North Arkansas Electric Cooperative loans qualified members money at low interest for energy-efficiency improvements to their existing homes and businesses through the USDA Rural Energy Savings Program. NAEC’s goal is not only to help members lower their energy costs but also to improve the comfort of their existing home or business through the installation of a new heat pump, additional insulation or other efficiency upgrades.
Loan Types
Loan applications shall be for one or more of the following types: residential, commercial, industrial, public, community buildings/facilities, structures used in agricultural operations and any other location deemed suitable by NAEC. The loan interest rate is subject to change, but it is 1% for the duration of the loan as of Jan. 1, 2023.
- HVAC — RESP can finance the installation of air-source and geothermal heating and cooling. If application is approved, then an NAEC energy adviser will conduct a blower-door test and an energy audit to determine the appropriately sized unit. The borrower may select the dealer; however, the dealer must be licensed with the state of Arkansas. NAEC maintains a list of local dealers who are licensed in Arkansas. The co-op also recommends the dealer have valid liability and workers’ compensation insurance. Maximum loan length is eight years for a mini-split and air-source heat pump; it is 10 years for a geothermal system.
- LED Lighting — RESP can finance energy-efficient lighting, including LED installations and retrofits. An NAEC energy adviser must calculate potential savings. Maximum loan length is five years for a residential installation and 10 years for a commercial installation.
- Building Envelope Improvements and Air Sealing — RESP can finance various building envelope improvements including, but not limited to, the following applications: ENERGY STAR® windows and doors; insulation for ceiling, floor or wall; duct work; and certain roofing applications. Weatherization loans require an energy audit by an NAEC energy adviser. Funds may cover the cost of labor and materials for all listed energy-conservation measures. If the member installs the materials, the loan will be limited to financing of materials only. Maximum loan length is five years for a loan of less than $5,000 and 10 years for a loan of $5,000 or more.
- Energy-efficient Appliances — RESP can finance the purchase of energy-efficient appliances. They must be ENERGY STAR®-rated and a permanent fixture to the location. Photos of the appliances, including the ENERGY STAR® label, are required. Maximum loan length is five years.
- On- or Off-grid Renewable Energy Systems — The systems must be bought and installed by Today’s Power Inc, a subsidiary of Arkansas Electric Cooperatives Inc. A licensed electrical contractor is required for all work. Loans have a maximum loan amount of $25,000 without board approval. Maximum loan terms are set at 10 years. Specific to solar loans, the cost-per-kW will be limited to $2,500 per kW. Applicant must submit to NAEC the Standard Interconnection Agreement for Net-metering Facilities found in NAEC’s tariff filed with the Arkansas Public Service Commission. The agreement and additional information on net metering is posted at naeci.com/solar. Personnel from NAEC’s engineering department will inspect solar systems for specified connection requirements at a cost of $320 to the borrower; this fee is subject to increase at any time if cooperative labor is in excess of the average amount of time dedicated to an inspection. Additionally, the cooperative is not responsible for any stated performance guarantees by the manufacturer and cannot verify any manufacturer’s claims regarding production. Cooperative personnel solely review the system for safety issues and cannot perform maintenance or troubleshooting. These loans will take longer to finalize than other RESP loans due to the inspection process and that the appropriate historical society must be consulted prior to the system being installed on the property.
- Motor Systems, Irrigation or Water Systems, Compressed-air Systems, Energy-storage Devices, Commercial Energy Audits and EV Chargers — Financing of these loans will require the assistance of the NAEC Engineering department regarding recommendations and inspections. Maximum loan length varies based on amount of loan.
Loan Application Process
Those who have been an NAEC member for at least six months may apply for a loan at naeci.com/loans. A paper version of the loan application also is available during business hours at NAEC’s offices in Salem, Ash Flat and Mountain Home.
NAEC Member Services personnel handle the administration of the RESP program. They review an applicant’s credit report, NAEC payment history, amount requested, type of qualifying activity, location, etc. as well as potential savings in deciding whether to approve the loan. The review usually takes one business day after the completed application is submitted.
Steps After Approval
If approved, a Member Services representative reviews the loan process with the borrower, including liens, copy of warranty deeds, audits and/or blower-door tests (if needed), necessary documents, invoices and payment procedures. Results of the audit and/or blower-door test must show the installation of energy-efficiency measures would be cost effective and reduce the overall energy consumption of the structure.
Ordering or installation of equipment and energy-efficiency measures to be financed may not begin until the loan is approved and funds are available. Upon completion of the job to be financed, all invoices must be submitted to NAEC for preparation of loan closure. Upon closing, a check is written to the borrower who is responsible for getting payment to the contractor. NAEC will not advance funds to the borrower or the contractor without assurance that the work has been completed properly.
Loans have a maximum repayment schedule of 10 years; maximum repayment schedule varies by loan type and amount. All loans that exceed $20,000, except for on- or off-grid renewable energy systems, require board approval. Minimum loan amounts are set at no less than $1,000.
Liens on financed equipment are attached to the property and filed with the Arkansas Secretary of State Office and in the county in which the property lies within seven to 10 days of the document signing. A fee of $50 is charged to the borrower for filing the required forms. Scheduled loan payments are billed monthly, and statements of principal and interest paid are sent to the borrower each January.
Borrowers must agree to a possible inspection of conservation measures installed within six months of installation by the auditing Member Services representative.