These are the definitions for terms used in this subpart. All defined terms used in this subpart are capitalized.
Agency means the Rural Business-Cooperative Service, an agency of the United States Department of Agriculture, or a successor agency.
Agricultural commodity means an unprocessed product of Farms, Ranches, nurseries forests, and natural and man-made bodies of water that the Agricultural Producer has cultivated, raised, or harvested with legal access rights. Agricultural Commodities include plant and animal products and their by-products, such as crops, forestry products, hydroponics, nursery stock, aquaculture, meat, on-Farm generated manure, and fish and seafood products. Agricultural Commodities do not include animals raised or sold as pets, such as cats, dogs, and ferrets.
Agricultural producer means a For-Profit Organization that produces or has the legal right to harvest an Agricultural Commodity and meets one of the following ownership structures:
(1) A tribal corporation or other business entity wholly owned by an Indian Tribe. The tribal corporation or business is wholly owned by an Indian Tribe. The tribal corporation or business must participate in or oversee the day-to-day labor and/or management and field operations, whereby 50 percent or greater of their gross income is derived from the agricultural operations based on the most recent complete calendar year.
(2) 100 percent ownership by an individual or an individual and their Immediate Family. The organization is 100 percent owned and operated by an individual or by an individual and their Immediate Family. All owners must participate in the day-to-day labor, management, and/or field operations of the organization. The majority-owner of the organization must derive at least 50 percent of their income from the agricultural operations. The income is based on the most recent complete calendar year. In the case of ownership by an individual and their spouse, the individual and their spouse are considered as one owner for the purpose of determining majority ownership.
Anaerobic digester means a Renewable Energy System that uses animal waste or other Renewable Biomass and may include other organic substrates to produce digestate and Biogas that may be sold in a gaseous or compressed liquid state or used to produce thermal or electrical energy.
Ancillary infrastructure means the supplementary components and systems that support a Renewable Energy System, such as energy storage that does not generate or save energy.
Annual energy production means the measured annual output of energy produced by a Renewable Energy System as measured by a meter at the common point of electrical coupling (e.g., an inverter). It is typically reported using kWh or MWH as units of energy measurement. For example, 21,900 kWh/year will be produced by the solar photovoltaic system.
Applicant means the legal entity submitting an application to participate in the competition for program funding.
Battery energy storage system (BESS) means a device that uses rechargeable batteries to store electrical energy for later use.
Bioenergy project means a Renewable Energy System that produces fuel, Biogas, thermal energy, or electric power from a Renewable Biomass source only.
Biogas means gaseous fuel (including landfill and sewage waste treatment gas) derived from the degradation and decomposition of Renewable Biomass. Feedstock segregation is not a requirement given the Biogas is derived only from the degradation and decomposition of Renewable Biomass. Examples of acceptable Renewable Energy Biogas Projects may include: production of Biogas for conversion to electricity or heat; production of Biogas to pipeline quality renewable natural gas; production of Biogas to compressed natural gas used as a non-retail transportation or other fuel; or an upstream system that distributes existing Biogas to its initial point of sale.
Byproduct means an incidental or secondary product, regardless of whether it has a readily identifiable commercial use or value, generated under normal operations of the proposed Project that can be reasonably measured and monitored.
Commercially available means a domestic or foreign Renewable Energy System or Energy Efficiency Improvement, and their components, that meets all the following requirements:
(1) Has both a proven and reliable operating history and proven performance data for at least one year specific to the operation and use, including the specific feedstock used and specific process used to create or save energy. The history and data must be obtained from another source than the Applicant's use of the RES or EEI for the Project.
(2) Is based on established design and installation procedures and practices and is replicable.
(3) Has professional service providers, trades, large construction Equipment providers, and laborers who are familiar with installation procedures and practices.
(4) Has proprietary and balance of system Equipment and spare parts that are readily available.
(5) Has service that is readily available to properly maintain and operate the system.
(6) Has an existing established warranty that is valid in the United States for major parts and labor.
Cost sharing has the meaning located at 2 CFR 200.1.
Cropland has the meaning located at 7 CFR 718.2.
Distribution components mean the physical and operational infrastructure necessary to convey the following:
(1) Energy produced by a Renewable Energy System from its point of generation to the initial point of sale; or
(2) Inputs or feedstocks to a Renewable Energy System. This includes Equipment and systems that utilize Renewable Energy for upstream applications, regardless of ownership by an entity other than the original energy producer.
End user means a consumer that uses or purchases the proposed energy to be generated or saved.
Energy assessment means a report conducted and signed by an Energy Auditor or Energy Assessor that assesses energy use, cost, and efficiency by analyzing energy bills and surveying the target building and/or Equipment.
Energy assessor means an independent professional who has at least three years of experience and completed at least five Energy Assessments or Energy Audits on similar type Projects and who adheres to generally recognized engineering principles and practices.
Energy audit (EA) means a comprehensive report prepared and signed by an Energy Auditor. It documents current energy usage; recommended potential improvements (typically called energy conservation measures) and their costs; energy savings from these improvements; dollars saved per year; and Simple Payback. The methodology of the Energy Audit must meet professional and industry standards such as the standards set forth in the American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHREA) Level II Energy Survey; American National Standards Institute (ANSI); or American Society of Agricultural and Biological Engineers (ASABE) S162 Standard for performing on-Farm Energy Audits.
Energy auditor means an independent professional that meets one of the following criteria:
(1) An Energy Auditor certified by the Association of Energy Engineers;
(2) An energy manager certified by the Association of Energy Engineers;
(3) A licensed professional engineer in the State in which the audit is conducted who has at least one year of experience and who has completed at least two similar Energy Audits; or
(4) An individual with a four-year engineering or architectural degree who has at least three years of experience and who has completed at least five similar Energy Audits.
Energy efficiency improvement (EEI) means improvements to an existing building or systems and/or improvements or replacement of Equipment, owned by the Applicant, that reduces energy consumption on an annual basis for the Agricultural Producer's or Rural Small Business' operations.
Equipment has the meaning located at 2 CFR 200.1.
Existing business means a business that has been producing and delivering goods or providing services for at least one full year. The following will be treated as Existing Business provided there is not a significant change in operations of the Existing Business: Mergers by an Existing Business with a new or Existing Business, a change in business name.
Farm or Ranch means any place from which $1,000 or more of Agricultural Commodities were raised and sold or would have been raised and sold during the previous year, but for an event beyond the control of the farmer or rancher. It does not include “hobby farms,” where less than 50 percent of the gross income of the majority owner is derived from its operation. In the case of ownership by an individual and their spouse, the individual and their spouse are considered as one owner for the purpose of determining majority ownership.
Feasibility study means a report, conducted by an independent professional possessing relevant knowledge, expertise, and experience, that includes an opinion or finding evaluating the economic, market, technical, financial, and management feasibility of a proposed Project or operation located at a specific site in terms of its expectation for success.
Federal award has the meaning located at 2 CFR 200.1.
Federal fiscal year means the 12-month period beginning October 1 of each year and ending on September 30 of the following year; it is designated by the calendar year in which it ends.
Financial assistance agreement (FAA) means an agreement between the Agency and the Recipient setting forth the terms and conditions under which the Federal Award will be administered. The FAA is executed using Form RD 4280-2.
For-profit organization has the meaning located at 2 CFR 200.1.
Geothermal direct generation system means a Renewable Energy System that uses thermal energy directly from Geothermal Sources.
Geothermal electric generation system means a Renewable Energy System that uses thermal energy from a Geothermal Source to produce electricity.
Geothermal source means the earth's natural underground heat reservoir.
Highest-level owner means the entity applying does not have any other entity that owns or controls it.
Hybrid system means a combination of two or more Renewable Energy technologies that are incorporated into a unified system to support a single Project.
Hydroelectric system means a Renewable Energy System producing electricity using various sources of moving water including, but not limited to, diverted run-of-river water, in-stream run-of-river water, and in-conduit water.
Hydrogen system means a Renewable Energy System that produces hydrogen derived from a Renewable Biomass or water using wind, solar, ocean (including tidal, wave, current, and thermal), geothermal, or hydroelectric sources as an energy transport medium in the production of mechanical or electric power or thermal energy.
Immediate family means individuals who are closely related by blood, marriage, or adoption, or live within the same household, such as a spouse, domestic partner, parent, child, sibling, aunt, uncle, grandparent, grandchild, niece, or nephew.
Indian Tribe has the meaning located at 25 U.S.C. 5304.
Inspector means an independent professional who has at least three years of experience and has completed at least five inspections on similar type Projects.
Interconnection agreement means a contract containing the terms and conditions governing the interconnection and parallel operation of the electric generation Equipment and the End User or the Biogas production system and gas pipeline.
Key service providers means developers, general contractors, project managers, subcontractors, electricians, plumbers, foundation and framing crews, HVAC technicians, professional engineers, consultants, Energy Auditors, or any other qualified professional who provides services to the Project. They must be licensed to do work in the State of Project, if licensing is applicable.
Kilowatt (kW) means a metric unit of power that measures the rate of energy consumption. It is equal to 1,000 watts, which is equivalent to 1.34 horsepower.
Kilowatt-hour (kWh) means a measure of energy used to quantify how much electricity is consumed or produced within a one-hour period. It is equivalent to one Kilowatt of power used continually for one hour.
Letter of conditions (LOC) means the letter that the Agency issues to an entity whose application is selected for funding. The letter outlines all the conditions of the award that must be met before the award can be approved.
Local Government means a legally established governing body that manages public administration and services within a defined local area, including but not limited to a county, municipality, city, town, township, local public authority, school district, special district, intrastate district, council of governments, or any agency or Instrumentality of such entities.
Megawatt (MW) means a unit of power equal to 1,000,000 watts. It is commonly used to measure the power output of large power plants, wind turbines, solar farms, and other large-scale power generation Equipment.
Megawatt-hour (MWh) means a measure of energy used to quantify how much electricity is consumed or produced within a one-hour period. One Megawatt-hour is equivalent to one Megawatt of power used continually for one hour.
Metering agreement means the agreement between an entity and the utility company regarding how energy will be valued or credited to the entity
Ocean energy means energy created by use of various types of moving water in the ocean and other large bodies of water (e.g., Great Lakes) including, but not limited to, tidal, wave, current, and thermal changes.
Off-grid system means a self-sustaining energy system that operates independently of private or publicly-managed utilities.
Period of performance has the meaning located at 2 CFR 200.1.
Project period means the timeframe during which allowable Project costs are incurred. It is based on the development, design, and installation of the RES or EEI and must be no more than 24 months. The Project Period ends no later than 30 days after the RES or EEI is installed and the end date must be between 12 and 24 months prior to the submission of an application. With the exception that for the first application window following the release of the updated regulation the Project Period end date may be between 12 and 36 months prior to submission of the application.
Power purchase agreement means the terms and conditions governing the sale and transportation of power produced by the Applicant to a third party. It must include energy quantity, connection point, and revenue to be paid by buyer to seller.
Principals means the following:
(1) Individuals or Indian Tribe who own the Applicant;
(2) Individuals who are responsible for handling Federal funds associated with the Project; and
(3) Individuals who are responsible for overseeing the Project (for example, the Executive Director, or individual who has signature authority for the Applicant).
Project means all of the allowable activities to be funded by the Federal Award and Cost Share.
Project cost has the meaning located at 2 CFR 200.1.
Ranch has the meaning located under Farm in this section.
Rated system size means the maximum output of power, usually in Kilowatts or Megawatts as units of energy measurement, that a generator or energy resource is designed to produce under specific conditions as specified by the manufacturer of the Renewable Energy System. For example, a 10 kW solar photovoltaic system has a rated size of 10 kW.
Real property has the meaning located at 2 CFR 200.1.
Recipient has the meaning located at 2 CFR 200.1.
Refurbished means a piece of Equipment or RES that has been brought into a commercial facility, has been thoroughly inspected, had worn parts replaced, and has a warranty that is approved by the Agency.
Renewable biomass means:
(1) Materials, pre-commercial thinnings, or invasive species from National Forest System land or public lands (as defined in section 104 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1702)) that:
(i) Are Byproducts of preventive treatments that are removed to reduce hazardous fuels; to reduce or contain disease or insect infestation; or to restore ecosystem health;
(ii) Would not otherwise be used for higher-value products; and
(iii) Are harvested in accordance with applicable law and land management plans and the requirements for old-growth maintenance, restoration, and management direction of paragraphs (2), (3), and (4) of subsection (e) of section 102 of the Healthy Forests Restoration Act of 2003 (16 U.S.C. 6512) and large-tree retention of subsection (f) of section 102; or
(2) Any organic matter that is available on a renewable or recurring basis from non-Federal land or land belonging to an Indian or Indian Tribe that is held in trust by the United States or subject to a restriction against alienation imposed by the United States, including the following items:
(i) Renewable plant material (including feed grains; other agricultural commodities; other plants and trees; and algae); and
(ii) Waste material including crop residue; other vegetative waste material (including wood waste and wood residues); animal waste and Byproducts (including fats, oils, greases, and manure); and food waste and yard waste.
Renewable energy means energy derived from—
(1) A wind, solar, Renewable Biomass, ocean (including tidal, wave, current, and thermal), geothermal or hydroelectric source; or
(2) Hydrogen derived from Renewable Biomass or water using an energy source described in paragraph (1) in this definition.
Renewable energy system (RES) means a system that produces usable energy from a Renewable Energy source and:
(1) May include Distribution Components necessary to move energy produced by such a system to initial point of sale; and
(2) May include other components and Ancillary Infrastructure of such system, such as a storage system.
(3) Does not include a mechanism for dispensing energy at retail.
(4) Is divided into four subcategories under this subpart:
(i) Energy replacement systems are those that replace 120 percent or less of the annual energy use prior to installation of the RES, where annual energy use is calculated using the 12 months prior to installation.
(ii) Energy generation systems are those that produce energy in excess of 120 percent of annual energy use prior to installation of the RES, where annual energy use is calculated using the 12 months prior to installation.
(iii) Retrofitting an existing RES.
(iv) Distribution Components and Ancillary Infrastructure as part of an RES.
Resource assessment means a report that describes the quality and availability of the renewable resource and the amount of Renewable Energy generated through the deployment of the proposed system.
Retrofitting means adding Equipment or processes to or altering or enhancing an existing Renewable Energy System to improve production, efficiency, or financial viability or for the replacement of existing components with components that improve the original design. Activities that are considered operations and maintenance of existing assets to ensure they function properly and safely are not Retrofitting. Examples of Retrofitting include, but are not limited to:
(1) Installing a feedstock pre-treater on an existing biodiesel production plant;
(2) Installing a steam turbine at an ethanol plant; or
(3) Taking an existing wind turbine and installing newly designed blades to enhance energy production;
Rural or Rural area means any area of a State not in a city or town that has a population of more than 50,000 inhabitants, not in the urbanized area contiguous and adjacent to a city or town that has a population of more than 50,000 inhabitants, and excluding certain populations pursuant to 7 U.S.C. 1991(a)(13)(H) and (I). For information on “string exclusions” and “rural in character” determinations, please consult the Agency website.
Rural small business. A Small Business that is located in a Rural area.
Simple payback means a calculation assessing the financial feasibility of the RES or EEI. See below for how to calculate it based on Project type.
(1) RES Simple Payback = (Project Cost) ÷ (dollar value of energy units replaced, credited, sold, or used and fair market value of Byproducts as applicable in a typical year).
(i) The value of energy replaced will be calculated based on the Applicant's historical energy consumption with actual average price paid for the energy replaced, as documented by 12 consecutive months of utility bills prior to the installation of the system. For the average price paid, the following charges must be excluded: fixed meter charge, demand charges, subsidy charges, and sales tax. In the case of Off-Grid Systems, the historical energy consumption must be documented through a written statement from the utility company that services the Project location that identifies the average price per kW hour for the 12-month period prior to installation.
(ii) The value of energy credited or sold will be calculated based on the amount of energy units to be credited or sold at the actual rate per unit, as documented in utility net metering or crediting policies and/or a Power Purchase Agreement.
(iii) The value of Byproducts produced by and used in the project or related enterprises must be documented at the fair market value to be received for the Byproducts in a typical year.
(iv) The calculation does not include any one-time benefits such as, but not limited to, construction and investment-related benefits, nor credits which do not provide annual income to the project, such as tax credits.
(2) EEI Simple Payback = (Project Cost) ÷ (dollar value of energy saved).
(i) Energy saved will be determined by subtracting the actual energy consumed from the historical energy consumed and converting the result to a monetary value using a constant value or price of energy.
(A) Actual energy used in the original building and/or Equipment, as applicable, prior to the EEI Project, must be based on the actual average annual total energy used in British thermal units (BTU) over the most recent 12, 24, 36, 48, or 60 consecutive months of operation, as documented in utility bills and summarized in the Energy Audit or Energy Assessment.
(B) Actual energy use after the EEI project has been in place for the original building and/or Equipment, as applicable, for 12 months post-installation of the EEI Project, to include the same input and output conditions.
(C) Value or price of energy must be the actual average price paid over the same time period used to calculate the actual energy used. When calculating the actual average price of energy, only include energy charges directly reduced by the unit of energy being replaced or saved. For the average price paid, the following charges must be excluded: fixed meter charge, demand charges, subsidy charges, and sales tax.
(ii) The EEI projects Simple Payback calculation does not allow Applicants to monetize EEI benefits other than the dollar amount of the energy savings the Agricultural Producer or Rural Small Business realizes as a result of the improvement.
Small business means a business entity organized for profit that is independently owned and operated and that meets the definition of “business concern” located at 13 CFR 121.105 and meets the criteria located at 13 CFR 121.301(b) and (f) and meets the size threshold established by 13 CFR 121.201.
Solar electric means the conversion of energy from sunlight into electricity either directly using photovoltaics (PV) or indirectly using concentrated solar power (CSP).
Solar thermal means converting sunlight into heat for use in industry.
State means any of the 50 States of the United States, the Commonwealth of Puerto Rico, the District of Columbia, the U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands.
Used Equipment means any Equipment that has been used and is provided in an “as is” condition.
Useful life means estimated durations of utility placed on the RES or EEI. Useful life estimations terminate at the point when assets are expected to become obsolete, require major repairs, or cease to deliver economical results. The Agency determines the useful life of the RES or EEI based on the technology type and system components.
Wind energy means a Renewable Energy System that harnesses the power of the wind to generate electricity.