Projects must meet the following requirements to be eligible for financial assistance through this subpart.
(a) Eligible Projects. Eligible Projects must meet all of the following requirements. Failure to meet one or more of these requirements means the application is not eligible for funding.
(1) Project purpose. The Project must be for an RES or an EEI that has been completed between 12 and 24 months prior to the date of application.
(i) RES Projects. All RES Projects must be for one of the following purposes:
(A) The purchase of a new RES;
(B) The purchase of a Refurbished RES; or
(C) The Retrofitting of an existing RES.
(ii) EEI Projects. All EEI Projects must use less energy on an annual basis than the original building or equipment being improved or replaced as demonstrated in an Energy Assessment or Energy Audit, as applicable. Combined heat and power Projects using steam instead of Renewable Biomass must apply as an EEI Project. The purpose of the Project must include one of the following:
(A) Energy Efficiency Improvements. The Project completed EEI to existing buildings or Equipment.
(B) Efficiency improvements. The Project completed EEI to an existing RES.
(C) Replacement of previously funded Project. The EEI Project replaced the same specific EEI Equipment that previously received funds under this subpart at or after the end of the Useful Life, as specified in the FAA, provided the EEI is more energy efficient than the previously funded improvement.
(2) Amount requested. Both RES and EEI Projects have minimum and maximum amounts for the Federal Award that can be requested and approved.
(i) Minimum request. The minimum request for a grant application is $1,500. If an application includes unallowable expenses that when removed, reduce the amount that can be awarded below the minimum amount, the Project is not eligible for funding.
(ii) Maximum request. The maximum request for a RES grant application is $500,000 and the maximum request for an EEI grant application is $250,000.
(3) Cost Sharing. Cost Sharing is required for at least 75 percent of the Project Cost. For example, if the Project Cost is $1,000,000, Cost Sharing must be at least $750,000. Cost Sharing funds must be available for use during the Project Period, and they must be for allowable expenses.
(4) Rural area. The Project must be located in a Rural area, including those areas determined as “string exclusions” or “rural in character.”
(5) Allowable use of funds. All Project Costs, regardless of source, must be used for allowable purposes. See § 4280.125 for additional information.
(6) Project Period. The Project Period begins when the first allowable Project Cost is incurred for the Project. 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. For EEI Projects, the Project Period would typically start with the development of the Energy Assessment or Energy Audit. For RES Projects, the Project Period would typically start with the development of the Resource Assessment but could also start with the installation of the RES for smaller-scale systems.
(7) Commercially Available technology. The Project must utilize Commercially Available technology.
(8) Technical sustainability. The Project must demonstrate that it is technically feasible and sustainable based on the information provided in the application. The Agency will assess resource availability, feedstock agreements, off-take agreements, operations and maintenance agreements, third-party certifications for the next year after application. The RES or EEI system must operate and perform over the project's Useful Life in a reliable, safe, and cost-effective manner. EEI Projects must demonstrate this information through an Energy Audit or an Energy Assessment, as appropriate. RES Projects must demonstrate this information through a Resource Assessment or a Feasibility Study, as described in paragraphs (a)(8)(i) and (ii) of this section.
(i) Resource Assessment. A Resource Assessment is 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. All of the following must be described in the report for each source of Renewable Energy:
(A) Source of energy. The report must identify the source of Renewable Energy to be used for the Project.
(B) Type of technology. The report must identify the type of technology that will be used for the RES Project: Biomass, Bioenergy, Geothermal Direct Generation, Geothermal Electric Generation, Hydrogen, Hydroelectric, Ocean Energy, Solar, or Wind Energy. The Applicant must also identify whether there are storage components in the system.
(C) Energy output. The report must identify the type of energy output that the system produces (for example, liquid transportation fuel-ethanol, biodiesel, renewable diesel, Biogas, renewable natural gas, Biogas to electricity, wood pellets, wood briquettes).
(D) Byproducts. The report must indicate whether or not the system produces Byproducts. If it does, the Applicant must identify the Byproduct(s) and the amount produced during the 12 months immediately following installation of the RES.
(E) Storage system. The report must identify whether or not a storage system is included in the Project, and if it is, what type (e.g., BESS). The Applicant must clearly state the use cases for the battery (e.g., peak shaving, load shifting, resilience) and how this use benefits the Applicant and/or off taker. The Applicant must provide the dispatch curves for the storage system for the 12 months immediately following installation. Curves must support use case of the RES with energy storage.
(F) Use of energy. The report must identify how the energy is used in the Project.
(1) Interconnection. Indicate whether the RES is interconnected.
(2) End User. Indicate who the End User is. Does the Project include Distribution Components and/or Ancillary Infrastructure? Is the energy produced dispensed at retail?
(3) Metering Agreement. Indicate if there is a Metering Agreement, and what type (e.g. conventional net metering, net billing, aggregate net metering, virtual net metering).
(G) Sale of energy. The report must provide the following information about how the energy produced or saved was used.
(1) Percentage. Indicate the percentage of energy that was sold.
(2) Quantity. Indicate the quantity of energy that was sold for energy output and/or Byproducts and whether there are credits that are applicable, such as LCFS/RIN. If yes, what is the amount?
(3) Price. Indicate the price per unit of energy output and/or Byproducts that was paid. Are there LCRS/RIN credits that are applicable? If yes, what is the amount?
(4) Buyer. Indicate the name of the entity buying the energy.
(5) Type of agreement. Indicate the type of agreement for the sale of energy (e.g. Power Purchase Agreement, energy sales agreement, energy service agreement, off-take agreement, and/or delivery agreement)? The report must provide the following information:
(i) Purchasing energy output. Indicate whether there is an agreement for purchasing energy output. If yes, what is the name of the counter party (i.e. purchaser)?
(ii) Byproducts. Indicate if there Byproducts. If yes, is there an agreement to purchase the Byproduct? If yes, what is the name of the counter party (i.e. purchaser)?
(H) Additional information. The Resource Assessment must include the additional information described below based on energy source and technology.
(1) Wind. The Resource Assessment must provide the following information for Wind Energy Projects:
(i) Source. Indicate the source of the wind data.
(ii) Conditions and assumptions. Describe the conditions of the wind monitoring when collected at the site or the assumptions made when applying nearby wind data to the site.
(2) Solar. The Resource Assessment must provide the following information for Solar Projects:
(i) Source. Indicate the source of the solar data.
(ii) Type of system. Indicate whether the system is Solar Electric or Solar Thermal.
(iii) Assumptions. Describe the assumptions made.
(3) Bioenergy/Biomass Project. The Resource Assessment must provide the following information for Bioenergy and Biomass Projects:
(i) Renewable Biomass resource. Indicate the type, quantity, quality, and seasonality of the Renewable Biomass resource, including harvest and storage, where applicable.
(ii) Shipping and receiving. Where applicable, indicate shipping or receiving method and required infrastructure for shipping.
(iii) Process method. Indicate the process method: dry-mill, wet-mill, screw-press, chemical, or other.
(iv) Woody biomass. Document that any and all woody biomass feedstock from National Forest System land or public lands was not be used as a higher value wood-based product.
(v) Feedstock. Provide the following information for the feedstock for the RES: the substrates used as digester inputs, including animal wastes or other Renewable Biomass in terms of type, quantity, seasonality, and frequency of collection; any special handling of feedstock that may be necessary; the process for determining the feedstock resource; the annual feedstock requirement of the system in pounds, tons, metric tons, cords of wood, or other; any seasonality considerations for the feedstock; the annual amount of feedstock required by the system will be secured; the term of the feedstock agreement; the renewal options for the feedstock agreement; and who controls the option to renew the feedstock agreement.
(4) Geothermal Electric Generation. The Resource Assessment must provide the following information for Geothermal Electric Generation Systems:
(i) Ground-source. Indicate whether the system is a ground-source heat pump.
(ii) Quality of the resource. Indicate the quality of the geothermal resource, including temperature, flow, and sustainability and what conversion system is to be installed.
(iii) Special handling. Describe any special handling of cooled geothermal waters that may be necessary.
(iv) Resource determination. Describe the process for determining the geothermal resource, including measurement setup for the collection of the geothermal resource data.
(5) Geothermal Direct Generation. The Resource Assessment must provide the following information for Geothermal Direct Generation Systems:
(i) Quality of resource. Indicate the quality of the geothermal resource, including temperature, flow, and sustainability and what direct use system is to be installed.
(ii) Special handling. Describe any special handling of cooled geothermal waters that may be necessary.
(iii) Resource determination. Describe the process for determining the geothermal resource, including measurement setup for the collection of the geothermal resource data.
(6) Biogas. The Resource Assessment must include the following information for Biogas Projects:
(i) Capture and treatment. Identify the method of gas capture and treatment: landfill, food waste, sewage waste treatment, or other.
(ii) Feedstock information. Provide the following information for the feedstock for the RES: the substrates used as digester inputs, including animal wastes or other Renewable Biomass in terms of type, quantity, seasonality, and frequency of collection; any special handling of feedstock that may be necessary; the process for determining the feedstock resource; the annual feedstock requirement of the system in pounds, tons, metric tons, cords of wood, or other; any seasonality considerations for the feedstock; how the annual amount of feedstock required by the system will be secured; the term of the feedstock agreement; the renewal options for the feedstock agreement; and who controls the option to renew the feedstock agreement.
(7) Anaerobic Digester. The Resource Assessment must include the following information for Anaerobic Digester Projects:
(i) Type of system. Indicate whether the system is one of following: complete mix, plug-flow, attached film, covered lagoon, or other.
(ii) Feedstock information. Provide the following information for the feedstock for the RES: the substrates used as digester inputs, including animal wastes or other Renewable Biomass in terms of type, quantity, seasonality, and frequency of collection; any special handling of feedstock that may be necessary; the process for determining the feedstock resource; the annual feedstock requirement of the system in pounds, tons, metric tons, cords of wood, or other; any seasonality considerations for the feedstock; how the annual amount of feedstock required by the system will be secured; the term of the feedstock agreement; the renewal options for the feedstock agreement; and who controls the option to renew the feedstock agreement.
(iii) Gas production estimates. Provide either tabular values or laboratory analysis of representative samples that include biodegradability studies to produce gas production estimates for the project on daily, monthly, and seasonal basis.
(iv) Type of operation. Identify the type of operation (e.g., dairy, swine, layer, etc.), along with breed, herd population size and demographics.
(v) Waste collection. Identify the method and the frequency of waste collection.
(vi) System developer. Identify the system developer.
(vii) Digester design assumptions. Describe the digester design assumptions such as the number and type of animals, the bedding type and estimated annual quantity used, the manure and wastewater volumes.
(viii) Treatment of digester effluent. Describe the treatment of digester effluent (e.g., none, solids separation by screening, etc. with details including use or method of disposal).
(8) Hydrogen Project. The Resource Assessment must include the following information for Hydrogen Systems.
(i) Resource information. Indicate the type, quantity, quality, and seasonality of the Renewable Biomass resource.
(ii) Renewable resource. For solar, wind, or Geothermal Sources of energy used to generate hydrogen, indicate the renewable resource where the Hydrogen System was installed. Local resource maps may be used as an acceptable preliminary source of renewable resource data.
(9) Hydroelectric/Ocean Energy Projects. The Resource Assessment must include the following information for Hydroelectric System and Ocean Energy Projects.
(i) Quality of the resource. Indicate the quality of the resource, including temperature (if applicable), flow, and sustainability of the resource.
(ii) Resource evaluation. Describe the resource evaluation process, including the date and duration of the evaluation process.
(iii) Measurement setup. Describe the specifications of the measurement setup.
(iv) Proximity. Describe the proximity of the resource to the proposed site.
(10) Storage components. For Projects that include storage components, the Resource Assessment must provide the following information related to the type of technology, as described in paragraphs (a)(8)(i)(A)(1) through (9) of this section.
(i) Storage system specifications. Describe the storage system specifications.
(ii) Integration of the system. Describe how the storage system is integrated with the RES, including application, size, lifetime, response time, capital and maintenance costs associated with the operation.
(iii) Distribution of the stored resource(s). Describe the distribution of the stored resource(s).
(ii) Feasibility Study. A Feasibility Study is 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. It must include the following content:
(A) Economic analysis. The economic analysis is a cost-benefit analysis. It includes all of the following information:
(1) Minimum amount of inputs (e.g. labor, infrastructure, utilities, renewable resources, and feedstocks) to operate successfully;
(2) Contracts in place and contracts to be negotiated, including terms and renewals;
(3) Environmental risks;
(4) Cost of Project relative to the increase in revenues or benefits provided; and
(5) Overall economic impact of Project, including new markets created and economic development.
(B) Market analysis. The market analysis is an analysis of the current and future market potential, competition, sales or service estimations, including current and prospective buyers and End Users. The market analysis includes all of the following information:
(1) Competition;
(2) Type of Project: service, product, or commodity based;
(3) Target market, including new versus established;
(4) End User analysis, including captive versus competitive;
(5) By-product revenue streams; and
(6) Industry risk.
(C) Technical analysis. The technical analysis is an analysis of the reliability of the technology to be used and/or the analysis of the delivery of goods or services, including transportation, business location, and the need for technology, materials, and labor. It includes all of the following information:
(1) Commercial availability;
(2) Product and process success record and duplication of results;
(3) Experience of the service providers;
(4) Infrastructure, including roads, rail, and airports;
(5) Need for local transportation;
(6) Labor market;
(7) Availability of materials;
(8) Use, age, and reliability of technology; and
(9) Construction risk.
(D) Financial analysis. The financial analysis is an analysis of the operation to achieve sufficient income, credit, and cashflow to financially sustain the Project over the long term and meet all debt obligations. It includes all of the following information:
(1) Commercial or Project underwriting;
(2) Management's assumptions;
(3) Accounting policies;
(4) Source of repayment;
(5) Dependency on other entities;
(6) Equity contribution;
(7) Market demand forecast;
(8) Peer industry comparison;
(9) Cost-accounting system;
(10) Availability of short-term credit;
(11) Adequacy of raw materials and supplies; and
(12) Sensitivity analysis.
(E) Management analysis. The management analysis is an analysis of the legal structure of the business or operation and the ownership, governance, and management. It includes all of the following information:
(1) History of the business or organization;
(2) Professional and educational background;
(3) Experience;
(4) Skills; and
(5) Qualifications necessary to implement the Project.
(F) Recommendation. The recommendation of the independent professional(s) conducting the Feasibility Study must be included.
(G) Qualifications. The qualifications of the consultant(s) conducting the Feasibility Study must be included.
(9) Qualified Key Service Providers. All Key Service Providers must be qualified. In particular, the entity installing the RES or EEI must be licensed in the State where installation will occur and have previously installed at least three RES or EEI similar to what is proposed in the application. Individuals or entities who have a conflict of interest are not considered qualified Key Service Providers. (See § 4280.106 for more information on conflict of interest.)
(10) Key Service Provider selection. All Key Service Providers must be selected using procurement procedures that comply with 2 CFR 200.318 through 200.327.
(11) Completion certificate. The Applicant must certify that the design, engineering, testing, and monitoring is sufficient for the Project's intended purpose. For larger-scale Projects, more complex Projects, or with a Project Cost of $200,000 or more, the Agency requires a completion certificate completed by a professional engineer licensed in the State where the Project was completed as a condition of an award.
(12) Environmental requirements. Environmental review documentation must comply with the requirements in 7 CFR part 1b.
(13) Architectural barriers. All facilities intended for or accessible to the public or in which physically handicapped individuals may be employed must comply with the Architectural Barriers Act of 1968 (42 U.S.C. 4151 et seq.) as implemented by 41 CFR 101-196, section 504 of the Rehabilitation Act of 1973 (42 U.S.C. 1474 et seq.) as implemented by 7 CFR parts 15 and 15b, and Titles II and III of the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.).
(14) Seismic safety. All new structures, fully or partially enclosed, used or intended for sheltering individuals or property will be designed with appropriate seismic safety provisions in compliance with applicable local, state, Tribal, and federal law, such as the Earthquake Hazards Reduction Act of 1977 (42 U.S.C. 7701 et seq.) and Executive Order 13717, “Establishing a Federal Earthquake Risk Management Standard.”
(15) Bioenergy. For Bioenergy Projects, woody biomass feedstock from National Forest System land or public lands cannot be used as a higher value wood-based product.
(16) Dedicated metering. The Project must have a dedicated meter(s). For example, if an Applicant has one meter that covers its Rural Small Business and its residence, the Applicant must install a separate meter that is dedicated to the Rural Small Business to allow the energy generated to be measured.
(17) Residential use exceptions. Only the following uses of energy related to residential use are eligible for the program.
(i) Providing energy through a community solar subscription program where the End Users do not own the assets;
(ii) Providing energy for nursing homes and assisted living facilities that provide full-time 24 hours a day, seven days a week, licensed medical care for residents; and
(iii) Providing energy for for-profit hotels that provide short-term housing (30 days or less).
(18) Simple Payback Period. The Simple Payback Period must be equal to or less than the Agency approved Useful Life of the RES or EEI.
(19) Energy Storage Systems including BESS. For RES Projects with an associated energy storage system, the total Annual Energy Production of the RES is limited to a capacity of 120 percent of the annual energy consumption of the Applicant for the 12 months prior to project installation or the maximum production allowable by the interconnected utility, which shall not exceed 120 percent of annual energy consumption. The size of the energy storage system must not exceed 100 percent of the size of the RES with which it is paired.
(20) Permits and codes. The completed Project comply with all applicable local, State, Tribal, and Federal codes and all required permits must be obtained.
(b) Ineligible projects. Projects that include one or more of the following are ineligible for assistance under this subpart:
(1) Amount requested. The application requests less than the minimum or more than the maximum award amount.
(2) Research and development. The Project includes research and development, as defined in 2 CFR 200.1, or trials, demonstration units, and pilot projects.
(3) Technology. The Project involves technology (including the system, improvements, process, and components) that is not Commercially Available.
(4) Residential. The Project includes residential RES or EEI, including, but not limited to, primary residences, such as apartments, single-family homes, and residences attached to businesses, in-home businesses, farm labor housing, apartment complexes, bed and breakfasts, and vacation rentals by owner (e.g. VRBOs, Airbnbs), regardless of whether the owner lives on-site or not.
(5) Use of energy. The energy is used for residential purposes, except for the following uses:
(i) Providing energy through a community solar subscription program where the End Users do not own the assets;
(ii) Providing energy for nursing homes and assisted living facilities that provide full-time 24 hours a day, seven days a week, licensed medical care for residents; and
(iii) Providing energy for for-profit hotels that provide short-term housing (30 days or less).
(6) Co-firing with non-Renewable Energy sources. RES Projects that use dual fuel sources where at least one source is not renewable. Non-Renewable Energy sources include, but are not limited to the following: fossil fuels, natural gas, petroleum-based products, materials such as coal, and other non-renewable fuels, oils, and chemicals, tires and plastic.
(7) RES Retrofitting Projects. The Project retrofits an existing ground mount solar or wind RES or any solar or wind RES on Cropland.
(8) EEI replacement Projects. The Project replaces the same specific EEI Equipment that had previously received funds under this subpart prior to the end of the Useful Life, as specified in the FAA, even if it is more energy efficient than the previously funded improvement.
(9) Multiple technologies. The Project utilizes two or more different types of RES technologies that are not incorporated into a Hybrid System.
(10) Multiple locations. The Project installs an RES or an EEI at more than one location.
(11) Cropland installation. The Project involves a ground mount solar photovoltaic system or wind turbine installed on Cropland.
(12) Rated System Size. The Project involves the installation or retrofit of a Hydroelectric System Project with a Rated System Size of greater than 30 MW.
(13) Historical Energy Usage Documentation. The Project involves ground mount solar photovoltaic or ground mount wind systems that cannot document commensurate historical energy usage.
(14) Mobile system. The Project involves an RES not directly mounted on a vehicle that is used to carry out the Applicant's full-time business operations, or the Project involves EEI to any vehicle.
(15) Dispensing energy at retail. The Project includes a mechanism for dispensing energy at retail are not eligible.
(16) Labor only Projects. The Project includes only labor costs and no Equipment and materials costs for the RES or EEI.
(17) Distribution only Projects. The Project includes only moving Renewable Energy from one point to another.
(18) Storage systems. The Project involves the following activities related to storage systems:
(i) Retrofitting an existing RES to add an energy storage system. Includes Battery Energy Storage Systems as well as other energy storage systems.
(ii) Stand-alone energy storage systems. Includes Battery Energy Storage Systems as well as other energy storage systems.
(19) Foreign components. The Project includes a solar photovoltaic system or wind turbine consisting of any component made in a country named as a foreign adversary as listed in 15 CFR 791.4, with the exception that Projects that were installed prior to the publication date of this regulation are exempt. All other completeness and eligibility requirements identified in this subpart must be met.
(20) REAP funding limitation. The Project includes a REAP funding request where the total amount of REAP funding (grant and guaranteed loan) would represent more than 75% of the Project Cost.
(21) Unallowable costs. The Project budget includes more than 25 percent of costs as unallowable costs. Projects that include 25 percent or less of unallowable costs will have the unallowable costs removed prior to considering other eligibility factors. Unallowable costs are identified in § 4280.125(b).
(22) Conflict of interest. The Project includes any conflict of interest. See § 4280.106 for more information on conflict of interest.