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News From the Environmental and Energy Study Institute
122 C St. N.W. . Washington , D.C. . Suite 630.202-628-1400 .www.eesi.org
Carol Werner, Executive Director

Summary of FY04 Notice of Funding Availability (NOFA) for 
Renewable Energy Systems and Energy Efficiency program

May 5, 2004 

The United States Department of Agriculture (USDA) has begun to solicit proposals for the Renewable Energy Systems and Energy Efficiency Improvements Program (Section 9006) which is authorized under Title IX, of the 2002 Farm Bill. The bill makes available $22.8 million in competitive grant funds for fiscal year (FY) 2004 to purchase renewable energy systems and make energy efficiency improvements for agricultural producers and rural small businesses. Half of the grant funds will be allocated for energy efficiency grant requests and the remaining half for renewable energy grant requests. Grant awards will not exceed 25 percent of the eligible project costs. Due to the time constraints for implementing this program, the Office of Rural Development will once again only institute the grant program (no loans) for FY 2004. 

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 $2,500* and $500,000.

• Applications for energy efficiency improvements must be between $2,500* and $250,000.

• One applicant may apply separately for one energy efficiency grant and a renewable energy grant, with a combined maximum grant award of $750,000.

Application dates

Applications must be completed and submitted to the appropriate USDA State Rural Development Office postmarked no later than July 19, 2004, 75 days* after the publication of the Federal Register Notice on May 5. Grant awards will be announced by September 30, 2004. See 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; they will only be used for commercial or pre-commercial technology.

• Technical reviewers will assess the allowable amount of energy input from a nonrenewable energy source on a per case basis for a proposed renewable energy system.

• Eligible projects for energy efficient improvements must conserve energy equal to 20 percent* of at least the last 12 months usage and pay for itself within 11 years or less through energy cost savings.

• The applicant will be responsible for performing a National Environmental Policy Act (NEPA)* review taking into account environmental issues and safety concerns with emphasis on land use, air quality, water quality, noise pollution, soil degradation, wildlife, habitat fragmentation, aesthetics, odor, and other construction and installation issues applicable to this type of technology. The environmental review must be completed with enough time for funds to be obligated by September 30, 2004. Proposed projects that require the completion of an Environmental Impact Statement (EIS) may not be selected.*

Leveraged Funds

Rural Development grant funds may be used to pay up to 25 percent of the eligible project costs. In-kind contributions may be used to meet 10% of the 75 percent match requirement, however applicant in-kind contributions and federal grants cannot be used.* 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. Renewable energy technologies being considered include: solar, wind, geothermal, biomass, and hydrogen (only if produced from renewable sources). Small agricultural producers 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 energy efficiency projects submitted by small agricultural producers 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 of greater than $50,000* 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 as well as recommendation and opinion of the independent consultant.

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 start-up 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.

* Denotes changes from FY03 NOFA

Note: FY04 NOFA is significantly longer than last year with specific application requirements for each different renewable energy technology. We will be looking more closely at these in order to provide more detailed information and to be able to answer further questions

Click here to see FY04 NOFA.

Click here to see summary of FY03 NOFA.

Click here for corrections made to FY04 NOFA (May 7, 2004)

 

Click here for a PDF version of this Press Release

 

For More Information Contact Alexandra Morel at 202-662-1885 or amorel@eesi.org 

 

 

 

 

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