Endowment and Revolving Loan Fund

One of the distinctive features of the Southeast Michigan Regional Energy Office is the creation and use of an endowment to generate funds for its ongoing operation. The endowment will grow from contributions from the cities and counties that implement energy efficiency or renewable energy projects with the assistance of the Regional Energy Office.

How it works

When a member community receives grant funding from the Energy Office, the community is expected to see substantial financial savings on its energy bills. The community agrees to return 80% of their estimated annual savings to the endowment up to the cost of the project. At current energy prices, the average estimated payback time is approximately 10 years. However, with energy prices likely to rise, most communities will save far more than the initial estimate relative to what they would have paid without the energy efficiency project.

Once the project is paid back, the community will realize the full savings from the energy efficiency project, and will continue to benefit from Energy Office services as a result of the endowment built from these contributions.

When the endowment is fully capitalized at over $2 million it will generate $100,000 per year for Energy Office operations. Additional revenue from the investment of the endowment will be used to create a revolving loan fund of up to $175,000. This fund will be used to provide capital for member communities for additional energy improvement projects.

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