There are a number of potential barriers to implementing climate action planning. Issues such as low local human capacity to undertake this kind of planning and the limited knowledge and understanding of climate issues at local and municipal level are some of the more obvious obstacles. Limited financial resources and competing priorities often result in medium to long term planning and action being sidelined.

The following resources provide information on different types of loan programs, external sources of funding from both private and government programs, and ideas for maximizing resources available within the community.

Getting Started

Before securing financing, the following should be taken into consideration:

• Identify what you will be using the financing for, e.g., energy efficiency, public education, solid waste programs, etc.

• Who your target audience is for the program or project, e.g., low income, school districts, municipal buildings, residents, etc.

• What type of financing you wish to secure, e.g., grants, loans.

• Who has and/or offers financing for the particular project you are looking for funding for.

Possible Financing Mechanisms

• Loans

• Grants

• Energy Services Companies (ESCOs)

• Lease-purchase agreements

• Bonds

How ICLEI Can Help

ICLEI provides members with tips and leads on financing climate protection work.

Selected Resources:

• Funding and Grant Opportunities in ICLEI’s Action Center

• Revolving Energy Fund Guidebook
  A revolving energy fund (REF) is a sum of money that is loaned to qualified applicants for energy efficiency, clean energy, or other energy reduction measures. The fund money is replenished from loan and interest payments, which loan recipients are able to re-pay due to the cost savings that result from their energy projects. This resource guide discusses ways to structure and fund an REF, obstacles to avoid when creating an REF, and how to determine the appropriateness of a REF for a given community.

General Resources

• Guidebook of Financial Tools – Paying For Environmental Systems, Environmental Finance Program, EPA
  This guide is designed to assist communities with finding the means of financing environmental protection initiatives.

• Financing Energy Efficiency in Buildings, DOE – Rebuild America Guide Series
  This guide describes a variety of ways in which local governments can evaluate and finance energy efficiency projects in municipal buildings. It also contains case studies highlighting different financing mechanisms used by local governments.

• Energy Star Financing for Projects, EPA
  This website provides information on how to finance energy efficiency projects, how to find money for your projects, and information on ways to access funds for these types of projects.

• Smart Growth Funding Resource Guide, Smart Growth Network and EPA
  This guide provides information on funding programs, funding directories, and how to successfully apply for a grant related to smart growth. The term “smart growth” means developing a community while strengthening environmental, social, and economic health.

• Clean Energy Resource Teams
  This organization provides technology resources and financial incentives to local governments in Minnesota around renewable energy and energy efficiency. Some of the incentives are also relevant to communities outside of Minnesota.

• NextStep, Minnesota Sustainable Communities Network
  The NextStep Grant/loan Resources page has an extensive list of grant and loan opportunities for sustainability projects. While some of the programs listed are Minnesota specific, there are also many resources relevant to any community.

• Green Building and Sustainability Resources, California Department of Housing and Community Development
  Pages 18-23 of this document provide a list of resources for funding green building and sustainability projects. While many of the resources listed are specific to California communities, there are also resources relevant to communities from any state.

• Bicycle and Pedestrian Provisions of the Federal-aid Program, U.S. Department of Transportation, Federal Highway Administration
  This website discusses different parts of federal legislation that offer funding for bicycle and pedestrian projects.

• The Green Infrastructure Municipal Handbook- Managing Wet Weather with Green Infrastructure Funding Options, UNC Environmental Finance Center
  This guide discusses funding mechanisms for municipalities interested in using vegetation and natural ecological processes, or green infrastructure, to manage stormwater runoff. In addition to reducing non-point source pollution, using green infrastructure can also help mitigate the effects of climate change, reduce fuel used for building heating and cooling, and sequester carbon.

• Municipal Lease/Purchase Agreement
  The Municipal Lease/Purchase Agreement is in effect an installment purchase agreement whereby the municipality acquires title to the equipment. The municipality makes periodic lease payments of principal and interest. Upon receipt of the final payment, a bill of sale is released to the municipality, free and clear of any lien or security interest.

• Introduction to Municipal Leasing, State of Ohio 

• West Virginia Municipal League

• Easy Access to Energy Improvement Funds in the Public Sector, US EPA

State Government Financial Assistance Programs

Many states have financial assistance programs for environmental projects, including renewable energy and efficiency projects. Resources in this section include the DSIRE online database, which allows the user to search for incentive programs in his or her state, as well as specific examples of state grant and loan programs.

• DSIRE – Database of State Incentives for Renewables and Efficiency
  DSIRE is an excellent resource, containing information on incentive programs and other financial resources for renewables and energy efficiency. DSIRE allows the user to easily search for incentive programs in his or her home state.

• Funding Opportunities – A Directory of Energy Efficiency, Renewable Energy, and Environmental Protection Assistance Programs, US EPA
  This resource contains links to state and federal financial assistance for environmental programs, such as renewable energy, purchasing fuel efficient vehicles, and reducing solid waste.

• Insulate Colorado Program, Colorado Governor’s Energy Office
  Insulate Colorado allows Colorado homeowners to receive rebates for weatherization projects performed by eligible contractors. An eligible contractor is someone who has attended a series of seminars run by the Governor’s Energy Office.

• Florida Energy and Climate Protection Act Grants, Florida Department of Environmental Protection
  These grants are available for local governments who are looking to fund projects in renewable energy or energy efficiency in vehicles.

• Maryland’s The RedBook, Maryland Department of Planning
  The RedBook is an online database of financial and non-financial assistance offered by Maryland State government agencies, local governments can search by program type or agency.

• Massachusetts Energy and Environmental Grant and Loan Guide, Commonwealth of Massachusetts
  This guide provides a listing of the nearly 50 available grant and loan programs throughout the Commonwealth of Massachusetts, included in the guide is the Municipal Sustainability Grants and the Green Communities Grants, highlighted below.

• Municipal Sustainability Grants, Massachusetts Department of Environmental Protection
  The Municipal Sustainability Grants Program provides municipalities, schools and certain regional government entities with equipment, outreach materials, technical assistance and funding in support of waste reduction, water conservation, household hazardous waste and mercury diversion, and air quality initiatives at the local level. 
• Green Communities Grant Program, Massachusetts Department of Energy Resources
  This new program provides local governments that qualify as Green Communities with grant money to implement various energy conservation, energy efficiency, or renewable or alternative energy projects in their community.

• New Hampshire Department of Environmental Services Grants and Loans
  These opportunities, available for local governments, provide the funding to support environmental infrastructure improvements and other environmental and public health projects.

• New York State Energy Research and Development Authority (NYSERDA)
  NYSERDAs funding helps municipalities fund a variety of environmental initiatives, from alternative fuels and renewable energy projects to wastewater treatment facilities.

• North Carolina Energy Improvement Loan Program, North Carolina State Energy Office
  This program provides local governments with low-interest loans to fund energy conservation projects, including alternative or renewable energy projects.

• Oregon Energy Loan Program, Oregon Department of Energy
  The program offers low-interest loans for projects that save energy, produce energy from renewable resources such as water, wind, geothermal, solar, biomass, waste materials or waste heat, use recycled materials to create products, or use alternative fuels

• Pennsylvania Office of Energy and Technology Deployment, Pennsylvania Department of Environmental Protection
  This site provides a listing of grants that focus on energy efficiency and renewable energy.

• Tennessee Local Government Energy Efficiency Loan Program, Tennessee Department of Economic and Community Development
  The Local Government Energy Efficiency Loan Program offers low interest loans to Tennessee municipal and county governments for energy efficiency-related projects in courthouses, administration buildings, schools, maintenance facilities, and any other building owned by the city and/or county.

• Texas LoanSTAR Revolving Loan Program, Texas State Energy Conservation Office
  The LoanSTAR Revolving Loan Program provides loans for energy efficiency projects in public buildings. Recipients have a maximum of 10 years to repay the loan and have the option of including metering and monitoring costs in the loan.

• Washington Department of Ecology
  The Department provides several opportunities for grants and loans to fund environmental programs in the areas of air quality, education, solid waste management, and more.

• Wisconsin Financial Incentives for the Production of Clean Energy, Wisconsin Office of Energy Independence
  This guide provides links to grant and loan programs for renewable energy production at both the state and federal level.

Public and Private Funding

The following two examples are of municipalities that used funding from both governmental and non-governmental bodies.

• City of Ashland Conservation Program, City of Ashland, OR
  The City of Ashland has a variety of energy conservation, efficiency, and clean energy programs. These programs are funded through the state government, local government, and a private foundation.

• Oakdale Neighborhood Recycling Campaign, Town of Dedham, MA and Aceti Associates
  The Oakdale neighborhood in Dedham, MA launched a volunteer-based educational campaign to increase recycling participation by residents. The project was funded by a grant from the Massachusetts Department of Environmental Protection, but also received contributions from a local bank. This document discusses funding the campaign, the successes and challenges of implementing the campaign, and the financial benefits to the community from increased recycling rates.

Case Study

• An Innovative Approach to Energy Conservation and Efficiency, Shutesbury, MA
  Limited budgets required the Town of Shutesbury, MA to think of unique ways to meet its climate protection goals. Learn how Shutesbury looked to outside funding, created an energy committee, and worked with residents to achieve success.