In the Herculean effort to wean the nation off fossil fuels, energy efficiency and renewable power share a common obstacle: cost. Despite growing national awareness and popular support, their prohibitive price tags prevent most American homeowners from making an upgrade.

Federal officials have launched a new program that could provide some relief. In April, the Department of Energy (DOE) and the Department of Housing and Urban Development (HUD) announced a list of 18 lenders that will participate in the new PowerSaver program.

This pilot program will offer home-owners low-cost loans of up to $25,000 to make energy-efficient improvements to their houses. The improvements can include insulation, duct sealing, replacement doors and windows, HVAC systems, water heaters, and even solar panels or geothermal systems. Funds can be borrowed for terms up to 20 years, with interest rates between 5 and 7 percent.

PowerSaver loans will be insured by the Federal Housing Administration (FHA), a HUD agency and issued to qualified homeowners around the country. FHA insurance will cover up to 90 percent of the loan amount in the event of a default. To ensure a good performance on the loans, borrowers will be screened for their credit-worthiness, and they will be required to have at least some equity in their home.

To encourage and support existing efforts to promote energy efficiency, lenders in the PowerSaver program will be steered toward making loans in communities that are participating in the DOE’s BetterBuildings program, another federally funded energy-efficiency effort. PowerSaver is expected to assist approximately 30,000 homeowners and create more than 3,000 jobs.