The US Department of Energy wants to guarantee over $30.5 billion in loans to the private sector to commercialize new energy technologies that will reduce global warming and get us off our addiction to foreign oil. It's about time, but what about providing some loan guarantees to get solar and wind energy projects built by you and me.

Most people realize that we rely on gasoline and oil too much. Unfortunately, we're also getting increasing hooked on natural gas to produce electricity, heat our homes and run our factories. Natural gas is also used to extract oil from oil sands in Canada.

In 2005 the US Congress passed new energy legislation that created loan guarantees to encourage companies to commercialize new technologies to reduce global warming and to make us less dependent on foreign energy sources.

We like most of the categories of projects that the $30.5 billion loan guarantee program [PDF] is targeting:

Energy Efficiency, Renewable Energy, Advanced Transmission and distribution, Advanced Nuclear facilities, Front-end Nuclear facilities Fuel Cells, and Electric Cars.

Later this year, $8 billion in loan guarantees are slated for advanced fossil energy projects.

Loan Guarantees and How they work
All of the above project types are at the pilot stage and have never been commercialized. Loan guarantees provide the incentive for banks to come forward and lend money to energy developers for these risky proejcts.

The banks know that the Department of Energy will guarantee repayment of 80% of the loan amount. Even if banks are not willing to lend money for a project, the Federal Financing Bank will.

This process is similar to a Small Business Loan or a federally guaranteed student loan. Repayment is expected. We hope that some of these projects will be commercially viable, but we don't think we'll see anything for at least 10 years. How come?

Well the Energy Department has to review projects, do an environmental review and finally make the loan guarantee official. Then the projects have to be constructed and hopefully some will be commercially viable and help to reduce global warning and promote clean energy.

Energy loan guarantees for Renewables
Right now there are very few economic or tax incentives to get people like you or me to construct solar and wind energy projects on our homes. It seems that the government does not really think that home owners of single family, multifamily homes and commercial buildings are a good risk. We think they are dead wrong and are married to Big is Better. That may be because typical energy companies won't make money unless the projects are very large.

Many Americans would love the opportunity to take out energy loans that would reduce their electricity and natural gas bills by 10 to 30 percent over the next 25 years. Combine a federally guaranteed energy loan with tax credits from the federal and state government and we could see some good come out of it. Manufacturers of energy technologies and renewable energy would also benefit because in effect the government would be creating a market that in the long run would create a clean energy industry. In turn we could market these new technologies globally instead of begging oil producing countries to pump more oil.

Look around you
The sun shines on your home, your work place and on your car. All are collecting energy and a great deal of heat. Why not convert that light and heat to electricity and plug in and sell it to the electric grid at night.

If your live in a large city, go up on your roof and take a look around. You'll see few people and lost of flat roofs which could generate electricity using small wind turbines or solar roof panels. As we mentioned in earlier articles, there are numerous projects that we could undertake on our homes like solar and wind energy on our roofs, energy efficiency of our homes and buildings. Don't forget hybrid vehicles too.

Contact your US Congressman in the House of Representatives and the US Senate and ask they why they are not providing us with energy loan guarantees. Also review your State's energy programs.