or renovation shall not exceed 10 of the grant loan award 2 The clearing and preparation of the land necessary to construct an eligible project 1

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Solar Energy Program Guidelines 11 17 2017 4 5 6 7 8 The purchase and installation of equipment used for the manufacturing of equipment or to conduct research and development related to solar energy systems The design purchase installation and construction of facilities that generate electricity using solar energy Engineering design costs associated with the installation of a solar system shall not exceed 10 of the grant loan award Energy storage costs directly related to the storage of electricity produced by the solar energy system Permit fees Administrative costs of the applicant to administer a Program grant or loan Administrative costs include advertising and legal costs as well as documented staff expenses Administrative costs shall not exceed 2 of the Program grant or loan Ineligible costs include but are not limited to fees for securing other financing interest on borrowed funds refinancing of existing debt and costs incurred prior to the approval of CFA financing Section III Program Requirements A Matching Funds Requirement Matching funds means any new public or private investment in the proposed project made by an eligible applicant Eligible applicants must provide evidence of a commitment of matching funds at the project site The amount of the matching investment required must be at least 1 for every 1 of grant Program funds awarded by the CFA The amount of the matching investment required must be at least 1 for every 3 of loan Program funds awarded by the CFA B Other Requirements 1 2 2 Conflict of Interest Provision An officer director or employee of an applicant who is a party to or has a private interest in a project shall disclose the nature and extent of the interest to the governing body of the applicant and may not vote on action of the applicant concerning the project nor participate in the deliberations of the applicant concerning the project Nondiscrimination No assistance shall be awarded to an applicant under this program unless the applicant and the project user certify to the CFA that the applicant and the project user shall not discriminate against any employee or against any person seeking employment by reason of race gender creed color sexual orientation gender identity or expression or in violation of the Pennsylvania Humans Relation Act which prohibits discrimination on the basis of race color religious creed ancestry age sex national origin handicap or disability or in violation of any applicable federal laws All contracts for work to be paid with program assistance must contain the commonwealth s official nondiscrimination clause

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Solar Energy Program Guidelines 11 17 2017 3 4 5 6 7 8 Project Records The applicant must maintain full and accurate records with respect to the project and must ensure adequate control over related parties in the project The Authority requires access to such records as well as the ability to inspect all work invoices materials and other relevant records at reasonable times and places Upon request of the Authority the applicant must furnish all data reports contracts documents and other information relevant to the project Pennsylvania Prevailing Wage Act All or a portion of the construction work associated with the project may be subject to the Pennsylvania Prevailing Wage Act as determined by the Pennsylvania Department of Labor Industry It is the responsibility of the funding recipient to ensure that the Pennsylvania Prevailing Wage Act is followed if applicable Proof of Notification For development and construction projects the applicant must provide proof that the county and host municipality or municipalities have been notified about the intended project Certification of Expenses The applicant shall sign a payment request form certifying that the expenses were incurred and were in accordance with the scope of work approved by the CFA In lieu of a formal project audit and prior to final closeout of the grant agreement the applicant shall be required to submit copies of all canceled checks verifying the expenditure of the Solar Energy Program proceeds Bank statements may also be submitted if electronic payment of the expenditure occurred Equipment Specifications and Installation Solar photovoltaic PV energy systems must be UL listed new equipment and installed in compliance with the Pennsylvania Uniform Construction Code and local laws and codes Guideline Provisions The Solar Energy Program guidelines may be modified or waived by the CFA unless otherwise required by law C Fees The Commonwealth Financing Authority charges a 100 non refundable application fee for Solar Energy Program applications Application fee is due at the time of submission There is a 1 commitment fee on all approved loans 3

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Solar Energy Program Guidelines 11 17 2017 Section IV Loans Grants and Guarantees A Loans 1 Loan Amount a b 2 3 4 c The maximum amount of any loan for a manufacturer of solar equipment shall not exceed 40 000 for every new job projected to be created by the business within three years after approval of the loan If the manufacturer fails to create the projected number of jobs within three years the Authority may require the interest rate to be increased by 3 for the remaining term of the loan The maximum loan amount for a solar energy generation or distribution project shall not exceed 5 million or 3 00 per watt whichever is less The CFA will consider loan requests over 5 million for projects that will significantly impact the Authority s goal to increase the amount of solar energy generated in the commonwealth The maximum loan amount for a solar research and development facility shall not exceed 5 million Repayment Term Loans will be repaid over a period not to exceed 22 years for equipment and 15 years for real estate Interest Rate The interest rate for the loan will be fixed at the time of approval of the loan and remain fixed for the duration of the repayment term Interest rates are subject to change based on market conditions The current interest rate for eligible projects is the 10 year Treasury plus 250 basis points The interest rate will be updated on a quarterly basis The rate will be set at the beginning of each quarter and based upon the average of the previous week 10 year Treasury The current interest rate is posted on the dced pa gov CFA website Security All loans are to be secured by a lien on the asset financed The Authority may require additional security as necessary including but not limited to a pledge of additional assets or securities or dedicated revenues B Grants 1 2 3 4 The maximum amount of any grant for a manufacturer of solar equipment shall not exceed 5 000 for every job projected to be created by the business within three years after approval of the grant If the manufacturer fails to create the projected number of jobs the Authority may require the full amount of the grant to be repaid The maximum grant amount for a solar energy generation or distribution project shall not exceed 1 million or 1 50 per watt whichever is less The CFA will consider grant requests over 1 million for projects that will significantly impact the Authority s goal to increase the amount of solar energy generated in the commonwealth It is the preference of the Authority to assist solar energy generation projects with low interest loans rather than grants whenever possible The maximum grant amount for a solar research and development facility shall not exceed 1 million

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Solar Energy Program Guidelines 11 17 2017 4 5 6 In exchange for a grant Solar PV projects will contractually commit to transfer ownership of the Solar Renewable Energy Credits SRECs generated by the system over to the CFA for the life of the project SRECs will be transferred to the CFA s account on the PJM EIS GATS System on a monthly basis The CFA will sell the SRECs and all revenue received will be returned to the Solar Energy Program for new project awards Solar PV awards will be determined through cost competition Grant requests will be pre screened for eligibility of each application based on non price factors such as technical feasibility and project readiness status of host agreement local approvals confirmed financing etc Projects that satisfy pre screening criteria will then be ranked from lowest to highest per watt incentives proposed No company developer may receive more than 10 of available funding under the Solar Energy Program C Guarantee The Authority may award grants to applicants that would serve as a guarantee for the financing in the project The Guarantee is subject to the following conditions 1 2 3 4 The grant will be in the form of a standby letter of credit and issued directly to the company developer Projects applying for a loan guarantee from the Authority will be required to invest a minimum of 10 in equity as part of the project financing The grant funds may only be drawn upon in the event the company defaults on its financing and there is a deficiency in collateral for the lending institution to collect upon The grant will pay up to 75 of the deficiency The term of the grant will not be more than 5 years The amount of the grant shall not exceed 5 million Section V Application Process A Application Procedures To apply for funding the applicant must submit the electronic on line Department of Community and Economic Development Single Application for Assistance located at www esa dced state pa us Once submitted please print nine 9 copies of the application and send with the required supplemental information please see Appendix I of these guidelines via US Mail along with the signature page Please reference the Web ID number on any documents sent with the signature page Applications must be received at least 60 days prior to the next scheduled Authority meeting at which Solar Energy Program applications will be considered An application review schedule for the Authority meetings can be found on the dced pa gov CFA website 5

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Solar Energy Program Guidelines 11 17 2017 B Application Evaluation All applications for financial assistance will be reviewed by the Department of Community and Economic Development and the Department of Environmental Protection under the direction of the CFA to determine eligibility and competitiveness of the proposed project Projects will be evaluated using the following criteria 1 The level of non CFA matching investment in the project 3 Energy savings generated or peak load reduced by the project 2 4 5 6 7 8 9 The technical and financial feasibility of the project The amount of solar energy produced by the project The number and quality of the jobs to be created or preserved in Pennsylvania by the project including construction jobs The financial need of the project The capital efficiency of the project Project readiness The level to which the project exhibits principles of sound land and water use 10 Environmental benefits arising from the project including the creation of allowances that can be used to facilitate additional economic development in the region 11 The nation and state of origin of equipment used in the solar project C Procedures for Accessing Funds 1 2 6 Upon approval of an application by the Authority a commitment letter will be issued to the applicant explaining the terms and conditions of the loan or grant The commitment letter must be signed and returned to the Authority within 45 days of the date of the commitment letter or the offer may be withdrawn by the Authority Following the acceptance of an offer by the applicant a loan closing will be scheduled and if applicable a grant agreement will be sent to the applicant for execution In the case of a grant and loan combination involving an unrelated business the Authority will contract directly with the applicant for the grant funds and will enter into separate loan documents between the Authority and the business The applicant shall obtain the services of a professional engineer or architect licensed in Pennsylvania who will certify to the Authority during construction that the expenses were incurred and were in accordance with the plans approved by the Authority The Authority will release funds to the applicant at not less than 30 day intervals with a maximum of twelve disbursements over the life of the project

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Solar Energy Program Guidelines 11 17 2017 Appendix I Supplemental Information Solar Energy Program In addition to completing the Department of Community and Economic Development Single Application for Assistance please include the following items when applying for a loan grant under the Solar Energy Program Exhibit 1 Exhibit 2 Exhibit 3 Exhibit 4 Exhibit 5 8 Provide a description of the project and project user which discusses all of the following a a brief executive summary describing the project b the specific location of the site and project characteristics such as the total acreage and or square footage of the project c any characteristics of the area in which the site is located that demonstrate a need for economic development d the historical and proposed use of the site e the specific costs and improvements to be paid for with Program funds f the experience of the project user including a discussion of previous projects completed g the estimated start and end dates of the project and projected in service date and a statement about project readiness h the number of net new full time jobs to be created and or preserved by the project i a description of how the project will reduce reliance on conventional energy resources j the estimated energy benefits both energy generated and or anticipated conventional energy displaced by the project and the method used to reach the estimates of each including MWh generated MWh saved or peak MW saved k the estimated environmental benefits of the project such as tons of air emissions avoided sulfur dioxide ozone precursors mercury and CO2 or other greenhouse gases water consumption avoided avoided waste products and the method used to reach the estimate l impacts on the availability and price of energy resources including the reduction of grid congestion and m if the project will generate electricity whether there are interconnection net metering and or power purchase agreements in place n the nation and state of origin of any equipment used in the solar energy or solar thermal project Funding commitment letters from all other project funding sources if applicable including equity commitments Letters should include the term rate and collateral conditions and must be signed and dated A statement of the amount and type of assistance requested If requesting a loan a description of the proposed repayment terms Attach financial statements of the business parent company and any other proposed guarantors if any for the last three years of operation Financial statements should include balance sheets income statements cash flow statements and notes to financials Start up companies must provide three years projected financial statements For public sector or nonprofit applicants provide the most recent audited financial statements of the applicant For loans identify the collateral that will be offered to the CFA as security for the loan If the proposed collateral is real estate provide two completed as is appraisals or one appraisal prepared by either a Member of American Institute of Real Estate Appraisers MAI or a PA State Certified Appraiser The appraisals must be no more than six months old If a personal guarantee is being offered as security attach personal financial statements for the proposed guarantor and their spouse The personal financial statements should not be more than six months old and must be signed

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Solar Energy Program Guidelines 11 17 2017 Exhibit 6 Exhibit 7 Exhibit 8 Exhibit 9 A color coded map or plot plan detailing the location of the project and planned area for the solar installation The plot plan detail should include the project area to be built and the location of the project with the property footprint For rooftop solar energy generation projects please include the building s total roof area location of the planned placement of the project and the height of the building The map or plot plan should be overlaid with the corresponding zoning of the project area A statement as to the estimated cost of the project The estimate must be prepared by an engineer architect or other qualified professional and should be accompanied where appropriate by copies of the signed bids quotations contractor estimates or sales agreements that verify project cost estimates For projects that generate distribute or store solar energy a projected cash flow analysis which includes all expenses and revenues covering a period of twenty two years from project commencement A letter from the appropriate planning agency certifying that the proposed project is in compliance with the comprehensive land use plans and zoning and subdivision codes Exhibit 10 For solar energy generation projects only a solar shade analysis showing that the system will produce no less than 80 of the maximum annual output of a system with optimal placement and orientation Exhibit 11 For political subdivision applicants provide a resolution duly adopted by the applicant s governing board formally requesting the grant loan designating an official to execute all documents describing briefly the project scope and identifying the grant amount requested per year see Appendix II for a Sample Resolution Exhibit 12 The qualifications of contractors that will conduct work on the solar research and development facility or solar energy installation project Exhibit 13 For manufacturing projects the average wage of existing employees and the average wage for jobs to be created Exhibit 14 For projects using a power purchase agreement a copy of the PPA agreement Exhibit 15 For any equipment to be funded by CFA funds or to be accounted for as match in relation to a solar energy generation storage or distribution project provide an expected useful life analysis for each major component in years Send 9 copies of completed application with all supplemental information and attachments to PA Department of Community and Economic Development Center for Business Financing CFA Programs Division Solar Energy Program Commonwealth Keystone Building 400 North Street 4th Floor Harrisburg PA 17120 0225 If you have any questions on completing the application please call the Center for Business Financing at 717 787 6245 9

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Solar Energy Program Guidelines 11 17 2017 Appendix II Authorized Official Resolution Be it RESOLVED that the of at a used for Name of Applicant of Name of County hereby request a Solar Energy Program grant and or a loan rate and year term from the Commonwealth Financing Authority to be Be it FURTHER RESOLVED that the Applicant does hereby designate and Name and Title Name and Title as the official s to execute all documents and agreements between the Name of Applicant and the Commonwealth Financing Authority to facilitate and assist in obtaining the requested grant loan I duly qualified Secretary of the Name of County PA hereby certify that the forgoing is a true and correct copy of a Resolution duly adopted by a majority vote of the at a regular meeting held Applicant and remains in effect as of this date day of Name of Applicant County 10 Secretary Governing Body Date and said Resolution has been recorded in the Minutes of the IN WITNESS THEREOF I affix my hand and attach the seal of the this Name of Applicant 20 Applicant

PA Solar Energy Guidelines

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