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Josh Alban, (202) 662-1885

Summary of Notice of Funding Availability (NOFA) for Renewable Energy Systems and Energy Efficiency Improvements Program

The Rural Business-Cooperative Service (RBS) has begun to solicit proposals for the Renewable Energy Systems and Energy Efficiency Improvements Program, which is authorized under Title IX, Section 9006 of the 2002 Farm Bill. The bill makes available $23 million in competitive grant funds for fiscal year (FY) 2003 to purchase renewable energy systems and make energy improvements for agricultural producers and rural small businesses. The grant request must not exceed 25 percent of the eligible project costs. Due to the time constraints for implementing this program, RBS has decided to institute only the grant program (no loans) for FY 2003. Click here to see the NOFA for the Renewable Energy Systems and Energy Efficiency Improvements Program.

Grant amounts

• Applications for renewable energy systems must be between $10,000 and $500,000.
• Applications for energy efficiency improvements must be between $10,000 and $250,000.

Application dates

Applications must be completed and submitted to the appropriate United States Department of Agriculture (USDA) State Rural Development Office postmarked no later than June 6, 2003. Grant awards will be announced by September 30, 2003. See the NOFA for a list of State offices.

Eligibility

• Applicant must be an agricultural producer or rural small business. The applicant must also have demonstrated financial need. In the case of an applicant that is applying as a rural small business, the business headquarters must be in a rural area and the project to be funded also must be in a rural area.
• The proposed project must be for the purchase of a renewable energy system or to make energy efficiency improvements and must be located in a rural area. The applicant must be the owner of the system and control the operation of the proposed project. A third-party operator may be used to manage the operation or proposed project. Grant funds are not for research and development; therefore, they will only be used for commercial or pre-commercial technology.
  

  o A proposed renewable energy system can use up to 25 percent of total energy input from a nonrenewable energy source for necessary and incidental requirements of the energy system.
  o Eligible projects for energy efficient improvements must conserve energy equal to 15 percent of at least the last 12 months usage and pay for itself within 11 years or less through energy cost savings.
  o RBS is required to assess the potential environmental impacts of a proposed action prior to commitment of federal financial resources to the project. If an environmental review cannot be completed in sufficient time for grant funds to be obligated by September 30, 2003, grant funds will not be awarded.

Leveraged Funds

RBS grant funds may be used to pay up to 25 percent of the eligible project costs. In-kind contributions and other federal grants may not be used to meet the 75 percent requirement. In-kind contributions are defined as applicant or third-party real or personal property or services benefiting the federally assisted project or program that are contributed by the applicant or a third party.

Evaluation Criteria

• Renewable energy system proposals will be given priority based on the quantity of energy to be replaced or generated, the anticipated public health and sanitary benefits of the project, the commercial availability of the system to be used, and the cost effectiveness (return on the cost of investment) of the project in general. Applicants requesting smaller amounts of funding (less than $100,000) will be given priority over larger requests, and applicants able to leverage significant amount of funds will also be given preference. Finally, preference will be given if the system is to be monitored and managed by a third-party operator.
  
• Energy efficiency improvements proposals will be given priority based on anticipated energy savings from the project as well as the cost effectiveness of the project. As with renewable energy system grants, preference will be given to projects requesting smaller amounts of funding ($10,000-$50,000) and applicants with significant leveraged funds.

Energy audits and feasibility studies:

• Each application for an energy efficiency grant must include an energy audit written by an independent, qualified entity that documents current energy usage, recommended potential improvements and their costs, energy savings from these improvements, dollars saved per year, and weighted-average payback period in years.
• Each application for a renewable energy system grant must include a project-specific feasibility study prepared by a qualified independent consultant that contains an analysis of the market, financial, and management feasibility of the proposed project.

Eligible/Ineligible uses for energy system and energy efficiency grants
Eligible uses of funds include the purchase and installation of equipment, construction of or improvements to existing facilities, retrofitting, energy audits, and several other expenses relating to the up-start of the project. Ineligible uses of funds include land acquisition, capital leases, working capital, vehicles, or funding of political or lobbying activities, to name a few. See the NOFA for further details.