Alternative Energy Revolving Loan Program (Montana)

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Last modified on February 12, 2015.

Financial Incentive Program

Place Montana

Name Alternative Energy Revolving Loan Program
Incentive Type State Loan Program
Applicable Sector Commercial, Residential, Nonprofit, Schools, Local Government
Eligible Technologies Building Insulation, Windows, Doors, Solar Water Heat, Photovoltaics, Landfill Gas, Wind, Biomass, Geothermal Heat Pumps, Small Hydroelectric, Fuel Cells using Renewable Fuels
Active Incentive Yes

Implementing Sector State/Territory
Energy Category Renewable Energy Incentive Programs, Energy Efficiency Incentive Programs
Amount Varies

Start Date 2001-07-01

Funding Source Montana Department of Environmental Quality

Maximum Incentive 40,000

Terms Up to 10 years; 3.25% interest rate for 2014
Program Administrator Montana Department of Environmental Quality
Date added to DSIRE 2001-07-11
Last DSIRE Review 2014-10-22

References DSIREDatabase of State Incentives for Renewables and Efficiency[1]


The Alternative Energy Revolving Loan Program (AERLP) provides loans to individuals, small businesses, local government agencies, units of the university system, and nonprofit organizations to install alternative energy systems that generate energy for their own use. The program is funded by air quality penalties collected by the Department of Environmental Quality (DEQ), and also used funding from The American Recovery and Reinvestment Act of 2009 (ARRA). The program is administered by DEQ, which is responsible for developing the rules.

Alternative energy systems are defined by the Montana Code as "the generation system or equipment used to convert energy sources into usable sources." Technologies included in this definition are fuel cells using non-fossil fuels, geothermal, low emissions wood or biomass, wind, photovoltaics, solar water heating, small hydropower (under 1 megawatt), and other recognized non-fossil forms of generation. DEQ provides a technical review and approval of systems proposed for the loan program.

In 2005, SB 50 added local government agencies, units of the university system, and nonprofit organizations to the list of eligible sectors, and allowed energy conservation measures to be financed when installed with an eligible renewable energy project. Energy conservation measures financed by the loan are limited to 20% of the total loan amount. Interest rates are set annually and are fixed for the term of the loan - the rate for 2014 is 3.25%. Some funding from ARRA temporarily boosted the loan amount in April 2010, but loan amounts have returned to previous levels; the maximum loan amount is $40,000, with a maximum loan term of 10 years. Approximately $1 million in funding is available for the period starting July 2013.

DEQ will accept and process loan applications throughout the year. Approved projects will be ranked according to criteria published in the Administrative Rules of Montana (ARM) Title 17, Chapter 85. This criteria includes items such as system reliability, return on investment and avoided fossil fuel consumption. Once a loan is approved, the applicant will be informed as to whether funds are currently available and when new funds are anticipated if funds are not currently available.

Incentive Contact

Contact Name Kathi Montgomery
Department Montana Department of Environmental Quality
Division Energy Planning & Renewable Energy
Address 1520 East Sixth Ave.
Address 2 PO Box 200901
Place Helena, Montana
Zip/Postal Code 59620
Phone (406) 444-6586


Authorities (Please contact the if there are any file problems.)

Authority 1: MCA § 75-25-101 et seq.
Date Effective 2001-07-01
Date Enacted 5/5/2001, amended 2005

  • Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.[1]


  1. 1.0 1.1  "Database of State Incentives for Renewables and Efficiency"