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Incentives/Policies for Renewables & Efficiency

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LoanSTAR Revolving Loan Program   

Last DSIRE Review: 08/07/2014
Program Overview:
State: Texas
Incentive Type: State Loan Program
Eligible Efficiency Technologies: Lighting, Lighting Controls/Sensors, Chillers , Furnaces , Boilers, Heat pumps, Central Air conditioners, Heat recovery, Programmable Thermostats, Energy Mgmt. Systems/Building Controls, Building Insulation, Motors, Motor VFDs, Custom/Others pending approval, Led Exit Signs, Energy Management Systems
Eligible Renewable/Other Technologies: Passive Solar Space Heat, Solar Water Heat, Solar Space Heat, Photovoltaics, Wind, Geothermal Heat Pumps
Applicable Sectors: Nonprofit, Schools, Local Government, State Government, Public Schools, Public Universities, Public Tax District Supported Hospitals, Community-Based and House-of-Worship Nonprofit (Pilot Program)
Maximum Incentive:$7.5 million
Terms:Interest rates are set with each Request for Application. Loans are repaid through energy cost savings. Projects must have composite payback of 10 years or less.
Funding Source:Petroleum Violation Escrow Funds; ARRA
Start Date:1989
Web Site:
Authority 1:
Date Enacted:
10 Tex. Gov. Code § 2305.032
09/01/1993 (subsequently amended)
Authority 2:
Date Effective:
34 Tex. Admin. Code § 19.41 et seq.
08/13/2002 (subsequently amended)

The Texas LoanSTAR (Saving Taxes and Resources) Program finances energy-related cost reduction retrofits for state, public school, college, university, and non-profit hospital facilities. In June 2011 a pilot program (“5-FIVE-25”) began for non-profit organizations and religious institutions. Low interest rate loans are provided to assist those institutions in financing their energy cost reduction efforts. The program’s revolving loan mechanism allows borrowers to repay loans through the stream of cost savings realized from the projects. The LoanSTAR Program Administrator should be contacted for information on current loan interest rates.

As of January 2014, LoanSTAR has funded over 237 loans totaling over $395 million. 

Eligible Projects

Energy cost reduction measures (ECRMs) financed through the program include, but are not limited to, energy-efficient lighting systems; high-efficiency heating, ventilation, and air conditioning systems; energy management systems; energy recovery systems; building shell improvements; load management projects; and systems commissioning. Utility dollar savings are the most important criterion; therefore, ECRMs are not limited to measures that save energy.

Funds can also be used for retrofitting existing equipment or, in the case of new construction, to finance the difference between standard and high-efficiency equipment. The evaluation of on-site renewable energy options (e.g., solar water heating, photovoltaic systems, small wind turbines) is encouraged in the analysis of potential projects.

All LoanSTAR projects must be analyzed by a Professional Engineer and meet other criteria specified in the technical guidelines, which can be found on the program website. Projects financed by LoanSTAR must have an average simple payback of 10 years or less.


Texas LoanSTAR funds are distributed on a first-come, first-served basis.  Eligible institutions are encouraged to contact the State Energy Conservation Office (SECO), which oversees the LoanSTAR program, as soon as a decision is reached to pursue LoanSTAR funding for cost reduction retrofits. The institution will be asked to sign a Memorandum of Understanding (MOU) agreeing to complete and submit an Energy Assessment Report (EAR) within four months. This MOU instructs the Energy Office to reserve funding for the institution.

SECO performs design specification review and on-site construction monitoring at the very minimum when the project is 100% complete. Repayment of the loans does not begin until after construction is 100% completed.

More information, including project applications and a detailed program guidebook, are available on the program website above. 

  Eddy Trevino
Comptroller of Public Accounts
State Energy Conservation Office (SECO)
111 E. 17th Street
LBJ State Office Building, Room #1118
Austin, TX 78701
Phone: (512) 463-1876
Phone 2: (512) 463-1931
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.