As of September 30, 2005: 22,142 loans for $176.1 million
Questions and Answers...
5% Dollar and Energy Saving Loans

ben franklin
The Nebraska Energy Quarterly features questions asked about 5% Dollar and Energy Saving Loans.
Loan forms may be obtained from participating lenders, the Nebraska Energy Office, or the agency's web site by clicking on the “Loan Forms” button above.
Q: Can a corn burning stove be financed with a Dollar and Energy Saving Loan?
A: And the answer is — Maybe.
corn stove
Corn stove
For a corn burning stove to be eligible for financing with a Dollar and Energy Saving Loan, the stove would have to qualify using Forms 32 and 33 and Steps to Obtain a Low-Interest Loan Using an Energy Audit. Using these forms, the stove would need to show a simple payback of 15 years or less, and must replace the existing heating system (See Notes at end of answer).

In determining if the stove can be financed, look at what is currently spent for heating. Examine the utility bills for a full year. If natural gas is used, look at the gas bills for the summer months. During summer there will be little or no heating costs, only costs for appliances such as hot water, clothes drying or cooking. Subtract that amount from the winter gas bills to determine the amount currently spent for heating. If you have an air source heat pump, or other type of electric heat with air conditioning, look at the lowest electric bill in the spring and fall, which would represent the electricity you use for water heating, stove, lights, television, computer and other uses. If propane is used, and it is delivered so that you cannot determine how much is used for cooking and hot water, a good estimate is one-third for cooking and hot water, and two-thirds for heating. Also calculate the therms, kilowatt hours, or gallons of fuel you use.

Next, examine the efficiency of the current heating equipment and calculate the amount of heat needed for the home. If you have a 90% AFUE (Annual Fuel Utilization Efficiency) gas furnace, and know 50 million British thermal units (Btus) of energy were used for heating purposes (from the previous calculation), then 45 million Btus will be needed to heat the home, or 50 million times 90% (0.90) equals 45 million.

If an air source heat pump with a HSPF (Heating Seasonal Performance Factor) of 7.8 provides heating and 5,770 kilowatt hours of electricity were used, then 45 million Btus were used to heat the home, or 5,770 kilowatt hours times 1,000 watts per kilowatt times 7.8 HSPF equals 45 million Btus.
Q: Can a wind turbine be financed with a loan? If it can be financed, would a technical audit be the only paperwork necessary?
Home-scale wind turbine
While a wind turbine could be submitted for a Dollar and Energy Saving Loan, typically they do not show a sufficient payback to be able to be financed with a loan. A more detailed response to this question appeared in the March 2005 issue.

An article in Home Power, August-September 2003 on a typical home-scale wind turbine installation provides a good example of an installation in Nebraska. In comparing the kilowatthours reported in the article to a study done at Mead, Nebraska, the turbine produced about 5 percent more energy than the hypothethical turbine in Mead. Unfortunately, when comparing the costs to the savings, the installation showed a simple payback of almost 90 years.

To have a wind turbine project evaluated for financing, submit Forms 32 and 33 . The Steps to Obtain a Low Interest Loan Using an Energy Audit provides helpful suggestions in completing the forms.
Q: Would a wood burning boiler qualify for a Dollar and Energy Saving Loan? How do wood boilers compare to geothermal heat pumps?

Wood boiler
For a wood boiler to be financed using a Dollar and Energy Saving Loan, the boiler would need to evaluated based on the information supplied on Forms 32 and 33 . A recent question on the possibility of financing corn burning stoves was addressed. The qualification criteria for a wood boiler would be very similar.

Consider the following when evaluating the benefits of a wood boiler and your current system:

  • Determine the efficiency of your current heating system.
  • Find out the combustion efficiency of the boiler from the manufacturer so that a comparison can be made to assess eligibility for a loan.
  • Use a current market value for the wood needed as boiler fuel. This can be found in newspaper ads for your area. The British thermal unit (Btu) content for wood can range from 15,000,000 Btus/cord for softwood, to 20,000,000 Btus/cord for hardwood.
  • This type of project would be considered a building system. Building systems allow up to 15 years for a simple payback.
  • Form 32, line 4a: One of the requirements for a loan is that you replace your current equipment. The current unit could not be kept for backup heat, unless that unit already meets the requirements for prequalified systems. This is detailed in the corn stove article.

In comparing wood boilers to geothermal heat pumps, there are a number of things to consider:

  • Geothermal heat pumps are by far the most efficient means of heating and cooling a home. These units can have efficiencies as high as 4.9 COP for a ground loop system. What that means is that for every watt of power you put into the system, you get 4.9 watts back out. You can check the efficiencies of geothermal heat pumps at the ARI web site under Water Brine Air Heat Pumps. For Air Conditioners and Air Source Heat Pumps, look under Unitary Air-Conditioning Systems and Unitary Heat Pump Systems, respectively.
  • In comparing gas and electricity, there are different efficiencies:
    • Natural gas or propane has 100,000 Btus in a therm at about $.78, or 140,000 Btus in a gallon of #2 fuel oil at $1.60, or 95,000 Btus in a gallon of propane at $1.55 (prices will vary from area to area).
    • Electricity at 5.36 cents a kilowatt has only 3,412 Btus. It appears electricity is pretty expensive compared to natural gas or propane: $1.57 per therm or 100,000 Btus, $2.19 for 140,000 Btus.
    • However, if a geothermal heat pump with a COP of 4.9 is compared to a gas furnace or boiler at 80 percent efficiency and the output is considered, the cost comparison reverses. To get 100,000 Btus of output from a geothermal heat pump with a COP of 4.9 would require an input of 100,000 Btus divided by 4.9 COP, or 20,408 Btus input, or 5.98 kilowatthours. To get 100,000 Btus of output from a gas/wood/oil furnace or boiler with an 80 percent efficiency would require an input of 100,000 Btus divided by 0.80 efficiency, or 125,000 Btus input, or 1-1/4 therms, or 0.9 gallons of #2 fuel oil, or 1.3 gallons of propane, or about 1/140th cord of wood. The output, or actual heat that you feel or use, is actually cheaper using a geothermal heat pump. The downside is that geothermal systems can be more expensive to install because wells are needed with this type of system.
  • Gas furnaces are available with much higher efficiencies, up to 96 percent or 0.96. A COP of 4.9 is one of the higher ratings for a geothermal heat pump. A COP of 4.0 to 4.5 is more typical for a geothermal heat pump using a ground loop. The heat pump also has the advantage of very high SEER ratings, or cooling efficiencies, and water loop or ground water systems have higher efficiency ratings than ground loop systems.
  • It is important that geothermal heat pump systems be sized for the cooling load. Oversizing of these units will reduce the ability of the heat pump to remove moisture or humidity from the air when cooling.
  • Ratings for most gas systems can be viewed at the Gas Appliance Manufacturers Association. Ratings for the different types of geothermal systems can be viewed at the Air-Conditioning and Refrigeration Institute.
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