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Projects must be for the purchase of a renewable energy system or to make energy efficiency improvements. Eligible renewable energy projects include systems that generate energy from wind, solar, biomass, or geothermal source or that produce hydrogen derived from biomass or water using a renewable energy source. Renewable energy projects can include the generation of electricity, heat, fuels, or hydrogen. Energy efficiency projects typically involve installing or upgrading equipment that results in a significant reduction in energy use from current operations.
Further requirements as outlined in the regulations are:
- The project must be located in a rural area.
- The project must be for a pre-commercial or commercially available and replicable technology.
- The project must be technically feasible.
- The applicant must be the owner of the system and control the operation and maintenance of the proposed project. A qualified third-party operator may be used to manage the operation and/or maintenance of the proposed project.
- All projects must be based on satisfactory sources of revenues in an amount sufficient to provide for the operation and maintenance of the system or project.
Grant requests must not exceed 25% of the eligible project costs. Eligible project costs include:
- Post-application purchase and installation of equipment, except agricultural tillage equipment and vehicles;
- Post-application construction or project improvements, except residential;
- Energy audits or assessments;
- Permit fees;
- Professional service fees, except for application preparation;
- Feasibility studies;
- Business plans;
- Retrofitting; and
- Construction of a new facility only when the facility is used for the same purpose, is approximately the same size, and based on the energy audit will provide more energy savings than improving an existing facility. Only costs identified in the energy audit for energy efficiency projects are allowed.
Guaranteed loan requests must not exceed 50% of the eligible project costs. In addition to the nine eligible project costs for grants listed above, eligible project costs for guaranteed loans also include:
- Working capital
- Land Acquitision
Rural Development combined grant and guaranteed loan funding packages will not exceed 50% of eligible project cost, with the grant portion not to exceed 25% of eligible project costs.
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