What Is the Department of Energy (DOE) Loan Programs Office?

Developing clean energy sources is critical for the future of the United States and the rest of the world. However, creating the technology needed to make clean energy is expensive.

The U.S. Department of Energy’s (DOE) Loan Programs Office (LPO) is a program that helps facilitate the development of new technology by offering loans and loan guarantees under three different programs. Learn how the LPO works to finance large-scale energy infrastructure projects.

History of the Loan Programs Office

The U.S. Department of Energy’s Loan Programs Office was created in 2005, when the Energy Policy Act of 2005 was signed into law. The LPO grants loans and loan guarantees for large-scale energy infrastructure projects aiming to develop more fuel-efficient products or clean energy, such as for solar, wind, or hydroelectric power.

Since its inception, the LPO has granted more than $30 billion in loans, with more than $13 billion in repaid principal and $4 billion earned in interest. Projects funded have created 37,000 jobs, lowered carbon dioxide emissions by 40 million tons, and eliminated the need for 19.2 billion gallons of gasoline.

The LPO aims to support technology that either isn’t yet widely available or hasn’t yet found a commercial market to help them find commercial viability. The office’s Outreach and Business Development Division helps create support teams across all aspects of business development for the approved projects. Once the loan is closed, the Portfolio Management Division works with the Technical and Project Management Division to keep projects on track to meet goals and eventually repay their debt.

Loan Programs Office Loan Programs

The LPO primarily oversees three loan programs: Innovative Clean Energy (Title 17), Advanced Technology Vehicles Manufacturing (ATVM), and the Tribal Energy Loan Guarantee Program (TELGP).

1. Innovative Clean Energy (Title 17): These projects focus on clean-energy infrastructure developments such as nuclear, solar, wind, geothermal, and biofuels.
2. Advanced Technology Vehicles Manufacturing (ATVM): ATVM projects focus on auto manufacturing projects such as light-duty electric vehicles or other alternative fuel sources for transportation.
3. Tribal Energy Loan Guarantee Program (TELGP): This program provides direct loans or partial loan guarantees for any energy-related project undertaken by a federally recognized tribe, Alaska Native village, or Tribal Energy Development Organization.

Examples of Loan Program Office Success Stories

One notable success story from the LPO is Tesla Inc. (TSLA). Tesla received a $465 million loan in 2010 to develop the Model S. Tesla repaid the loan in full in 2013. The funds distributed through the ATVM loan created 1,500 permanent jobs and saved 52,000 metric tons of carbon dioxide emissions.

In another example, Blue Mountain Energy, a solar energy equipment supplier, used a $98.5 million partial loan guarantee to establish a geothermal power plant in northern Nevada. The plant uses binary cycle geothermal technology to convert medium-temperature geothermal heat into energy using a hot “brine” liquid extracted from a subterranean geothermal reservoir.

The Blue Mountain Energy project created 200 construction jobs, bought from more than 300 regional suppliers, and will create 14 permanent jobs. The geothermal energy harvested will prevent 130,000 metric tons of carbon dioxide emissions annually by generating 240,000 megawatt-hours annually.

The Bottom Line

The LPO offers programs that can significantly impact the viability of clean energy projects. With billions of dollars to lend and multi-industry administrative support, the office provides more than just capital. It provides guidance and support needed to take an idea to fruition.

Because of its multipronged approach, the office has an excellent success rate and has bolstered new initiatives, created jobs, and saved carbon emissions on a mass scale.