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Incentives/Policies for Energy Efficiency

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Commercial Energy Efficiency Loan Program   

Last DSIRE Review: 03/14/2013
Program Overview:
State: Tennessee
Incentive Type: State Loan Program
Eligible Efficiency Technologies: Lighting, Heat pumps, Central Air conditioners, CHP/Cogeneration, Processing and Manufacturing Equipment, Comprehensive Measures/Whole Building, Custom/Others pending approval
Eligible Renewable/Other Technologies: Custom Renewable Energy, Custom Co-Generation
Applicable Sectors: Commercial, Industrial, Nonprofit
Amount:$20,000 - $5 million
Shared Savings Option: retain up to 50% of monthly energy savings, pay loan with remainder.
Maximum Incentive:$5 million
100% of cost
Terms:Interest Rate: 2% fixed up to 5 year term; 5% fixed for 5-10 year terms
Repayment up to 10 years
All loan costs may be financed; no prepayment penalty. Loan recipients must complete a vendor proposal with detailed project energy savings.
Funding Source:State of Tennessee, U.S. Department of Energy, U.S. Economic Development Administration, Pathway Lending, Pinnacle Financial Partners and the Tennessee Valley Authority
Program Budget:$50 million
Start Date:1/4/2011
Web Site:

Based on a U.S. Department of Energy Industrial Loan program, Pathway Lending's Energy Efficiency Loan Program provides Tennessee business and non-profit entities with below-market loans for energy efficiency and renewable energy improvements. The shared savings option allows organizations to pay off the loan over a 10-year period with 50% of the money going to renewable energy and energy efficiency projects, while retaining the remaining 50% through energy savings to pay off the loan (most common for projects with a two-year simple payback and a four-year loan term). All costs related to the efficiency measures may be financed, including loan fees, assessments, design, equipment and installation. The amount of savings achieved monthly through energy use reduction determines the monthly payments for the loan as long as payments do not exceed 10 years.

Pathway Lending is currently working with the following city and county governments to provide these low interest loans*:

  • Memphis/Shelby County
  • Knoxville/Knox County
  • Nashville/Davidson County

All required documents for applications and reports are available on the Pathway Lending web site.

*Additional communities are encouraged to participate in the program. For more information, please contact Pathway Lending.

  Pathway Lending
Tennessee Department of Economic & Community Development
201 Venture Circle
Nashville, TN 37228
Phone: (888) 533-7284
Phone 2: (615) 425-7171
Web Site:
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2013 - 2014 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.