Grants For Renewable Energy Projects

Grants For Renewable Energy Projects

February 01, 2005

by Jana Dimitrova, in Washington

Project developers using nascent renewable energy technologies in the United States may qualify for grants from the US government. Grants are also available for renewable power projects developed on Indian reservations. The Department of Energy administers most of the grants.

Biomass Projects

The Department of Energy, along with the Department of Agriculture, will provide grants for “bioenergy,” “biofuel,” “biopower” and related processes that show commercial promise under a “biomass research and development initiative.”

“Bioenergy” refers to energy produced from organic matter, or material like plants that was once living. The material is called “biomass.” “Biofuel” is fuel made from biomass or from processing and conversion derivatives, including ethanol, biodiesel, and methanol. “Biopower” means the use of biomass feedstock to produce electric power or heat through direct combustion of the feedstock, through gasification and then combustion of the resultant gas, or through other thermal conversion processes. Power may be generated with engines, turbines, fuel cells, or other equipment.

A grant applicant must be a US entity. It can be a private sector entity, an institution of higher education, a national laboratory, a federal or a state research agency, a non-profit organization, or a consortium of two or more of the listed entities. For projects that receive funding from DOE and that include a national laboratory as part of a consortium, the laboratory may not receive more than 50% of the total grant.

An applicant must submit a pre-application by February 15, 2005. The full applications must be submitted by April 15, 2005.

An applicant may submit multiple, unique proposals and thus respond to multiple topics. Each individual application must respond to only one of four following technical topic areas: development and production of feedstock, development of biomass-based products, use of biomass and integrated resource management, or an incentive analysis for commercialization of the project.

Each application will be considered by both the Department of Energy and the Department of Agriculture; however, successful applicants will not receive funding from both departments for the same project. The applicant must bear at least 20% of the total project cost. The greater the applicant’s share of the total project cost, the more likely the project will receive the grant.

The total grants under this program for 2005 is expected to be $15 million. The maximum individual grant will be $2 million and the minimum will be $200,000. The grant may be disbursed ratably over one to three years.

In 2004, a total of $25 million in grants was awarded to 21 projects. Table 1 contains a sample of projects selected for the grants.

Indian Reservation Projects

The Department of Energy will provide grants of up to $500,000 per project for renewable energy projects on “tribal lands.”

All applications must be received by February 4, 2005 via the Department of Energy’s website. There may be another round of grants next year.

A grant may be used for feasibility studies or for the implementation of projects based on such studies. Tribal lands refer to Indian reservations, public domain Indian allotments, former Indian reservations in Oklahoma, land held by incorporated native-American groups, as well as certain other Indian communities.

The applicant must be a federally-recognized Indian tribe, band, nation or other organized group or community, including any Alaska native village, region or village corporation that is federally-recognized as eligible for the special programs and services provided by the US to Indians. There are currently over 550 federally-recognized tribes in the US.

Eligible technologies include photovoltaic, concentrating solar power, solar thermal systems, wind, biomass power, hydroelectric, geothermal electric generation, geothermal resources for direct heating or cooling applications, and other renewable or renewable hybrid systems.

An application for a grant should demonstrate the potential sustainability of renewable energy development, including the potential economic and environmental benefits to the tribal community. The application must identify and provide evidence of the available renewable energy resource, tribal needs for energy within the community or for export off the reservation, the potential for job creation, potential for obtaining commitments for local energy use or power purchase agreements, the potential for economic and environmental benefits to the tribal community, and the potential for future development. The application should also address how renewable energy development will integrate with the cultural, social, and long-term goals of the tribe. The application should finally identify how the proposed project will build “human capacity”within the tribe.

The project must demonstrate the long-term economic sustainability and include a tribal council resolution and a statement of commitment from each project participant. If a tribal council resolution cannot be obtained prior to submission, a statement of commitment from an authorized tribal representative and a plan to obtain a resolution will be accepted. The ability of the applicant to obtain financing and commitments for power purchase agreements (i.e., for local use or for export) will be major factors in the selection of the winners.

The Department of Energy anticipates total grants of $1 million to $1.7 million to be available in 2005. The maximum grant will be $200,000 for a feasibility study and $300,000 for development of a project. Five to 10 feasibility study awards and three to five development project awards are expected in 2005. The grants may be distributed ratably over a period of one to three years.

For feasibility studies, the developer is encouraged to contribute to the cost, but is not required to. For development projects, the developer must bear at least 20% of the project cost. In both cases, applicants that bear a greater portion of the cost than the other applicants will be favored.

In 2003, approximately $2.1 million was awarded under this program, and in 2004, $900,000 was awarded. Table 2 shows a sample of winners from 2004.

Other Opportunities

A number of other grants were available in 2004 for energy projects from the Department of Energy. These included grants for the development and maintenance of testing standards for solar energy systems, a million solar roofs initiative, a national accreditation and certification program for installation and acceptance of photovoltaic systems, as well as sponsorship of conferences that advance solar energy related dialogue.

The Department of Energy does not expect to provide similar grants in 2005 unless additional funding is provided by Congress. Instead, the department does anticipate grants will be available for studies and development of distributed wind technologies in 2005.