Allowable and unallowable uses of funds are described as follows:

(a) Allowable uses of funds. The following types of activities and expenses are allowable, provided that they are directly related to the approved RES or EEI Project, incurred as part of the installation of the RES or EEI, and integral to the operation of the RES or EEI. Additional information on allowability of costs can be found at 2 CFR part 200, subpart E, for all entity types.

(1) Purchase and installation of new or Refurbished Equipment related to the installation and/or operation of the RES or EEI, provided that the Project budget includes both Equipment and installation of the system or improvements as a whole;

(2) Construction related to the installation of the RES or EEI, Retrofitting, replacement, and improvements;

(3) Energy Assessment or Energy Audit, unless the cost was charged in whole or in part to another Federal Award;

(4) Resource Assessment, unless the cost was charged in whole or in part to another Federal Award;

(5) Fees for construction permits and licenses and fees required by an Interconnection Agreement;

(6) Architectural fees;

(7) Engineering fees;

(8) Installation of a dedicated meter for an RES Project;

(9) Up to 25 percent of Project Costs for Distribution Components and Ancillary Infrastructure for RES Projects that include Distribution Components and Ancillary Infrastructure; and

(10) Up to 10 percent of the award amount to construct, improve, or acquire broadband infrastructure related to the project financed, subject to the requirements of 7 CFR part 1980, subpart M;

(b) Unallowable uses of funds. Activities and expenses related to any of the following are unallowable:

(1) Real Property;

(2) Agricultural, lawn, and garden Equipment and power tools, including, but not limited to: tractors, bailers, lawn mowers, weed whipper/eaters, cultivators, skid steers, bulldozers, chain saws, and wood splitters;

(3) Used Equipment;

(4) Equipment not wholly owned by the Recipient, for example, utility-owned substation upgrades, overhead lines, and poles;

(5) Vehicles, including motorized, unmotorized, and electric vehicles, and modifications that are used to improve a vehicle's ability to propel itself (e.g., modifying an existing vehicle's engine to run on renewable fuels or replacing an older vehicle with a new, more efficient vehicle);

(6) Lease payments, including lease to own or capitalized leases;

(7) Feasibility studies;

(8) Monthly meter fees;

(9) Insurance;

(10) Operations and maintenance;

(11) Extended warranties;

(12) Perimeter fencing;

(13) Costs for labor completed by any individual who owns the Applicant entity;

(14) Goods or services from an individual or entity who has a conflict of interest with the Recipient (see § 4280.106);

(15) Funds used for political or lobbying activities;

(16) Funds used to repay any Federal direct or guaranteed loans or other Federal debt or judgment;

(17) Costs for the preparation of the grant application;

(18) Expenses not directly related to the funded Project, including construction or Equipment (e.g., the foundation for a building where an RES is installed, storage-only grain bins connected to drying systems, or the roof of a building where solar panels are attached);

(19) Expenses paid for by another Federal Award;

(20) Activities that are considered unallowable by the applicable cost principles, most of which are included in 2 CFR part 200, subpart E; and

(21) Costs incurred outside the Project Period.