Energy Efficiency Financing for Public Sector Projects

August 25, 2023


Cities, counties, public care institutions, public hospitals, public schools and colleges, and special districts in California can apply for low-interest loans from the California Energy Commission for energy efficiency projects in their buildings and facilities. Residential and commercial projects and non-profit institutions are not eligible for these funds.

Entities eligible for 0% loans include:

  • School districts
  • Charter schools
  • County office of educations
  • State special schools

Entities eligible for 1% loans include:

  • Cities
  • Counties
  • Special Districts
  • Public College or University
  • Community Colleges
  • Public Care Institutions/ Public Hospitals
  • University of California
  • California State Universities

There is no minimum loan amount, but the maximum loan amount per application is $3 million. The loan term cannot exceed the useful life of loan-funded equipment, and will be determined on a case-by-case basis based on the estimated annual energy cost savings from the projects. The exact loan term will be determined such that the energy savings will cover the loan payments.

For a project to be considered, it must have proven energy savings and meet the eligibility requirements of the loan program. Examples of projects include:

  • Lighting systems
  • Pumps and motors
  • Streetlights and LED traffic signals
  • Energy management systems and equipment controls
  • Building insulation
  • Energy generation including renewable energy and combined heat and power projects
  • Heating, ventilation and air conditioning equipment
  • Waste water treatment equipment
  • Load shifting projects, including thermal energy storage
  • Energy storage systems.
  • Electric vehicle charging infrastructure used to power public fleets.

Full details and application packets are available at the web site above.

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: California
Incentive Type: Loan Program
Web Site:
Administrator: California Energy Commission
Start Date:
Eligible Renewable/Other Technologies:
  • Solar Photovoltaics
  • Combined Heat & Power
  • Lighting
  • Lighting Controls/Sensors
  • Chillers
  • Furnaces
  • Boilers
  • Heat pumps
  • Air conditioners
  • Energy Mgmt. Systems/Building Controls
  • Building Insulation
  • Motors
  • Custom/Others pending approval
  • Other EE
  • Wind (Small)
  • Other Distributed Generation Technologies
  • Lithium-ion
  • Level-2 Electric Vehicle Service Equipment
  • Direct Current Fast Charging Equipment
Maximum Loan: $3 million
Loan Term: Loans must be repaid from energy cost savings within 20 years, including principal and interest
Interest Rate: 0% - 1%


Name: Local Assistance and Financing Office
Organization: California Energy Commission
Phone: (916) 654-4104

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.