In June 2010, Ohio passed a law allowing cities and counties to create revolving loan programs to support permanent renewable energy and energy efficiency projects on residential and other buildings.

Under such programs, the local municipality establishes a fund for the loan program, under which local residents or businesses can apply for a low-interest rate loans to help finance their renewable energy project. As loans are repaid, the municipality can then fund more loans to more people installing solar or other renewable energy on their buildings. Under the law, such programs may only offer interest rates below prevailing market rates.

The program was designed with all property owners in mind, so homeowners, business owners, and others (like farms, office buildings or warehouses) may all apply. The loan program also was established to promote energy efficiency as well as renewables like solar and wind.

If a town or city does not have a renewable energy revolving loan fund and wants to, it needs to adopt an ordinance that will allow it to do so. Under the law, the ordinance will create a revolving loan fund in the municipality’s treasury and provide seed money for the fund. The municipality must also establish facility criteria, as well as the terms and conditions for making the loans from the fund.

The state law also requires that property owners repay their loans through installments and that those payments as well as extra earnings from interest are returned to the revolving loan. Finally, it requires that the municipalities establish other measures needed to properly operate the program and encourage alternative energy and energy efficiency in the municipality.

Alternative energy revolving loan programs must submit a quarterly report to utilities detailing loan supported energy projects and provide additional information as necessary for utilities to count energy efficiency and demand reduction credits.