Challenge: Advanced energy is a high-growth opportunity in the manufacturing sector that depends on robust supply chains. However, small manufacturers face several barriers to entry in advanced energy markets, including the high cost of machinery and materials.
Solution: State leaders could establish a revolving loan fund to support small manufacturers wanting to retool operations for the advanced energy industry. Manufacturers could use loans to purchase machinery and equipment, upgrade or build facilities, or as initial operating capital. Loan recipients could also be required to meet metrics such as energy efficiency or job creation.
Example: Wisconsin established the Clean Energy Manufacturing Revolving Loan Fund (CERLF) in 2009 to provide up to $1 million of low-interest financing to private companies investing in clean energy-related projects. For example, Wisconsin-based company Gearbox leveraged CERLF funding to grow its manufacturing operations for wind turbine components. CERLF is jointly managed by the Wisconsin Economic Development Corporation and the Wisconsin Public Service Commission. The program was jumpstarted by funds through the American Recovery and Reinvestment Act and now boasts $38 million in working capital and equipment.