21110 Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Rules and Regulations 

DEPARTMENT OF AGRICULTURE 

Rural Business-Cooperative Service 

Rural Utilities Service 

7 CFR Part 4280 

RIN 0575–AA76 

Rural Energy for America Program 

AGENCY: Rural Business-Cooperative 

Service and Rural Utilities Service, 

USDA. 

ACTION: Interim rule with request for 

comments. 

SUMMARY: The Rural BusinessCooperative Service (Agency) is 

establishing an interim rule for the 

Rural Energy for America Program 

(REAP), which is authorized under the 

Food, Conservation, and Energy Act of 

2008. This interim rule modifies the 

existing grant and guaranteed loan 

program for renewable energy systems 

and energy efficiency improvements. In 

addition, it adds a grant program for 

feasibility studies for renewable energy 

systems and a grant program for energy 

audits and renewable energy 

development assistance, as provided in 

the Food, Conservation, and Energy Act 

of 2008. 

DATES: This interim rule is effective 

April 14, 2011. Written comments on 

this interim rule must be received on or 

before June 13, 2011. 

ADDRESSES: You may submit comments 

on this interim rule by any of the 

following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Submit written comments via 

the U.S. Postal Service to the Branch 

Chief, Regulations and Paperwork 

Management Branch, U.S. Department 

of Agriculture, STOP 0742, 1400 

Independence Avenue, SW., 

Washington, DC 20250–0742. 

• Hand Delivery/Courier: Submit 

written comments via Federal Express 

Mail or other courier service requiring a 

street address to the Branch Chief, 

Regulations and Paperwork 

Management Branch, U.S. Department 

of Agriculture, 300 7th Street, SW., 7th 

Floor, Washington, DC 20024. 

All written comments will be 

available for public inspection during 

regular work hours at the 300 7th Street, 

SW., 7th Floor address listed above. 

FOR FURTHER INFORMATION CONTACT: 

Diane Berger, Energy Branch, U.S. 

Department of Agriculture, 1400 

Independence Avenue, SW., Stop 3225, 

Washington, DC 20250–3201; telephone 

(202) 260–1508. E-mail: 

diane.berger@wdc.usda.gov. 

SUPPLEMENTARY INFORMATION: 

Executive Order 12866 

This interim rule has been reviewed 

under Executive Order (EO) 12866 and 

has been determined to be significant by 

the Office of Management and Budget. 

The EO defines a ‘‘significant regulatory 

action’’ as one that is likely to result in 

a rule that may: (1) Have an annual 

effect on the economy of $100 million 

or more or adversely affect, in a material 

way, the economy, a sector of the 

economy, productivity, competition, 

jobs, the environment, public health or 

safety, or State, local, or tribal 

governments or communities; (2) Create 

a serious inconsistency or otherwise 

interfere with an action taken or 

planned by another agency; (3) 

Materially alter the budgetary impact of 

entitlements, grants, user fees, or loan 

programs or the rights and obligations of 

recipients thereof; or (4) Raise novel 

legal or policy issues arising out of legal 

mandates, the President’s priorities, or 

the principles set forth in this EO. 

The Agency conducted a benefit-cost 

analysis to fulfill the requirements of EO 

12866. In this analysis, the Agency 

identifies potential benefits and costs of 

REAP to lenders, borrowers, and the 

Agency. The analysis contains 

quantitative estimates of the burden to 

the public and the Federal government 

and qualitative descriptions of the 

expected economic, environmental, and 

energy impacts associated with REAP. 

Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA), Public 

Law 104–4, establishes requirements for 

Federal agencies to assess the effects of 

their regulatory actions on State, local, 

and tribal governments and the private 

sector. Under section 202 of the UMRA, 

Rural Development generally must 

prepare a written statement, including a 

cost-benefit analysis, for proposed and 

final rules with ‘‘Federal mandates’’ that 

may result in expenditures to State, 

local, or tribal governments, in the 

aggregate, or to the private sector of 

$100 million or more in any one year. 

When such a statement is needed for a 

rule, section 205 of the UMRA generally 

requires Rural Development to identify 

and consider a reasonable number of 

regulatory alternatives and adopt the 

least costly, more cost-effective, or least 

burdensome alternative that achieves 

the objectives of the rule. 

This interim rule contains no Federal 

mandates (under the regulatory 

provisions of Title II of the UMRA) for 

State, local, and tribal governments or 

the private sector. Thus, this rule is not 

subject to the requirements of sections 

202 and 205 of the UMRA. 

Environmental Impact Statement 

Under this program, the Agency 

conducts a National Environmental 

Policy Act of 1969 (NEPA), 42 U.S.C. 

4321 et seq., review for each application 

received. To date, no significant 

environmental impacts have been 

reported, and Findings of No Significant 

Impact (FONSI) have been issued for 

each approved application. Taken 

collectively, the applications show no 

potential for significant adverse 

cumulative effects. 

This document has been reviewed in 

accordance with 7 CFR part 1940, 

subpart G, ‘‘Environmental Program.’’ 

Rural Development has determined that 

this action does not constitute a major 

Federal action significantly affecting the 

quality of the human environment, and 

in accordance with NEPA, an 

Environmental Impact Statement is not 

required. Grant and guaranteed loan 

applications will be reviewed 

individually to determine compliance 

with NEPA. 

Executive Order 12988, Civil Justice 

Reform 

This interim rule has been reviewed 

under EO 12988, Civil Justice Reform. In 

accordance with this rule: (1) All State 

and local laws and regulations that are 

in conflict with this rule will be 

preempted; (2) no retroactive effect will 

be given to this rule; and (3) 

administrative proceedings in 

accordance with the regulations of the 

Department of Agriculture’s National 

Appeals Division (7 CFR part 11) must 

be exhausted before bringing suit in 

court challenging action taken under 

this rule unless those regulations 

specifically allow bringing suit at an 

earlier time. 

Executive Order 13132, Federalism 

It has been determined, under EO 

13132, that this interim rule does not 

have sufficient federalism implications 

to warrant the preparation of a 

Federalism Assessment. The provisions 

contained in the rule will not have a 

substantial direct effect on States or 

their political subdivisions or on the 

distribution of power and 

responsibilities among the various 

government levels. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601–612) (RFA) generally 

requires an agency to prepare a 

regulatory flexibility analysis of any rule 


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subject to notice and comment 

rulemaking requirements under the 

Administrative Procedure Act or any 

other statute unless the agency certifies 

that the rule will not have an 

economically significant impact on a 

substantial number of small entities. 

Small entities include small businesses, 

small organizations, and small 

governmental jurisdictions. 

In compliance with the RFA, Rural 

Development has determined that this 

action, while mostly affecting small 

entities, will not have a significant 

economic impact on a substantial 

number of these small entities. Rural 

Development made this determination 

based on the fact that this regulation 

only impacts those who choose to 

participate in the program. Small entity 

applicants will not be affected to a 

greater extent than large entity 

applicants. 

Executive Order 13211, Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use 

The regulatory impact analysis 

conducted for this interim rule meets 

the requirements for EO 13211, which 

states that an agency undertaking 

regulatory actions related to energy 

supply, distribution, or use is to prepare 

a Statement of Energy Effects. This 

analysis finds that this interim rule will 

not have any adverse impacts on energy 

supply, distribution, or use. 

Executive Order 12372, 

Intergovernmental Review of Federal 

Programs 

This program is not subject to the 

provisions of EO 12372, which require 

intergovernmental consultation with 

State and local officials. 

Executive Order 13175, Consultation 

and Coordination With Indian Tribal 

Governments 

United States Department of 

Agriculture (USDA) will undertake, 

within 6 months after this rule becomes 

effective, a series of regulation Tribal 

consultation sessions to gain input by 

elected Tribal officials or their designees 

concerning the impact of this rule on 

Tribal governments, communities, and 

individuals. These sessions will 

establish a baseline of consultation for 

future actions, should any be necessary, 

regarding this rule. Reports from these 

sessions for consultation will be made 

part of the USDA annual reporting on 

Tribal Consultation and Collaboration. 

USDA will respond in a timely and 

meaningful manner to all Tribal 

government requests for consultation 

concerning this rule and will provide 

additional venues, such as webinars and 

teleconferences, to periodically host 

collaborative conversations with Tribal 

leaders and their representatives 

concerning ways to improve this rule in 

Indian country. 

The policies contained in this rule 

will not have Tribal implications that 

preempt Tribal law. 

Programs Affected 

The Rural Energy for America 

Program is listed in the Catalog of 

Federal Domestic Assistance under 

Number 10.868. 

Paperwork Reduction Act 

The information collection 

requirements contained in this interim 

rule have been approved by the Office 

of Management and Budget (OMB) 

under three separate information 

collections. The information collection 

requirements associated with renewable 

energy system and energy efficiency 

improvement grants and guaranteed 

loans, as covered in this Interim Rule, 

has been approved by OMB under OMB 

Control Number 0570–0050. The 

information collection requirements 

associated with energy audit and 

renewable energy development 

assistance grants and with renewable 

energy feasibility study grants have been 

approved by OMB under OMB Control 

Number 0570–0059 and OMB Control 

Number 0570–0061, respectively. 

The collection of information is vital 

for Rural Development to make wise 

decisions regarding the eligibility of 

projects and borrowers in order to 

ensure compliance with the regulations 

and that the funds obtained from the 

Government are used appropriately 

(e.g., used for the purposes for which 

the guaranteed loans were awarded). 

The type of information required 

depends on the type of financial 

assistance being sought. 

E-Government Act Compliance 

Rural Development is committed to 

complying with the E-Government Act, 

to promote the use of the Internet and 

other information technologies to 

provide increased opportunities for 

citizen access to Government 

information and services, and for other 

purposes. 

I. Background 

Rural Development administers a 

multitude of Federal programs for the 

benefit of rural America, ranging from 

housing and community facilities to 

infrastructure and business 

development. Its mission is to increase 

economic opportunity and improve the 

quality of life in rural communities by 

providing the leadership, infrastructure, 

venture capital, and technical support 

that enables rural communities to 

prosper. To achieve its mission, Rural 

Development provides financial support 

(including direct loans, grants, and loan 

guarantees) and technical assistance to 

help enhance the quality of life and 

provide the foundation for economic 

development in rural areas. 

In response to the Farm Security and 

Rural Investment Act of 2002 (FSRIA), 

which established the Renewable 

Energy Systems and Energy Efficiency 

Improvements Program under Title IX, 

Section 9006, the Agency promulgated a 

rule (70 FR 41264, July 18, 2005) 

establishing the RES and EEI program (7 

CFR part 4280, subpart B) for making 

grants, loan guarantees, and direct loans 

to farmers and ranchers (agricultural 

producers) or rural small businesses to 

purchase renewable energy systems and 

make energy efficiency improvements. 

Renewable energy sources eligible for 

funding included bioenergy, anaerobic 

digesters, electric geothermal, direct 

geothermal, solar, hydrogen, and wind. 

Section 9001 of the Food, 

Conservation, and Energy Act of 2008 

(2008 Farm Bill) amended Title IX of the 

FSRIA. Under the 2008 Farm Bill and 

Section 9007 of the amended FSRIA, the 

Agency is authorized to continue 

providing to agricultural producers and 

rural small businesses loan guarantees 

and grants for the development and 

construction of RES and EEI projects. In 

addition to the current set of renewable 

energy projects eligible for funding, the 

2008 Farm Bill expands the program to 

include two new renewable energy 

technologies: hydroelectric and ocean 

energy. Further, the 2008 Farm Bill 

authorizes the Agency to provide grants 

specifically for energy audits, renewable 

energy development assistance, and RES 

feasibility studies. This newly expanded 

program is referred to as REAP, which 

continues the Agency’s assistance to the 

adoption of both renewable energy 

systems and energy efficiency 

improvements through Federal 

government loan guarantees and grants. 

REAP has been operating since 2005 

under 7 CFR part 4280, subpart B, and, 

since the 2008 Farm Bill, through a 

series of Federal Register notices 

implementing the provisions in the 

2008 Farm Bill for RES feasibility 

studies, energy audits, and renewable 

energy development assistance. For the 

RES feasibility studies, these notices 

were published on May 26, 2009 (74 FR 

24769) and August 6, 2010 (75 FR 

47525). For energy audits and renewable 

energy development assistance, these 

notices were published on March 11, 


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2009 (74 FR 10533) and May 27, 2010 

(75 FR 29706). 

This regulation establishes a 

consolidated REAP program by 

including each part of the program in a 

single subpart. Up to now, only the RES 

and EEI grant and guaranteed loan 

program requirements have been 

implemented under 7 CFR part 4280, 

subpart B and, for requirements 

established by the 2008 Farm Bill, 

through Federal Register notices. The 

requirements for RES feasibility study 

grants and for energy audit and 

renewable energy development 

assistance grants have been 

implemented through a series of Federal 

Register notices. It is, and has been, the 

Agency’s intent to consolidate each of 

these programs into one REAP program. 

Given the history of the 

implementation of this program, as 

described above, it is important to 

immediately implement a regulation in 

an effort to signal full implementation of 

REAP. Since 2002, the Agency, through 

its operation of the program, has 

developed experience regarding how 

this authority can be used to address 

renewable energy and energy efficiency 

issues facing agricultural producers and 

rural small businesses. The interim rule 

responds to these lessons learned. In 

addition, in determining to publish this 

regulation as an interim rule, the 

Agency is balancing the interests of not 

forestalling the implementation and 

administration of the program while it 

develops program regulations versus its 

desire to obtain public comment. For 

these reasons, the Agency chose to 

publish this as an interim rule as 

opposed to publishing it as a proposed 

rule with a separate notice of funding 

availability for the Fiscal Year 2011 

funding cycle as it has done in previous 

fiscal years. By publishing an interim 

rule, the Agency is able to obtain public 

comment regarding the operation of the 

program for Fiscal Year 2011. The 

Agency believes that this approach is in 

the best interest of the public. 

Following the publication of this 

interim rule, the Agency will propose 

and promulgate a subsequent rule for 

REAP to replace this interim rule. 

Interim rule. USDA Rural 

Development is issuing this regulation 

as an interim rule, effective April 14, 

2011. All provisions of this regulation 

are adopted on an interim final basis, 

are subject to a 60-day comment period, 

and will remain in effect until the 

Agency adopts the final rule. 

II. Development of the Interim Rule for 

REAP 

As noted above, this interim rule 

establishes a consolidated REAP 

program by including each part of the 

program in a single subpart. The 

provisions in the interim rule are based 

on the following: 

1. The existing program found at 7 

CFR part 4280, subpart B, for renewable 

energy systems and energy efficiency 

improvements as modified by the 2008 

Farm Bill and the Fiscal Year 2010 

notice. 

2. The Fiscal Year 2010 notices that 

implement the 2008 Farm Bill 

provisions for RES feasibility studies, 

energy audits, and renewable energy 

development assistance. 

3. The inclusion of flexible fuel 

pumps that dispense blended liquid 

transportation fuel as an important new 

component of the Federal government’s 

strategy for encouraging the use of 

renewable fuels. Section 9007(a)(2) 

authorizes the Agency to fund parts of 

renewable energy systems as well as 

renewable energy systems in whole. The 

Agency has determined that a flexible 

fuel pump is a uniquely critical aspect 

of a biofuel renewable energy system 

defined as the conversion of the biomass 

through the dispensing of the biofuel to 

a vehicle. 

The policy rationale for the Agency to 

include flexible fuel pumps in REAP is 

to address a barrier that the Agency has 

determined impedes the broader use of 

biofuels as a liquid transportation fuel 

in the United States. For example, one 

major aspect of this barrier derives from 

two scenarios. The first is one of an 

insufficient availability of higher 

ethanol-blend fuels in the market place 

that discourages Americans from 

purchasing flexible fuel vehicles that 

can burn such higher ethanol-blend 

fuels and does not provide a sufficient 

level of higher ethanol-blend fuel to 

supply the existing flexible fuel vehicle 

fleet to fully take advantage of the fleet’s 

ability to consume additional biofuel. 

The second is one of an insufficient 

number of flexible fuel vehicles on the 

road to encourage fuel station owners to 

expend the capital necessary to install 

flexible fuel pumps in response to 

market forces. By allowing REAP to 

provide financing through grants and 

loan guarantees to encourage the 

installation of flexible fuel pumps in 

rural areas, the Agency believes it can 

help overcome this barrier. The Agency 

acknowledges that there are other 

similar biofuel examples, including 

barriers to biodiesel. 

The Agency recognizes that REAP is 

designed to address a variety of 

renewable energy and energy efficiency 

goals. With the inclusion of flexible fuel 

pumps for REAP funding, the Agency 

will ensure that it will not ignore the 

other important goals and purposes of 

the program. 

4. The removal of citizenship 

requirements which the Agency has 

determined is in the best interest of 

furthering the Administration’s goal of 

increasing the use of renewable energy 

systems and energy efficiency 

improvements to include applicants 

who are not U.S. citizens, provided the 

proposed project is located in a State 

and the applicant has a place of 

business located in a State. In addition, 

this change is consistent with recent 

litigation. 

5. The modification of the rural area 

requirement for projects proposed by 

agricultural producers to allow such 

projects to be located in non-rural areas. 

The Agency determined to remove the 

rural area requirement as it applies to 

agricultural producers under REAP for 

several reasons. First, the Agency 

wanted REAP to be consistent with the 

Biorefinery Assistance Program, the 

Repowering Assistance Program, and 

the Advanced Biofuel Payment Program. 

The three programs do not include a 

rural area requirement in their 

respective interim rules published in 

February 2011. Second, the Agency has 

determined that there are a number of 

agricultural producers that operate in 

non-rural areas that can benefit from 

REAP. Such agricultural producers may 

include commercial nurseries and truck 

farms (the growing of one or more crops 

on a scale necessary for shipment to 

distant markets) that are located near 

urban areas. 

6. The addition of a new paragraph to 

clarify how the Agency addresses 

changes in equipment for energy 

efficiency improvements for 

determining eligible project costs. 

7. The replacement of ‘‘return on 

investment’’ with ‘‘simple payback.’’ 

Using the term ‘‘return on investment’’ 

was creating confusion because the 

calculations used for this scoring 

criterion are not typically understood as 

return on investment. Therefore, we are 

clarifying the calculations and using the 

phrase ‘‘simple payback’’ because that is 

what we are calculating. 

8. The correction of several 

inconsistencies in the previous 

implementation of 7 CFR part 4280, 

subpart B and in the Fiscal Year 2010 

notices implementing REAP. 

By taking into consideration each of 

the above factors, the Agency has 

developed an interim rule for REAP. 

The Rural Energy for America Program 

The following paragraphs discuss the 

interim rule in terms of changes from 

the current program as it relates to: 

• General Provisions; 


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• RES and EEI grants; 

• RES and EEI guaranteed loans; 

• RES feasibility study grants; 

• EA and REDA grants; and 

• Appendices. 

The changes discussed are how the 

interim rule varies from the existing 

RES and EEI program in 7 CFR part 

4280, subpart B, and the Fiscal Year 

2010 Federal Register notice for the RES 

and EEI program, and from the 

implementation of RES feasibility study 

grants and EA and REDA grants as 

found in their respective Fiscal Year 

2010 notices. 

1. General Provisions 

The organization of this section 

follows the first six sections of the 

current regulation at 7 CFR part 4280, 

subpart B, with changes as discussed 

below. The interim rule includes several 

new sections to the general provisions, 

the contents of which mostly 

consolidate existing provisions from the 

Fiscal Year 2010 Notices that are 

applicable to each of the programs 

within REAP. Lastly, the applicant 

eligibility and project eligibility sections 

of the existing rule have been relocated 

to the RES and EEI grants section of the 

rule and modified as needed. 

Purpose (§ 4280.101) 

The primary revision to this section is 

adding reference to provision of grants 

for conducting RES feasibility studies 

and for energy audits and renewable 

energy development assistance. These 

provisions are being added as a result of 

the 2008 Farm Bill. In addition, 

reference to a direct loan program has 

been removed because direct loans are 

no longer authorized under the 2008 

Farm Bill. Lastly, the Agency also 

removed current 7 CFR 4280.101(b), 

which the Agency has determined is 

unnecessary for the rule. Additional 

conforming changes were made in 

subsequent sections, but are not 

necessarily identified below. 

Organization of Subpart (§ 4280.102) 

This section is basically the same as 

existing 7 CFR 4280.102, in that it 

identifies the organization of the rule. 

The primary differences are editorial in 

nature, simplifying the discussion, 

expanding the section to cover FS, EA, 

and REDA grants and identifying more 

clearly the rule’s organization. 

Definitions (§ 4280.103) 

This section was revised by adding, 

revising, and deleting a number of 

terms. The major revisions were the 

addition of definitions from the Fiscal 

Year 2010 notices for the RES/EEI, FS, 

EA, and REDA grants. The following 

present the changes made. 

Added Terms 

• Administrator. This term was added 

for clarity. 

• Blended liquid transportation fuel. 

This term was added to implement the 

revision to allow retail pumps that 

combine and dispense a blended liquid 

transportation fuel to be eligible for 

grant funding. 

• Departmental regulations. This 

term was added and is now referenced 

in the rule. 

• Flexible fuel pump. This term was 

added because the Agency will allow 

flexible fuel pumps as an eligible RES 

project. The term refers to a retail pump 

that combines and dispenses a blended 

liquid transportation fuel or that 

dispenses a blended liquid 

transportation fuel with a percentage 

volume of renewable fuel in excess of 

the Federal or State requirements, 

whichever is higher. 

• Hydroelectric energy, hydropower, 

ocean energy and small hydropower. 

These terms were added in response to 

the 2008 Farm Bill provisions that 

authorize these qualifying sources of 

renewable energy. The Agency is 

limiting the size of eligible hydropower 

projects to those that have a rated power 

of 30 megawatts or less. The Conference 

Managers Report to the 2008 Farm Bill 

specifically mentions allowing small 

hydroelectric systems to be eligible 

under the program. Per consultation 

with the U.S. Department of Energy, the 

Agency is defining small hydropower 

systems as having a rated power of 30 

megawatts or less, which includes 

hydropower projects commonly referred 

to as ‘‘micro-hydro’’ and ‘‘mini-hydro.’’ 

Thus, if the hydropower system has a 

rated power of more than 30 megawatts, 

it would not be eligible for this program. 

• Institution of higher education, 

instrumentality, and public power 

entity. These terms were added because 

they are three of the eligible entities for 

energy audit and renewable energy 

development assistance grants. 

• Rated power. This term was added 

to clarify the definitions in which it is 

used. 

• Renewable biomass. This term was 

added as a result of the 2008 Farm Bill. 

• Renewable energy development 

assistance, renewable energy site 

assessment, and renewable energy 

technical assistance. These terms were 

added to implement the Energy Audit 

and Renewable Energy Development 

Assistance grants. 

• Rural Energy for America Grant 

Agreement. This term was added for 

clarity. 

• Simple payback. This term was 

added to implement the scoring 

criterion for simple payback. It includes 

the method to be used to calculate 

simple payback. 

Deleted Terms 

• Biomass. This term has been 

replaced, under the 2008 Farm Bill, 

with ‘‘renewable biomass.’’ 

• Demonstrated financial need. This 

term was deleted because it is no longer 

part of the program as found in the 2008 

Farm Bill. 

• In-kind contribution, loan-to-value, 

and parity. These terms were deleted 

because they are not used in the rule. 

Revised Terms 

• Agency. This term was updated to 

refer to the Rural Energy for America 

Program rather than the 9006 program. 

• Anaerobic digester project. This 

term was revised in order to allow 

facilities producing natural gas in a 

compressed gaseous or liquid state to 

qualify as an anaerobic digester project. 

• Biogas. This term was revised to 

refer to ‘‘renewable biomass’’ rather than 

to ‘‘biomass.’’ 

• Matching funds. This term was 

revised to remove reference to direct 

loans. 

• Post-application. This term was 

clarified. 

• Power purchase agreement. This 

term was revised by replacing 

‘‘arrangement’’ with ‘‘agreement.’’ 

• Renewable energy. This term was 

revised to conform to changes in the 

2008 Farm Bill, including adding 

reference to ocean and hydroelectric 

energy as renewable energy sources and 

replacing ‘‘biomass’’ with ‘‘renewable 

biomass.’’ 

• Rural or rural area. This term was 

revised to conform to changes provided 

in the 2008 Farm Bill. 

• Small business. In order for the 

Agency to clarify the application of the 

requirement that entities must operate 

independent of governmental control to 

certain Tribal enterprises, this term was 

revised to allow such enterprises to 

remain eligible if they are operated in a 

manner consistent to the Department of 

the Interior’s regulation governing the 

establishment of Section 17 

Corporations. This clarification is 

necessary to enable this program to be 

effectively administered in Indian 

Country. 

• State. This term was clarified by 

adding ‘‘of the United States.’’ 

Exception Authority (§ 4280.104) 

This section was updated to reflect 

the latest language the Agency uses, as 

reflected in the recent Agency energy 


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21114 Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Rules and Regulations 

title interim rules. First, the exercise of 

this exception authority must be in the 

Federal government’s interest. Under 

the current rule, this reads in the 

USDA’s interest. Second, the exercise of 

this exception authority must be 

concurred to by the Secretary of 

Agriculture. 

Appeals (§ 4280.105) 

This section was revised by removing 

reference to direct loans to conform to 

the 2008 Farm Bill and deleting the last 

sentence of the section because it is 

inappropriate. 

Conflict of Interest (§ 4280.106) 

This section was revised by removing 

reference to direct loans to conform to 

the 2008 Farm Bill and adding a 

provision specifically prohibiting 

members of, or delegates to, Congress 

from receiving any grant or portion 

thereof or from receiving any benefit 

that might arise therefrom and 

specifically addressing assistance to 

Agency employees and their relatives 

and associates. The Agency added this 

provision to provide greater 

transparency and accountability in 

government. 

USDA Departmental Regulations 

(§ 4280.107) 

This section was added to clearly 

identify the incorporation by reference 

of the Departmental Regulations. 

Laws That Contain Other Compliance 

Requirements (§ 4280.108) 

This section was relocated under the 

‘‘General’’ heading of the rule because it 

applies to each REAP program, with 

minor exceptions. Two of the changes 

made were to remove reference to direct 

loans in the paragraph on civil rights 

compliance because direct loans are not 

part of the program and to add a 

paragraph specific to guaranteed loans 

concerning the Americans with 

Disabilities Act. 

Ineligible Applicants, Borrowers, and 

Owners (§ 4280.109) 

With minor wording changes to make 

it applicable to both grants and 

guaranteed loans, this section replaces 

existing 7 CFR 4280.107(a)(4). 

General Applicant and Application 

Provisions (§ 4280.110) 

With minor wording changes, this 

new section gathers into one place three 

general requirements affecting each 

REAP program concerning: 

• Complete applications; 

• Application withdrawal; and 

• Satisfactory progress. 

Notifications (§ 4280.111) 

This new section gathers into one 

place general requirements affecting 

each REAP program regarding 

notification of applicants and lenders, 

as applicable, if applicants and their 

projects are eligible, if their application 

is determined to be ineligible, and if 

their application receives an award. 

2. Renewable Energy System and Energy 

Efficiency Improvement Grant Program 

Applicant Eligibility (§ 4280.112) 

This section has been reduced to just 

identifying the type of applicant eligible 

(i.e., agricultural producer or rural small 

business, which is unchanged from the 

current rule) because the other 

provisions have been either deleted or 

moved, as discussed below. 

The citizenship requirements 

currently found in 7 CFR 4280.107(a)(2) 

and (3) have been removed (and, in their 

place, the rule requires the project to be 

located in a State as defined in the rule). 

The Agency removed this requirement 

because, after reviewing public 

comments that it sought and received on 

a March 12, 2010, Notice of Contract for 

Proposal (NOCP) for payments to 

advanced biofuels producers, the 

Agency has determined that it is in the 

best interests of furthering the 

Administration’s goal of increasing the 

use of renewable energy systems and 

energy efficiency improvements to 

include applicants who are not U.S. 

citizens, provided the proposed project 

is located in a State and the applicant 

has a place of business located in a 

State. In addition, this change is 

consistent with recent litigation. 

The provisions in existing 7 CFR 

4280.107(a)(4) and in 7 CFR 

4280.107(b), as noted earlier, have been 

relocated to §§ 4280.109 and 

4280.110(c), respectively. 

The demonstrated financial need 

provisions in existing 7 CFR 

4280.107(a)(5) have been removed to 

conform the rule to the 2008 Farm Bill. 

Project Eligibility (§ 4280.113) 

Numerous changes have been made to 

this section for determining whether a 

project is eligible to receive an RES or 

EEI grant under this subpart. 

First. The Agency clarified that energy 

efficiency improvements to existing 

renewable energy systems are eligible 

energy efficiency improvement projects. 

Second. Projects must be located in a 

State, as defined in the rule, as 

discussed above under applicant 

eligibility. 

Third. The applicant must have a 

place of business located in a State, also 

as discussed above under applicant 

eligibility. 

Fourth. The Agency is allowing 

projects for facilities located in nonrural areas to be eligible if the project is 

being proposed by an agricultural 

producer. 

This conforms the rule to other 

programs that serve agricultural 

producers (e.g., those provided by the 

Natural Resource Conservation Service 

and Farm Service Agency), which do 

not have a rural area requirement for 

agricultural producers. Further, the 

authorizing statute (the 2008 Farm Bill) 

does not restrict eligibility of 

agricultural producers to rural areas as 

it does with rural small businesses, 

where the language specifically uses the 

term ‘‘rural’’ in referring to small 

businesses. The Agency does not expect 

the inclusion of projects for facilities 

located in non-rural areas proposed by 

agricultural producers to affect a large 

number of agricultural producers 

because most agricultural producers’ 

facilities are located within rural areas. 

However, in allowing projects by 

agricultural producers for facilities in 

non-rural areas to be eligible, the 

Agency is also requiring that the 

application for such facilities be only for 

renewable energy systems or energy 

efficiency improvements on integral 

components of or that are directly 

related to the facility, such as vertically 

integrated operations, and are part of 

and co-located with the agricultural 

production operation. For example, if an 

agricultural producer grows vegetables 

in a greenhouse located in a non-rural 

area and sells those vegetables at a colocated retail operation, where both the 

greenhouse and the retail operation are 

owned by the applicant, the application 

may consider both the greenhouse and 

the retail operation. However, if the 

retail operation is not co-located with 

the greenhouse, in this example, the 

application may consider only the 

greenhouse and not the retail operation. 

Fifth. If the project is for a 

hydropower project, only those 

hydropower projects with a rated power 

of 30 megawatts or less are eligible. 

Sixth. The project must have 

demonstrated technical feasibility. 

Seventh. The Agency revised the 

provision associated with residential 

costs to clarify the current regulation 

and how residential purposes relate to 

the eligibility of projects under REAP. 

The Agency notes that this provision, 

found in § 4280.113(k), does not 

preclude an applicant from applying for 

funding for the installation of a second 

meter or providing certification in the 

application that any excess power 

generated by the renewable energy 


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system will be sold to the grid and will 

not be used by the applicant for 

residential purposes. 

Qualification for Simplified 

Applications (§ 4280.114) 

The provisions of this section were 

modified by removing the certification 

by the applicant of demonstrated 

financial need. 

RES and EEI Grant Funding (§ 4280.115) 

Several changes were made to this 

section as described below. 

• The prohibition on third-party, inkind contributions was removed 

because it conflicts with the Agency’s 

Departmental Regulations. 

• The Agency added a provision 

specifically addressing energy efficiency 

improvements as eligible project costs 

(see § 4280.115(c)(10)). In the current 

rule, eligible energy efficiency 

improvement costs were included in the 

paragraph addressing construction of 

new EEI projects (see 7 CFR 

4280.110(c)(9)). This is somewhat 

confusing. The new provision clearly 

states that energy efficiency 

improvements as eligible project costs 

are limited to only improvements 

identified in the energy assessment or 

energy audit. This is similar to the 

current text found in 7 CFR 

4280.110(c)(9). The new paragraph also 

covers explicitly how the Agency will 

address the replacement of equipment 

identified in the energy audit as an 

eligible project cost. To illustrate this, 

an example is provided in the rule. 

• The provisions associated with 

determining the amount of a RES or EEI 

grant were updated to reflect the 2008 

Farm Bill (see § 4280.115(g)(4) through 

(g)(6)), which resulted in two 

substantive changes. The first is adding 

consideration of the expected energy 

efficiency of the renewable energy 

system. The second is deleting 

consideration of the extent to which the 

renewable energy system will be 

replicable. 

• Unless otherwise agreed to by the 

Agency, any renewable energy system or 

energy efficiency improvement grant 

agreement under this subpart will 

terminate 2 years from the date the 

Agency signs the agreement. 

Application and Documentation 

(§ 4280.116) 

The primary change to this section 

was to include a new paragraph (a) that 

addresses general application 

requirements covering one funding type 

applications, environmental 

information, foreign technology, and 

commercial application demonstration 

of pre-commercial technology. 

With regard to application content, 

the two primary changes made were to 

remove the requirement to include 

intergovernmental consultation 

comments (such consultation is not 

required for this program) and the 

requirement to certify to and provide 

sufficient information or documentation 

for determination of demonstrated 

financial need. 

Evaluation of RES and EEI Grant 

Applications (§ 4280.117) 

Several changes were made to this 

section as described below. 

First. The paragraphs concerning 

ineligible applications and incomplete 

applications were relocated to the 

General section of the rule. 

Second. Scoring for flexible fuel 

pumps was added to the first scoring 

criterion (see § 4280.117(c)(1)(iv)). 

Third. The return on investment 

criterion was replaced with a simple 

payback criterion to more accurately 

reflect the actual scoring the Agency 

performs. 

Fourth. A new scoring criterion was 

added that allows State Directors and 

the Administrator to award up to 10 

priority points if the application is for 

an under-represented technology, is for 

flexible fuel pumps, or would help 

achieve geographic diversity. 

Insurance Requirements (§ 4280.118) 

No changes were made to this set of 

provisions. 

Construction Planning and Performing 

Development (§ 4280.119) 

One change was made to this set of 

provisions in § 4280.119(f)(3) where the 

Agency revised the text associated with 

an outdated American Institute of 

Architects form (i.e., Form A191). 

RES and EEI Grantee Requirements 

(§ 4280.120) 

Three primary changes were made to 

this section as described below. 

First. The requirement that grants 

must also abide by ‘‘any other applicable 

Federal statutes or regulations’’ was 

added. 

Second. A statement that the failure to 

follow the requirements contained in 

the grant agreement, the subpart, and 

other applicable Federal statutes and 

regulations may result in termination of 

the grant and adoption of other available 

remedies was added. 

Third. The requirement for the 

applicant to provide, where applicable, 

a copy of the executed power purchase 

agreement was added. 

Servicing Grants (§ 4280.121) 

The two changes to this section are: 

• Adding reference to the 

Departmental Regulations when 

servicing RES and EEI grants; and 

• Adding provisions for when a 

grantee seeks to change a contractor or 

vendor. 

3. Renewable Energy System and Energy 

Efficiency Improvement Guaranteed 

Loans 

Borrower and Project Eligibility 

(§§ 4280.122 and 4280.123) 

Changes made to these sections reflect 

the same changes made to applicant and 

project eligibility for RES and EEI 

grants, as discussed above. 

Guaranteed Loan Funding (§ 4280.124) 

Several changes were made to this 

section: 

• The maximum amount of the loan 

that will be made available to an eligible 

project was increased from 50 to 75 

percent of total eligible project costs; 

• Both the maximum amount of a 

guaranteed loan and the total amount of 

loans guaranteed by the Agency under 

this program to any one borrower were 

increased from $10 million to $25 

million; 

• A 60 percent guarantee was added 

for loans greater than $10 million; and 

• Revised the criteria associated with 

determining the amount of a loan 

awarded in the same manner as 

described earlier for RES and EEI grants. 

Application and Documentation 

(§ 4280.128) 

As was done for grant application and 

documentation, the requirement to 

include intergovernmental consultation 

comments was removed (such 

consultation is not required for this 

program). 

Evaluation of RES and EEI Guaranteed 

Loan Applications (§ 4280.129) 

As was done for RES and EEI grants, 

the requirements associated with 

ineligible applications and incomplete 

applications were relocated under the 

‘‘General’’ heading of the rule. A minor 

edit was made to paragraph (a) and 

cross-references were updated. No other 

changes were made to this section. 

Conditions Precedent to Issuance of 

Loan Note Guarantee (§ 4280.146) 

The one substantive change to this 

section was the addition of the 

requirement for the lender to provide, 

where applicable, a copy of the 

executed power purchase agreement. 

Laws That Contain Other Compliance 

Requirements (§ 4280.151) 

This section is now ‘‘Reserved,’’ and 

the provisions regarding laws that 


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contain other compliance requirements 

have been incorporated into a similar 

section in the General Provisions 

portion of the interim rule. 

Other Sections 

Other than minor edits and updating 

cross references where applicable, no 

changes were made to the following 

guaranteed loan sections: 

• Interest rates (§ 4280.125). 

• Terms of loan (§ 4280.126). 

• Guarantee/annual renewal fee 

percentage (§ 4280.127). 

• Eligible lenders (§ 4280.130). 

• Lender’s functions and 

responsibilities (§ 4280.131). 

• Access to records (§ 4280.132). 

• Conditions of guarantee 

(§ 4280.133). 

• Sale or assignment of guaranteed 

loan (§ 4280.134). 

• Participation (§ 4280.135). 

• Minimum retention (§ 4280.136). 

• Repurchase from holder 

(§ 4280.137). 

• Replacement of document 

(§ 4280.138). 

• Credit quality (§ 4280.139). 

• Financial statements (§ 4280.140). 

• Appraisals (§ 4280.141). 

• Personal and corporate guarantees 

(§ 4280.142). 

• Loan approval and obligation of 

funds (§ 4280.143). 

• Transfer of lenders (§ 4280.144). 

• Changes in borrower (§ 4280.145). 

• Issuance of the guarantee 

(§ 4280.147). 

• Refusal to execute Loan Note 

Guarantee (§ 4280.148). 

• Requirements after project 

construction (§ 4280.149). 

• Insurance requirements 

(§ 4280.150). 

• Servicing guaranteed loans 

(§ 4280.152). 

• Substitution of lender (§ 4280.153). 

• Default by borrower (§ 4280.154). 

• Protective advances (§ 4280.155). 

• Liquidation (§ 4280.156). 

• Determination of loss and payment 

(§ 4280.157). 

• Future recovery (§ 4280.158). 

• Bankruptcy (§ 4280.159). 

• Termination of guarantee 

(§ 4280.160). 

4. Combined Funding 

Other than updating cross-references, 

the only other change to this section 

was deleting the third-party, in-kind 

contribution prohibition as was done for 

RES and EEI grants. 

5. Renewable Energy System Feasibility 

Study Grants 

The provisions contained in the Fiscal 

Year 2010 notice for RES feasibility 

study grants that were specific to RES 

feasibility study grants are organized in 

the interim rule as shown in the 

following table. Other provisions in the 

Fiscal Year 2010 notice for RES 

feasibility study grants that are 

applicable to the other REAP programs 

are incorporated into the General 

provisions section of the interim rule. 

Section name Section 

number 

Applicant eligibility .................... 4280.170 

Project eligibility ........................ 4280.171 

Application eligibility provisions 4280.172 

Grant funding for feasibility 

studies ................................... 4280.173 

Feasibility study grant applications—content ....................... 4280.176 

Evaluation of feasibility study 

grant applications .................. 4280.177 

Scoring feasibility study grant 

applications ........................... 4280.178 

Selecting feasibility study grant 

applications for award ........... 4280.179 

Actions prior to grant closing .... 4280.180 

Awarding and administering 

feasibility study grants .......... 4280.181 

Servicing feasibility study 

grants .................................... 4280.182 

With a limited number of exceptions, 

the provisions found in the Fiscal Year 

2010 notice for RES feasibility study 

grants have been incorporated into the 

interim rule. These exceptions are 

presented below. 

Project eligibility (§ 4280.171). Three 

conforming changes were made to the 

requirements for project eligibility. 

First. The project for which the RES 

feasibility study is to be performed must 

be located in a State. This is a 

conforming change necessitated by 

removing the citizenship requirement 

(which was incorporated by reference in 

the Fiscal Year 2010 Notice). 

Second. The applicant must have a 

place of business in a State. This is also 

a conforming change necessitated by 

removing the citizenship requirement 

(which was incorporated by reference in 

the Fiscal Year 2010 notice). 

Third. A RES feasibility study may be 

performed for a proposed RES project 

for a facility that is located in a nonrural area if the applicant is an 

agricultural producer. If the agricultural 

producer’s facility is in a non-rural area, 

then the feasibility study can be for a 

renewable energy system on integral 

components of or directly related to the 

facility, such as vertically integrated 

operations, and are part of and colocated with the agriculture production 

operation. For example, if an 

agricultural producer grows vegetables 

in a greenhouse located in a non-rural 

area and sells those vegetables at a colocated retail operation, where both the 

greenhouse and the retail operation are 

owned by the applicant, the feasibility 

study may consider both the greenhouse 

and the retail operation. If the retail 

operation is not co-located with the 

greenhouse, in this example, the 

feasibility study could only consider the 

greenhouse and not the retail operation. 

Under the Fiscal Year 2010 notice, all 

projects were required to be in a rural 

area. 

Forms and certifications (§ 4280.176). 

Two additional forms are identified for 

submittal with the application—Forms 

SF–424A and SF–424B. These forms are 

applicable for non-construction projects. 

The certification that the renewable 

energy system is located in a rural area 

is limited to rural small businesses, 

because, under the interim rule, the 

rural area location requirement does not 

apply to projects from agricultural 

producers. 

Evaluation of feasibility study grant 

applications (§ 4280.177). The sentence 

referring to the Agency continuing to 

process an application if the application 

contains certification that the applicant 

has neither sought nor received any 

other Federal or State assistance for a 

RES feasibility study on the subject 

facility was not included in the interim 

rule, because there are other reasons 

why the Agency may not continue 

processing an application. 

Scoring feasibility study grant 

applications (§ 4280.178). Reference to 

‘‘Other Federal or State assistance for 

only the RES feasibility study would 

make the request ineligible’’ under the 

scoring criterion for commitment of 

funds was not included in the interim 

rule because it is incorrect. 

Awarding and administering 

feasibility study grants (§ 4280.181). The 

interim rule clarifies when which forms 

are to be submitted. 

Servicing (§ 4280.182). The sentence 

‘‘All non-confidential information 

resulting from the Grantee’s activities 

shall be made available to the general 

public on an equal basis’’ is not 

included in the interim rule because it 

is not appropriate. 

Intergovernmental review comments. 

This provision was not included in the 

interim rule because it is not applicable 

to this program. 

Exception Authority. The exception 

authority provision in the Fiscal Year 

2010 notice is replaced in the interim 

rule with a different exception authority 

provision that is a more recent provision 

and that is applicable across the entire 

subpart. 

Appeals. The appeals provision in the 

Fiscal Year 2010 notice is replaced in 

the interim rule with a different appeals 


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provision that is applicable across the 

entire subpart. 

6. Energy Audit and Renewable Energy 

Development Assistance Grants 

As was done for RES feasibility study 

grants, the provisions contained in the 

Fiscal Year 2010 notice for EA and 

REDA grants that are specific to EA and 

REDA grants are organized in the 

interim rule as shown in the following 

table. Other provisions in the Fiscal 

Year 2010 notice for EA and REDA 

grants that are applicable to the other 

REAP programs are incorporated into 

the General provisions section of the 

interim rule. 

Section name Section 

number 

Applicant eligibility .................... 4280.186 

Project eligibility ........................ 4280.187 

Grant funding for energy audit 

and renewable energy development assistance ................ 4280.188 

EA/REDA grant applications— 

content .................................. 4280.190 

Evaluation of energy audit and 

renewable energy development assistance grant applications ................................... 4280.191 

Scoring energy audit and renewable energy development 

assistance grant applications 4280.192 

Selecting energy audit and renewable energy development 

assistance grant applications 

for award ............................... 4280.193 

Actions prior to grant closing .... 4280.194 

Awarding and administering energy audit and renewable energy development assistance 

grants .................................... 4280.195 

Servicing energy audit and renewable energy development 

assistance grants .................. 4280.196 

With a limited number of exceptions, 

the provisions found in the Fiscal Year 

2010 notice for EA and REDA grants 

have been incorporated into the interim 

rule. These exceptions are presented 

below. 

Applicant eligibility (§ 4280.186). The 

citizenship requirement found in the 

Fiscal Year 2010 notice is not included 

in the interim rule. 

Project eligibility (§ 4280.187). In 

response to the removal of the 

citizenship requirement, the interim 

rule requires that the energy audit or 

renewable energy development 

assistance must be provided to a 

recipient in a State and the applicant 

must have a place of business in a State. 

Another change is that the rural area 

requirement in the interim rule is not 

applicable to agricultural producers (as 

it was in the Fiscal Year 2010 notice). 

Instead, a facility owned by an 

agricultural producer for which an 

energy audit is being conducted or that 

is receiving renewable energy 

development assistance may be located 

in either a rural area or non-rural area. 

If the agricultural producer’s facility is 

in a non-rural area, then the energy 

audit or renewable energy development 

assistance can be for a renewable energy 

system or energy efficiency 

improvement on integral components of 

or that are directly related to the facility, 

such as vertically integrated operations, 

and are part of and co-located with the 

agriculture production operation. 

Grant funding for energy audit and 

renewable energy development 

assistance (§ 4280.188). Under the 

provisions for eligible project costs, the 

interim rule does not include ‘‘pay for 

assistance to any private business 

enterprise which does not meet the 

requirements of paragraph III.A(2) of 

this Notice’’ because the referenced 

paragraph in the Fiscal Year 2010 notice 

refers to meeting the citizenship 

requirement, which has been not been 

included in the interim rule, thus 

making this provision not applicable to 

the interim rule. 

Application contents (§ 4280.190). 

The requirement to submit 

intergovernmental review comments 

was not included in the interim rule 

because intergovernmental review is not 

required for this program. In addition, 

the Agency removed the phrasing ‘‘(in 

addition to the required 25 percent 

contribution from the agricultural 

producer or rural small business for the 

cost of an energy audit)’’ from the title 

of the ‘‘leveraging and commitment of 

other sources of funding’’ scoring 

criterion because the Agency 

determined that it was confusing. 

Scoring energy audit and renewable 

energy development assistance grant 

applications (§ 4280.192). The interim 

rule replaces ‘‘existing rural service 

area’’ with ‘‘existing service area.’’ 

Selecting energy audit and renewable 

energy development grant assistance 

applications for award (§ 4280.193). The 

interim rule does not include the Fiscal 

Year 2010 provision concerning 

objections raised by State or local 

governments during the 

intergovernmental review process, 

because the intergovernmental review 

process is not applicable to this 

program. Thus, this provision is not 

appropriate. 

Awarding and administering energy 

audit and renewable energy 

development assistance grants 

(§ 4280.195). The text concerning forms 

was revised to clarify which forms are 

to be submitted to the Agency and to 

remove reference to the grant being 

considered closed on the obligation 

date, because that is incorrect and is not 

needed in the rule. 

Servicing (§ 4280.196). In the 

requirements for performance reports, 

the phrase ‘‘final semiannual 

performance report’’ was revised to 

‘‘final performance report’’ for clarity. In 

addition, the Agency recast the 

paragraph on the use of remaining funds 

to use the same phrasing as found in the 

deobligation provisions for RES 

feasibility study grants. 

Intergovernmental review comments. 

This provision was not included in the 

interim rule because it is not applicable 

to this program. 

Exception Authority. The exception 

authority provision in the Fiscal Year 

2010 notice is replaced in the interim 

rule with a different exception authority 

provision that is a more recent provision 

and that is applicable across the entire 

subpart. 

Appeals. The appeals provision in the 

Fiscal Year 2010 notice is replaced in 

the interim rule with a different appeals 

provision that is applicable across the 

entire subpart. 

III. Request for Comments 

The Agency is interested in receiving 

comments on all aspects of the interim 

rule. An area in which the Agency is 

seeking specific comments is identified 

below. All comments should be 

submitted as indicated in the ADDRESSES

section of this preamble. 

Demonstrated financial need. The 

Agency is seeking comment on whether 

to require demonstrated financial need 

for applicants seeking grants and, if so, 

what should the requirements be for 

such demonstration (i.e., how would an 

applicant demonstrate financial need). 

Please be specific and provide rationale 

to support your position. 

List of Subjects in 7 CFR Part 4280 

Loan programs—Business and 

industry, Economic development, 

Energy, Energy audits, Energy efficiency 

improvements, Feasibility studies, Grant 

programs, Guaranteed loan programs, 

Renewable energy development 

assistance, Renewable energy systems, 

and Rural areas. 

For the reasons set forth in the 

preamble, Chapter XLII of title 7 of the 

Code of Federal Regulations is amended 

as follows: 

CHAPTER XLII—RURAL BUSINESS– 

COOPERATIVE SERVICE AND RURAL 

UTILITIES SERVICE, DEPARTMENT OF 

AGRICULTURE 

PART 4280—LOANS AND GRANTS 

■ 1. The authority citation for part 4280 

is revised to read as follows: 


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Authority: 5 U.S.C. 301; 7 U.S.C. 940c; 7 

U.S.C. 8107. 

■ 2. Subpart B of part 4280 is revised to 

read as follows: 

Subpart B—Rural Energy for America 

Program General 

Sec. 

4280.101 Purpose. 

4280.102 Organization of subpart. 

4280.103 Definitions. 

4280.104 Exception authority. 

4280.105 Appeals. 

4280.106 Conflict of interest. 

4280.107 USDA Departmental Regulations. 

4280.108 Laws that contain other 

compliance requirements. 

4280.109 Ineligible applicants, borrowers, 

and owners. 

4280.110 General applicant and application 

provisions. 

4280.111 Notifications. 

Renewable Energy System and Energy 

Efficiency Improvement Grants 

4280.112 Applicant eligibility. 

4280.113 Project eligibility. 

4280.114 Qualification for simplified 

applications. 

4280.115 RES and EEI grant funding. 

4280.116 Application and documentation. 

4280.117 Evaluation of RES and EEI grant 

applications. 

4280.118 Insurance requirements. 

4280.119 Construction planning and 

performing development. 

4280.120 RES and EEI grantee 

requirements. 

4280.121 Servicing grants. 

Renewable Energy System and Energy 

Efficiency Improvement Guaranteed Loans 

4280.122 Borrower eligibility. 

4280.123 Project eligibility. 

4280.124 Guaranteed loan funding. 

4280.125 Interest rates. 

4280.126 Terms of loan. 

4280.127 Guarantee/annual renewal fee 

percentages. 

4280.128 Application and documentation. 

4280.129 Evaluation of RES and EEI 

guaranteed loan applications. 

4280.130 Eligible lenders. 

4280.131 Lender’s functions and 

responsibilities. 

4280.132 Access to records. 

4280.133 Conditions of guarantee. 

4280.134 Sale or assignment of guaranteed 

loan. 

4280.135 Participation. 

4280.136 Minimum retention. 

4280.137 Repurchase from holder. 

4280.138 Replacement of document. 

4280.139 Credit quality. 

4280.140 Financial statements. 

4280.141 Appraisals. 

4280.142 Personal and corporate 

guarantees. 

4280.143 Loan approval and obligation of 

funds. 

4280.144 Transfer of lenders. 

4280.145 Changes in borrower. 

4280.146 Conditions precedent to issuance 

of Loan Note Guarantee. 

4280.147 Issuance of the guarantee. 

4280.148 Refusal to execute Loan Note 

Guarantee. 

4280.149 Requirements after project 

construction. 

4280.150 Insurance requirements. 

4280.151 [Reserved] 

4280.152 Servicing guaranteed loans. 

4280.153 Substitution of lender. 

4280.154 Default by borrower. 

4280.155 Protective advances. 

4280.156 Liquidation. 

4280.157 Determination of loss and 

payment. 

4280.158 Future recovery. 

4280.159 Bankruptcy. 

4280.160 Termination of guarantee. 

4280.161–4280.164 [Reserved] 

Combined Funding for Renewable Energy 

Systems and Energy Efficiency 

Improvements 

4280.165 Combined funding for renewable 

energy systems and energy efficiency 

improvements. 

4280.166–4280.169 [Reserved] 

Renewable Energy System Feasibility Study 

Grants 

4280.170 Applicant eligibility. 

4280.171 Project eligibility. 

4280.172 Application eligibility provisions. 

4280.173 Grant funding for feasibility 

studies. 

4280.174–4280.175 [Reserved] 

4280.176 Feasibility study grant 

applications—Content. 

4280.177 Evaluation of feasibility study 

grant applications. 

4280.178 Scoring feasibility study grant 

applications. 

4280.179 Selecting feasibility study grant 

applications for award. 

4280.180 Actions prior to grant closing. 

4280.181 Awarding and administering 

feasibility study grants. 

4280.182 Servicing feasibility study grants. 

4280.183–4280.185 [Reserved] 

Energy Audit and Renewable Energy 

Development Assistance Grants 

4280.186 Applicant eligibility. 

4280.187 Project eligibility. 

4280.188 Grant funding for energy audit 

and renewable energy development 

assistance. 

4280.189 [Reserved] 

4280.190 EA/REDA grant applications— 

Content. 

4280.191 Evaluation of energy audit and 

renewable energy development 

assistance grant applications. 

4280.192 Scoring energy audit and 

renewable energy development 

assistance grant applications. 

4280.193 Selecting energy audit and 

renewable energy development 

assistance grant applications for award. 

4280.194 Actions prior to grant closing. 

4280.195 Awarding and administering 

energy audit and renewable energy 

development assistance grants. 

4280.196 Servicing energy audit and 

renewable energy development 

assistance grants. 

4280.197–4280.199 [Reserved] 

4280.200 OMB control numbers. 

Appendix A to Subpart B of Part 4280— 

Technical Reports for Projects with Total 

Eligible Project Costs of $200,000 or Less 

Appendix B to Subpart B of Part 4280— 

Technical Reports for Projects with Total 

Eligible Project Costs of Greater than 

$200,000 

Appendix C to Subpart B of Part 4280— 

Technical Report for Hydropower 

Projects 

Appendix D to Subpart B of Part 4280— 

Technical Report for Flexible Fuel 

Pumps 

Appendix E to Subpart B of Part 4280— 

Feasibility Study Content 

Subpart B—Rural Energy for America 

Program 

General 

§ 4280.101 Purpose. 

This subpart contains the procedures 

and requirements for providing the 

following financial assistance under the 

Rural Energy for America Program: 

(a) Grants or guaranteed loans, or a 

combination grant and guaranteed loan, 

for the purpose of purchasing and 

installing renewable energy systems and 

energy efficiency improvements in rural 

areas; 

(b) Grants for conducting renewable 

energy system feasibility studies; and 

(c) Grants to assist agricultural 

producers and rural small businesses by 

conducting energy audits and providing 

recommendations and information on 

renewable energy development 

assistance and improving energy 

efficiency. 

§ 4280.102 Organization of subpart. 

(a) Sections 4280.103 through 

4280.111 discuss definitions, exception 

authority, appeals, conflict of interest, 

USDA Departmental regulations, other 

applicable laws, ineligible applicants, 

borrowers, and owners, general 

applicant and application provisions, 

and notifications, which are applicable 

to all of the funding programs under this 

subpart. 

(b) Sections 4280.112 through 

4280.121 discuss the requirements 

specific to renewable energy system and 

energy efficiency improvement grants. 

Sections 4280.112 and 4280.113 

discuss, respectively, applicant and 

project eligibility. Section 4280.114 

discusses the circumstances under 

which an applicant may qualify to 

submit a simplified application for a 

grant. Sections 4280.115 through 

4280.118 address grant funding, grant 

application content and required 

documentation, the evaluation process, 

and insurance requirements. Sections 

4280.119 through 4280.121 address 

project planning, development, and 

completion, grantee requirements, and 

grant servicing. 

(c) Sections 4280.122 through 

4280.160 discuss the requirements 


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specific to renewable energy system and 

energy efficiency improvement 

guaranteed loans. Sections 4280.122 

through 4280.127 discuss eligibility and 

requirements for making and processing 

loans guaranteed by the Agency. Section 

4280.128 addresses the application and 

documentation requirements, separating 

the requirements for loans over 

$600,000 and for loans of $600,000 or 

less. Section 4280.129 addresses the 

evaluation of guaranteed loan 

applications. Sections 4280.130 through 

4280.160 provide guaranteed loan 

origination and servicing requirements. 

These requirements apply to lenders, 

holders, and other parties involved in 

making, guaranteeing, holding, 

servicing, or liquidating such loans. 

(d) Section 4280.165 presents the 

process by which the Agency will make 

combined loan guarantee and grant 

funding available for renewable energy 

system and energy efficiency 

improvement projects. 

(e) Sections 4280.170 through 

4280.182 presents the process by which 

the Agency will make renewable energy 

system feasibility study grant funding 

available. These sections cover 

applicant, project, and application 

eligibility; grant funding; application 

content, evaluation, scoring, and 

selection for award; and grant award, 

administration, and servicing. 

(f) Sections 4280.186 through 

4280.196 present the process by which 

the Agency will make energy audit and 

renewable energy development 

assistance grant funding available. 

These sections cover applicant and 

project eligibility; grant funding; 

application content, evaluation, scoring, 

and selection for award; and grant 

award, administration, and servicing. 

(g) Appendices A through D of this 

subpart cover technical report 

requirements. Appendix A applies to 

projects with total eligible project costs 

of $200,000 or less; Appendix B applies 

projects with total eligible project costs 

greater than $200,000; Appendix C 

applies to hydropower projects; and 

Appendix D applies to flexible fuel 

pumps. Appendix E identifies the 

contents of the feasibility study that will 

be required to be submitted to the 

Agency if funding is provided under 

§§ 4280.170 through 4280.182. 

§ 4280.103 Definitions. 

Terms used in this subpart are 

defined in either § 4279.2 of this chapter 

or in this section. If a term is defined in 

both § 4279.2 and this section, it will 

have, for purposes of this subpart only, 

the meaning given in this section. 

Administrator. The Administrator of 

the Rural Business-Cooperative Service 

within the Rural Development Mission 

Area of the U.S. Department of 

Agriculture. 

Agency. The Rural BusinessCooperative Service or successor 

Agency assigned by the Secretary of 

Agriculture to administer the Rural 

Energy for America Program. References 

to the National Office, Finance Office, 

State Office, or other Agency offices or 

officials should be read as prefaced by 

‘‘Agency’’ or ‘‘Rural Development’’ as 

applicable. 

Agricultural producer. An individual 

or entity directly engaged in the 

production of agricultural products, 

including crops (including farming); 

livestock (including ranching); forestry 

products; hydroponics; nursery stock; or 

aquaculture, whereby 50 percent or 

greater of their gross income is derived 

from the operations. 

Anaerobic digester project. A 

renewable energy system that uses 

animal waste and other organic 

substrates, via anaerobic digestion, to 

produce biomethane that is used to 

produce thermal or electrical energy or 

converted to a compressed gaseous or 

liquid state. 

Annual receipts. The total income or 

gross income (sole proprietorship) plus 

cost of goods sold. 

Applicant. The agricultural producer 

or rural small business that is seeking a 

grant, guaranteed loan, or a combination 

of a grant and loan, under this subpart. 

Assignment Guarantee Agreement 

(Form RD 4279–6) or successor form. A 

signed agreement between the Agency, 

the lender, and the holder containing 

the terms and conditions of an 

assignment of a guaranteed portion of a 

loan. 

Bioenergy project. A renewable energy 

system that produces fuel, thermal 

energy, or electric power from a biomass 

source, other than an anaerobic digester 

project. 

Biogas. Renewable biomass converted 

to gaseous fuels. 

Blended liquid transportation fuel. A 

fuel used for transportation that: 

(1) Is composed of one or more fuel 

types, at least one of which must meet 

the Renewable Fuel Standard, and 

(2) Results in a blended fuel that 

exceeds the highest requirement for the 

percentage volume for a renewable fuel. 

Borrower. Any party or parties liable 

for a guaranteed loan made under this 

subpart except guarantors. 

Capacity. The maximum load that an 

apparatus or heating unit is able to meet 

on a sustained basis as rated by the 

manufacturer. 

Commercially available. A system 

that has a proven operating history 

specific to the proposed application. 

Such a system is based on established 

design, and installation procedures and 

practices. Professional service 

providers, trades, large construction 

equipment providers, and labor are 

familiar with installation procedures 

and practices. Proprietary and balance 

of system equipment and spare parts are 

readily available. Service is readily 

available to properly maintain and 

operate the system. An established 

warranty exists for parts, labor, and 

performance. 

Conditional Commitment (Form RD 

4279–3) or successor form. Agency 

notice to the lender that the loan 

guarantee is approved subject to the 

completion of all conditions and 

requirements set forth by the Agency. 

Default. The condition where a 

borrower or grantee is not in compliance 

with one or more loan covenants or 

grant conditions as stipulated in the 

Letter of Conditions, Conditional 

Commitment, or loan or grant 

agreement. 

Departmental regulations. The 

regulations of the Department of 

Agriculture’s Office of Chief Financial 

Officer (or successor office) as codified 

in 2 CFR part 417 and 7 CFR parts 3000 

through 3099, including, but not 

necessarily limited to, 7 CFR parts 3015 

through 3019, 7 CFR part 3021, and 7 

CFR part 3052. 

Design/build method. A method of 

project development whereby all design, 

engineering, procurement, construction, 

and other related project activities are 

performed under a single contract. The 

prime contractor is solely responsible 

and accountable for successful delivery 

of the project to the owner. 

Eligible project costs. The total project 

costs that are eligible to be paid with 

program funds. 

Energy assessment. A report 

conducted by an experienced energy 

assessor, certified energy manager or 

professional engineer assessing energy 

cost and efficiency by analyzing energy 

bills and briefly surveying the target 

building, machinery, or system. The 

report identifies and provides a savings 

and cost analysis of low-cost/no-cost 

measures. The report will estimate the 

overall costs and expected energy 

savings from these improvements, and 

dollars saved per year. The report will 

estimate weighted-average payback 

period in years. 

Energy assessor. An individual or 

entity that conducts an energy 

assessment. 

Energy audit. An audit conducted by 

a certified energy manager or 

professional engineer that focuses on 

potential capital-intensive projects and 

involves detailed gathering of field data 


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and engineering analysis. The audit will 

provide detailed project costs and 

savings information with a high level of 

confidence sufficient for major capital 

investment decisions. 

Energy auditor. An individual or 

entity that conducts an energy audit. 

Energy efficiency improvement (EEI). 

Improvements to a facility, building, or 

process that reduce energy 

consumption, or reduce energy 

consumed per square foot. 

Existing business. A business that has 

completed at least one full business 

cycle. 

Fair market value of equity in real 

property. Fair market value of real 

property, as established by an appraisal, 

less the outstanding balance of any 

mortgages, liens, or encumbrances. 

Feasibility study. An analysis of the 

economic, market, technical, financial, 

and management feasibility of a 

proposed project or business. 

Financial feasibility. The ability of a 

project or business to achieve the 

income, credit, and cash flows to 

financially sustain a project over the 

long term. The concept of financial 

feasibility includes assessments of the 

cost-accounting system, the availability 

of short-term credit for seasonal 

businesses, and the adequacy of raw 

materials and supplies. 

Flexible fuel pump. A retail pump 

that combines and dispenses a blended 

liquid transportation fuel or dispenses a 

blended liquid transportation fuel. If a 

flexible fuel pump dispenses more than 

one blend of liquid transportation fuel, 

at least one of the blends must meet the 

definition of blended liquid 

transportation fuel found in this section. 

Geothermal, direct use. A system that 

uses thermal energy directly from a 

geothermal source. 

Geothermal, electric generation. A 

system that uses geothermal energy to 

produce high pressure steam for electric 

power production. 

Holder. A person or entity, other than 

the lender, who owns all or part of the 

guaranteed portion of the loan with no 

servicing responsibilities. When the 

single note option is used and the 

lender assigns a part of the guaranteed 

note to an assignee, the assignee 

becomes a holder only when the Agency 

receives notice and the transaction is 

completed through the use of Form RD 

4279–6. 

Hydroelectric energy. Energy created 

from various hydroelectric sources 

including, but not limited to, diverted 

run-of-river water, in-stream run-of-river 

water, and in-conduit water. 

Hydrogen project. A renewable energy 

system that produces hydrogen or, a 

renewable energy system that uses 

mechanical or electric power or thermal 

energy from a renewable resource using 

hydrogen as an energy transport 

medium. 

Hydropower. Energy created by 

hydroelectric or ocean energy. 

Institution of higher education. As 

defined in 20 U.S.C. 1002(a). 

Instrumentality. An organization 

recognized, established, and controlled 

by a State, tribal, or local government, 

for a public purpose or to carry out 

special purposes. 

Interconnection agreement. The terms 

and conditions governing the 

interconnection and parallel operation 

of the grantee’s or borrower’s electric 

generation equipment and the utility’s 

electric power system. 

Interim financing. A temporary or 

short-term loan made with the clear 

intent that it will be repaid through 

another loan, cash, or other financing 

mechanism. Interim financing is 

frequently used to pay construction and 

other costs associated with a planned 

project, with permanent financing to be 

obtained after project completion. 

Large solar, electric. Large solar 

electric systems are those for which the 

rated power of the system is larger than 

10 kilowatts (kW). Large solar electric 

systems are either stand-alone (off grid) 

or interconnected to the grid (on grid). 

Large solar, thermal. Large solar 

thermal systems are those for which the 

rated storage volume of the system is 

greater than 240 gallons or that have a 

collector area of more than 1,000 square 

feet. 

Large wind system. A wind energy 

project for which the rated power of the 

individual wind turbine(s) is larger than 

100kW. 

Lender. The organization making, 

servicing, and collecting the loan that is 

guaranteed under the provisions of this 

subpart. 

Lender’s Agreement (Form RD 4279– 

4) or successor form. Agreement 

between the Agency and the lender 

setting forth the lender’s loan 

responsibilities. 

Loan Note Guarantee (Form RD 4279– 

5) or successor form. Instrument issued 

and executed by the Agency containing 

the terms and conditions of the 

guarantee. 

Matching funds. The funds needed to 

pay for the portion of the eligible project 

costs not funded or guaranteed by the 

Agency through a grant or guaranteed 

loan under this program. Unless 

authorized by statute, other Federal 

grant funds cannot be used to meet a 

matching funds requirement. 

Necessary capital improvement. A 

capital improvement required to keep 

an existing system in compliance with 

regulations or to maintain technical or 

operational feasibility. 

Ocean energy. Energy created by use 

of various types of moving water 

including, but not limited to, tidal, 

wave, current, and thermal changes. 

Participation. The sale of interest in a 

loan by the lender wherein the lender 

retains the note, collateral securing the 

note, and all responsibility for loan 

servicing and liquidation. 

Passive investor. An equity investor 

that does not actively participate in 

management and operation decisions of 

the business entity as evidenced by a 

contractual arrangement. 

Post-application. The period of time 

after the Agency has received a 

complete application, which contains 

all parts necessary for the Agency to 

determine applicant and project 

eligibility, to score the application, and 

to conduct the technical evaluation. 

Power purchase agreement. The terms 

and conditions governing the sale and 

transportation of electricity produced by 

the grantee or borrower to another party. 

Pre-commercial technology. 

Technology that has emerged through 

the research and development process 

and has technical and economic 

potential for commercial application, 

but is not yet commercially available. 

Promissory Note. Evidence of debt. A 

note that a borrower signs promising to 

pay a specific amount of money at a 

stated time or on demand. 

Public power entity. Is defined using 

the definition of state utility as defined 

in section 217(A)(4) of the Federal 

Power Act (16 U.S.C. 824q(a)(4)). As of 

this writing, the definition ‘‘means a 

State or any political subdivision of a 

State, or any agency, authority, or 

instrumentality of any one or more of 

the foregoing, or a corporation that is 

wholly owned, directly or indirectly, by 

any one or more of the foregoing, 

competent to carry on the business of 

developing, transmitting, utilizing, or 

distributing power.’’ 

Qualified consultant. An entity 

possessing the knowledge, expertise, 

and experience to perform a specific 

task. 

Qualified party. An independent third 

party entity possessing the knowledge, 

expertise, and experience to perform in 

an efficient, effective, and authoritative 

manner the specific task required. 

Rated power. The maximum amount 

of energy that can be created at any 

given time. 

Renewable biomass. 

(1) Materials, pre-commercial 

thinnings, or invasive species from 

National Forest System land and public 

lands (as defined in section 103 of the 


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Federal Land Policy and Management 

Act of 1976 (43 U.S.C. 1702)) that: 

(i) Are byproducts of preventive 

treatments that are removed to reduce 

hazardous fuels; to reduce or contain 

disease or insect infestation; or to 

restore ecosystem health; 

(ii) Would not otherwise be used for 

higher-value products; and 

(iii) Are harvested in accordance with 

applicable law and land management 

plans and the requirements for oldgrowth maintenance, restoration, and 

management direction of paragraphs 

(e)(2), (e)(3), and (e)(4) and large-tree 

retention of subsection (f) of section 102 

of the Healthy Forests Restoration Act of 

2003 (16 U.S.C. 6512); or 

(2) Any organic matter that is 

available on a renewable or recurring 

basis from non-Federal land or land 

belonging to an Indian or Indian tribe 

that is held in trust by the United States 

or subject to a restriction against 

alienation imposed by the United States, 

including: 

(i) Renewable plant material, 

including feed grains; other agricultural 

commodities; other plants and trees; 

and algae; and 

(ii) Waste material, including crop 

residue; other vegetative waste material 

(including wood waste and wood 

residues); animal waste and byproducts 

(including fats, oils, greases, and 

manure); and food waste and yard 

waste. 

Renewable energy. Energy derived 

from: 

(1) A wind, solar, renewable biomass, 

ocean (including tidal, wave, current, 

and thermal), geothermal or 

hydroelectric source; or 

(2) Hydrogen derived from renewable 

biomass or water using wind, solar, 

ocean (including tidal, wave, current, 

and thermal), geothermal or 

hydroelectric energy sources. 

Renewable Energy Development 

Assistance. Assistance provided by 

eligible grantees to agricultural 

producers and rural small businesses to 

become more energy efficient and to use 

renewable energy technologies and 

resources. The renewable energy 

development assistance may consist of 

renewable energy site assessment and/or 

renewable energy technical assistance. 

Renewable energy site assessment. A 

report provided to an agricultural 

producer or rural small business 

providing recommendations and 

information regarding the use of 

renewable energy technologies in its 

operation. The report shall be prepared 

by a qualified consultant and evaluate a 

specific site or geographic area for 

potential use of one or more renewable 

energy technologies. Typically, the 

report will evaluate a potential 

renewable energy project with an 

estimated total cost of construction of 

less than $200,000. The evaluation shall 

be based on existing data, which may 

include data regarding existing and/or 

proposed structures, commercially 

available technologies, feed-stocks, and 

other renewable energy resources. The 

report will consider factors such as the 

site and the potential uses of renewable 

energy technology at the site. The report 

will not include information about any 

residential dwelling(s). 

Renewable energy system (RES). A 

system that produces or produces and 

delivers usable energy from a renewable 

energy source, or is a flexible fuel 

pump. 

Renewable energy technical 

assistance. Assistance provided to 

agricultural producers and rural small 

businesses on how to use renewable 

energy technologies and resources in 

their operations. 

Rural or rural area. Any area of a 

State not in a city or town that has a 

population of more than 50,000 

inhabitants, according to the latest 

decennial census of the United States, 

or in the urbanized area contiguous and 

adjacent to a city or town that has a 

population of more than 50,000 

inhabitants, and any area that has been 

determined to be ‘‘rural in character’’ by 

the Under Secretary for Rural 

Development, or as otherwise identified 

in this definition. 

(1) An area that is attached to the 

urbanized area of a city or town with 

more than 50,000 inhabitants by a 

contiguous area of urbanized census 

blocks that is not more than 2 census 

blocks wide. Applicants from such an 

area should work with their Rural 

Development State Office to request a 

determination of whether their project is 

located in a rural area under this 

provision. 

(2) For the purposes of this definition, 

cities and towns are incorporated 

population centers with definite 

boundaries, local self government, and 

legal powers set forth in a charter 

granted by the State. 

(3) For the Commonwealth of Puerto 

Rico, the island is considered rural and 

eligible for Business Programs 

assistance, except for the San Juan 

Census Designated Place (CDP) and any 

other CDP with greater than 50,000 

inhabitants. CDPs with greater than 

50,000 inhabitants, other than the San 

Juan CDP, may be determined to be 

eligible if they are ‘‘not urban in 

character.’’ 

(4) For the State of Hawaii, all areas 

within the State are considered rural 

and eligible for Business Programs 

assistance, except for the Honolulu CDP 

within the County of Honolulu. 

(5) For the purpose of defining a rural 

area in the Republic of Palau, the 

Federated States of Micronesia, and the 

Republic of the Marshall Islands, the 

Agency shall determine what 

constitutes rural and rural area based on 

available population data. 

(6) The determination that an area is 

‘‘rural in character’’ will be made by the 

Under Secretary of Rural Development. 

The process to request a determination 

under this provision is outlined in 

paragraph (6)(ii) of this definition. 

(i) The determination that an area is 

‘‘rural in character’’ under this definition 

will apply to areas that are within: 

(A) An urbanized area that has two 

points on its boundary that are at least 

40 miles apart, which is not contiguous 

or adjacent to a city or town that has a 

population of greater than 150,000 

inhabitants or the urbanized area of 

such a city or town; or 

(B) An urbanized area contiguous and 

adjacent to a city or town of greater than 

50,000 inhabitants that is within onequarter mile of a rural area. 

(ii) Units of local government may 

petition the Under Secretary of Rural 

Development for a ‘‘rural in character’’ 

designation by submitting a petition to 

both the appropriate Rural Development 

State Director and the Administrator on 

behalf of the Under Secretary. The 

petition shall document how the area 

meets the requirements of paragraph 

(6)(i)(A) or (B) of this definition and 

discuss why the petitioner believes the 

area is ‘‘rural in character,’’ including, 

but not limited to, the area’s population 

density, demographics, and topography 

and how the local economy is tied to a 

rural economic base. Upon receiving a 

petition, the Under Secretary will 

consult with the applicable Governor or 

leader in a similar position and request 

comments to be submitted within 5 

business days, unless such comments 

were submitted with the petition. The 

Under Secretary will release to the 

public a notice of a petition filed by a 

unit of local government not later than 

30 days after receipt of the petition by 

way of publication in a local newspaper 

and posting on the Agency’s Web site, 

and the Under Secretary will make a 

determination not less than 15 days, but 

no more than 60 days, after the release 

of the notice. Upon a negative 

determination, the Under Secretary will 

provide to the petitioner an opportunity 

to appeal a determination to the Under 

Secretary, and the petitioner will have 

10 business days to appeal the 

determination and provide further 

information for consideration. 


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Rural Energy for America Program 

Grant Agreement (Form RD 4280–2) or 

successor form. An agreement between 

the Agency and the grantee setting forth 

the provisions under which the grant 

will be administered. 

Simple payback. The estimated 

simple payback of a project funded 

under this subpart as calculated using 

paragraph (1), (2), or (3), as applicable, 

of this definition. 

(1) For energy generation projects, 

simple payback is calculated as follows: 

(i) Simple payback = (Total Project 

Costs (including REAP Grant))/(Average 

Net Income + Interest Expense + 

Depreciation Expense (for the project)) 

(ii) Average net income: 

(A) Is based on all energy related 

revenue streams which include 

monetary benefits from Production Tax 

Credit (PTC), Renewable Energy Credit, 

Carbon Credits, revenue from 

byproducts produced by the energy 

system, fair market value of byproducts 

produced by and used in the project or 

related enterprises, and other incentives 

that can be annualized. 

(B) Is based on income remaining after 

all project obligations are paid 

(operating and maintenance), except 

interest and depreciation as noted 

above. 

(C) Is based on the Agency’s review 

and acceptance of the project’s typical 

year income (which is after the project 

is operating and stabilized) projections 

at the time of application submittal. 

(D) Does not allow Investment Tax 

Credits, State tax incentives, or other 

one-time construction and investment 

related benefits that cannot be 

annualized to be included as income or 

reduce total eligible project costs. 

(2) For energy replacement and energy 

efficiency improvement projects, simple 

payback is calculated as follows: 

(i) Simple payback = (Total Project 

Costs (including REAP Grant))/Dollar 

Value of Energy Generated or Saved (as 

applicable) 

(ii) Dollar value of energy generated or 

saved incorporates the following: 

(A) All energy related revenue 

streams, which include monetary 

benefits from PTC, Renewable Energy 

Credit, Carbon Credits, revenue from 

byproducts produced by the energy 

system, and other monetary incentives 

that can be annualized. 

(B) Energy saved or replaced shall be 

calculated on the quantity of energy 

saved or replaced (e.g., BTU) and 

converted to a monetary value using a 

constant value or price of energy as 

determined under paragraph (2)(ii)(B)(3) 

of this definition. 

(1) The actual total quantity of energy 

used (BTU) in the original building and 

equipment in the 12 months prior to the 

RES or EEI project application. 

(2) Projected energy usage after the 

RES or EEI project shall be the projected 

total quantity of energy used (BTU) on 

an annual basis for the same size or 

capacity as the original building or 

equipment. For energy efficiency 

improvement to equipment, if the new 

piece of equipment has a different 

capacity than the piece of equipment 

being replaced, the projected total 

quantity of energy used for the new 

piece of equipment shall be adjusted 

based on the ratio of the capacity of the 

replaced piece of equipment to the 

capacity of the new piece of equipment. 

(3) Value or price of energy shall be 

the actual average price paid over the 

last year and used as a constant for all 

calculations of the value of energy. 

(C) Does not allow energy efficiency 

improvements to monetize benefits 

other than the dollar amount of the 

energy savings the agricultural producer 

or rural small business realizes as a 

result of the improvement. 

(D) Does not allow Investment Tax 

Credits, State tax incentives, or other 

one-time construction and investment 

related benefits that cannot be 

annualized to be included as income or 

reduce total project costs. 

(3) For flexible fuel pumps, the 

calculation for simple payback is as 

follows: 

(i) Simple payback = (Total Project 

Costs (including REAP Grant))/(Increase 

in Net Income + Interest Expense + 

Depreciation Expense (for the project)) 

(ii) Increase in income: 

(A) Is based on all flexible fuel pump 

related net income (the projected 

increase in annual net income resulting 

by the installation of the project), which 

includes monetary benefits from Tax 

Credits and other credits or incentives 

that can be annualized. 

(B) Is based on income remaining after 

all project obligations are paid 

(operating and maintenance), except 

interest and depreciation as noted 

above. 

(C) Is based on the Agency’s review 

and acceptance of the project’s typical 

year income (which is after the project 

is operating and stabilized) projections 

at the time of application submittal. 

(D) Does not allow State tax 

incentives or other one-time 

construction and investment related 

benefits that cannot be annualized to be 

included as income or reduce total 

eligible project costs. 

Simplified application. An 

application that conforms to the criteria 

and procedures specified in § 4280.114. 

Small business. An entity is 

considered a small business in 

accordance with the Small Business 

Administration’s (SBA) small business 

size standards by the North American 

Industry Classification System (NAICS) 

found in 13 CFR part 121. A private 

entity, including a sole proprietorship, 

partnership, corporation, cooperative 

(including a cooperative qualified under 

section 501(c)(12) of the Internal 

Revenue Code), and an electric utility, 

including a Tribal or governmental 

electric utility, that provides service to 

rural consumers on a cost-of-service 

basis without support from public funds 

or subsidy from the Government 

authority establishing the district, 

provided such utilities meet SBA’s 

definition of small business. These 

entities must operate independent of 

direct Government control except for 

Tribal business entities formed as 

Section 17 Corporations as determined 

by the Secretary of the Interior or other 

Tribal business entities that have similar 

structures and relationships with their 

Tribal governments as determined by 

the Agency. The Agency shall determine 

the small business status of such a 

Tribal entity without regard to the 

resources of the Tribal government. 

With the exception of the entities 

described above, all other non-profit 

entities are excluded. 

Small hydropower. A hydropower 

project for which the rated power of the 

system is 30 megawatts or less. 

Small solar, electric. Small solar 

electric projects are those for which the 

rated power of the system is 10kW or 

smaller. Small solar electric projects are 

either stand-alone (off grid) or 

interconnected to the grid at less than 

600 volts (on grid). 

Small solar, thermal. Small solar 

thermal projects are those for which the 

rated storage volume of the system is 

240 gallons or smaller or that have a 

collector area of 1,000 square feet or 

less. 

Small wind system. Wind energy 

system for which the rated power of the 

wind turbine is 100kW or smaller and 

with a generator hub height of 120 feet 

or less. A small wind system is either 

stand-alone or connected to the local 

electrical system at less than 600 volts. 

Spreadsheet. A table containing data 

from a series of financial statements of 

a business over a period of time. 

Financial statement analysis normally 

contains spreadsheets for balance sheets 

and income statements and may include 

cash flow statement data and commonly 

used ratios. The spreadsheets enable a 

reviewer to easily scan the data, spot 

trends, and make comparisons. 

State. Any of the 50 states of the 

United States, the Commonwealth of 

Puerto Rico, the District of Columbia, 


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the U.S. Virgin Islands, Guam, 

American Samoa, the Commonwealth of 

the Northern Mariana Islands, the 

Republic of Palau, the Federated States 

of Micronesia, and the Republic of the 

Marshall Islands. 

Total project costs. The sum of all 

costs associated with a completed 

project. 

Used equipment. Any equipment that 

has been used in any previous 

application and is provided in an ‘‘as is’’ 

condition. 

Very small business. A business with 

fewer than 15 employees and less than 

$1 million in annual receipts. 

§ 4280.104 Exception authority. 

The Administrator may, with the 

concurrence of the Secretary of 

Agriculture, make an exception, on a 

case-by-case basis, to any requirement 

or provision of this subpart that is not 

inconsistent with any authorizing 

statute or applicable law, if the 

Administrator determines that 

application of the requirement or 

provision would adversely affect the 

Federal government’s interest. 

§ 4280.105 Appeals. 

Only the grantee, borrower, lender, or 

holder can appeal an Agency decision 

made under this subpart. In cases where 

the Agency has denied or reduced the 

amount of final loss payment to the 

lender, the adverse decision may be 

appealed by the lender only. An adverse 

decision that only impacts the holder 

may be appealed by the holder only. A 

decision by a lender adverse to the 

interest of the borrower is not a decision 

by the Agency, whether or not 

concurred in by the Agency. An adverse 

decision regarding a grant application 

may be appealed by the applicant only. 

Appeals will be handled in accordance 

with 7 CFR part 11 of this title. 

§ 4280.106 Conflict of interest. 

(a) No conflict of interest or 

appearance of conflict of interest will be 

allowed. For purposes of this subpart, 

conflict of interest includes, but is not 

limited to, distribution or payment of 

grant and guaranteed loan funds or 

award of project contracts to an 

individual owner, partner, stockholder, 

or beneficiary of the applicant or 

borrower or a close relative of such an 

individual when such individual will 

retain any portion of the ownership of 

the applicant or borrower. 

(b) No member of or delegate to 

Congress shall receive any share or part 

of this grant or any benefit that may 

arise there from; but this provision shall 

not be construed to bar as a contractor 

under the grant a publicly held 

corporation whose ownership might 

include a member of Congress. 

§ 4280.107 USDA Departmental 

Regulations. 

All projects funded under this subpart 

are subject to the provisions of the 

Departmental regulations (7 CFR 

subtitle A), as applicable. 

§ 4280.108 Laws that contain other 

compliance requirements. 

(a) Equal employment opportunity. 

For all construction contracts and grants 

in excess of $10,000, the contractor 

must comply with Executive Order 

11246, as amended by Executive Order 

11375, and as supplemented by 

applicable Department of Labor 

regulations (41 CFR part 60). The 

applicant or the lender and borrower, as 

applicable, is responsible for ensuring 

that the contractor complies with these 

requirements. 

(b) Equal opportunity and 

nondiscrimination. The Agency will 

ensure that equal opportunity and 

nondiscrimination requirements are met 

in accordance with the Equal Credit 

Opportunity Act and 7 CFR part 15d, 

Nondiscrimination in Programs and 

Activities Conducted by USDA. The 

Agency will not discriminate against 

applicants on the basis of race, color, 

religion, national origin, sex, marital 

status, or age (provided that the 

applicant has the capacity to contract); 

the fact that all or part of the applicant’s 

income derives from any public 

assistance program; or the fact that the 

applicant has in good faith exercised 

any right under the Consumer Credit 

Protection Act. Lenders will comply 

with the requirements of the Equal 

Credit Opportunity Act (see 12 CFR part 

202). Such compliance will be 

accomplished prior to loan closing. 

(c) Civil rights compliance. Recipients 

of grants must comply with the 

Americans with Disabilities Act of 1990, 

Title VI of the Civil Rights Act of 1964, 

and Section 504 of the Rehabilitation 

Act of 1973. This may include 

collection and maintenance of data on 

the race, sex, and national origin of the 

recipient’s membership/ownership and 

employees. These data must be available 

to conduct compliance reviews in 

accordance with 7 CFR part 1901, 

subpart E, § 1901.204 of this title. Grants 

will require one subsequent compliance 

review after the last disbursement of 

grant funds has been made, and the 

facility has been in full operation for 90 

days. 

(d) Americans with Disabilities Act 

(ADA). Guaranteed loans that involve 

the construction of or addition to 

facilities that accommodate the public 

and commercial facilities, as defined by 

the ADA, must comply with the ADA. 

The lender and borrower are responsible 

for compliance. 

(e) Environmental analysis. Subpart G 

of part 1940 of this title outlines 

environmental procedures and 

requirements for this subpart. 

Prospective applicants are advised to 

contact the Agency to determine 

environmental requirements as soon as 

practicable after they decide to pursue 

any form of financial assistance directly 

or indirectly available through the 

Agency. 

(1) Any required environmental 

review must be completed by the 

Agency prior to the Agency obligating 

any funds. 

(2) The applicant will be notified of 

all specific compliance requirements, 

including, but not limited to, the 

publication of public notices, and 

consultation with State Historic 

Preservation Offices and the U.S. Fish 

and Wildlife Service. 

(3) A site visit by the Agency may be 

scheduled, if necessary, to determine 

the scope of the review. 

(4) The applicant taking any actions 

or incurring any obligations during the 

time of application or application 

review and processing that would either 

limit the range of alternatives to be 

considered or that would have an 

adverse effect on the environment, such 

as the initiation of construction, will 

result in project ineligibility. 

(f) Executive Order 12898. When a 

project is proposed and financial 

assistance requested, the Agency will 

conduct a Civil Rights Impact Analysis 

(CRIA) with regards to environmental 

justice. The CRIA must be conducted 

and the analysis documented utilizing 

Form RD 2006–38, ‘‘Civil Rights Impact 

Analysis Certification.’’ This 

certification must be done prior to loan 

approval, obligation of funds, or other 

commitments of Agency resources, 

including issuance of a Letter of 

Conditions or Form RD 4279–3, 

whichever occurs first. 

(g) Discrimination complaints. The 

regulations contained in 7 CFR part 

1901, subpart E of this title apply to this 

program, with the exception of 

guaranteed loans. Any person or any 

specific class of person, believing they 

have been subjected to discrimination 

may file a complaint within 180 days of 

an alleged act of discrimination or from 

the time discrimination is known, or 

should have been known, with the 

USDA Director, Office of Adjudication, 

Room 3326–W, Whitten Building, 1400 

Independence Avenue, SW., 

Washington, DC 20250–9410. 


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§ 4280.109 Ineligible applicants, 

borrowers, and owners. 

Applicants, borrowers, and owners 

will be ineligible to receive funds under 

this subpart as discussed in paragraphs 

(a) and (b) of this section. 

(a) If an applicant, borrower, or owner 

has an outstanding judgment obtained 

by the U.S. in a Federal Court (other 

than in the United States Tax Court), is 

delinquent in the payment of Federal 

income taxes, or is delinquent on a 

Federal debt, the applicant is not 

eligible to receive a grant or guaranteed 

loan until the judgment is paid in full 

or otherwise satisfied or the 

delinquency is resolved. 

(b) If an applicant or borrower is 

debarred from receiving Federal 

assistance, the applicant is not eligible 

to receive a grant or guaranteed loan 

under this subpart. 

§ 4280.110 General applicant and 

application provisions. 

(a) Complete applications. Applicants 

must submit complete applications in 

order to be considered. If an application 

is incomplete, the Agency will identify 

those parts of the application that are 

incomplete and provide a written 

explanation to the applicant for possible 

future resubmission. Upon receipt of a 

complete application by the appropriate 

Agency office and by the applicable 

application deadline, the Agency will 

complete its evaluation. 

(b) Application withdrawal. During 

the period between the submission of an 

application and the execution of loan 

and/or grant award documents, the 

applicant must notify the Agency, in 

writing, if the project is no longer viable 

or the applicant no longer is requesting 

financial assistance for the project. 

When the applicant so notifies the 

Agency, the selection will be rescinded 

or the application withdrawn. 

(c) Satisfactory progress. An applicant 

that has received one or more grants 

and/or guaranteed loans under this 

program must make satisfactory 

progress, as determined by the Agency, 

toward completion of any previously 

funded projects before the applicant 

will be considered for subsequent 

funding under this subpart. 

§ 4280.111 Notifications. 

(a) Eligibility. If an applicant is 

determined by the Agency to be eligible 

for participation, the Agency will notify 

the applicant or lender, as applicable, in 

writing. If the applicant or the project is 

ineligible, the Agency will inform the 

applicant or lender, as applicable, in 

writing of the decision, reasons 

therefore, and any appeal rights. No 

further evaluation of the application 

will occur. 

(b) Ineligible applications. If an 

application is determined to be 

ineligible at any time, the Agency will 

inform the applicant in writing of the 

decision, reasons therefore, and any 

appeal rights. No further evaluation of 

the application will occur. 

(c) Award. Each applicant will be 

notified of the Agency’s decision on 

their application. 

Renewable Energy System and Energy 

Efficiency Improvement Grants 

§ 4280.112 Applicant eligibility. 

To receive a RES or EEI grant under 

this subpart, an applicant must be an 

agricultural producer or rural small 

business, as defined in § 4280.103. 

§ 4280.113 Project eligibility. 

For a renewable energy system or 

energy efficiency improvement project 

to be eligible to receive a RES or EEI 

grant under this subpart, the proposed 

project must meet each of the criteria, as 

applicable, in paragraphs (a) through (j), 

as applicable, of this section, and is 

subject to the limitations specified in 

paragraph (k) of this section. 

(a) The project must be for the 

purchase of a renewable energy system 

or to make energy efficiency 

improvements. Energy efficiency 

improvements to existing renewable 

energy systems are eligible energy 

efficiency improvement projects. 

(b) The project must be for a precommercial or commercially available, 

and replicable technology. 

(c) The project must have technical 

merit, as determined using the 

procedures specified in § 4280.117(b). 

(d) The facility for which the project 

is being proposed must be located in a 

rural area, as defined in § 4280.103, in 

a State if the type of applicant is a rural 

small business, or in a rural or non-rural 

area in a State if the type of applicant 

is an agricultural producer. If the 

agricultural producer’s facility is in a 

non-rural area, then the application can 

only be for renewable energy systems or 

energy efficiency improvements on 

integral components of or that are 

directly related to the facility, such as 

vertically integrated operations, and are 

part of and co-located with the 

agriculture production operation. 

(e) The applicant must have a place of 

business in a State. 

(f) The applicant must be the owner 

of the project and control the revenues 

and expenses of the project, including 

operation and maintenance. A thirdparty under contract to the owner may 

be used to control revenues and 

expenses and manage the operation 

and/or maintenance of the project. 

(g) Sites must be controlled by the 

agricultural producer or rural small 

business for the financing term of any 

associated Federal loans or loan 

guarantees. 

(h) Satisfactory sources of revenue in 

an amount sufficient to provide for the 

operation, management, maintenance, 

and debt service of the project must be 

available for the life of the project. 

(i) For the purposes of this subpart, 

only hydropower projects with a rated 

power of 30 megawatts or less are 

eligible. The Agency refers to these 

hydropower sources as ‘‘small 

hydropower,’’ which includes 

hydropower projects commonly referred 

to as ‘‘micro-hydropower’’ and ‘‘minihydropower.’’ 

(j) The project has demonstrated 

technical feasibility. 

(k) No renewable energy system or 

energy efficiency improvement, or 

portion thereof, can be used for any 

residential purpose, including any 

residential portion of a farm, ranch, 

agricultural facility, or rural small 

business. However, an applicant may 

apply for funding for the installation of 

a second meter or provide certification 

in the application that any excess power 

generated by the renewable energy 

system will be sold to the grid and will 

not be used by the applicant for 

residential purposes. 

§ 4280.114 Qualification for simplified 

applications. 

When applying for a RES or EEI grant, 

applicants may qualify for the 

simplified application process. In order 

to use the simplified application 

process, each of the conditions specified 

in paragraphs (a)(1) through (a)(8) of this 

section must be met. 

(a) Simplified application criteria. 

(1) The applicant must be eligible in 

accordance with § 4280.112. 

(2) The project must be eligible in 

accordance with § 4280.113. 

(3) Total eligible project costs must be 

$200,000 or less. 

(4) The proposed project must use 

commercially available renewable 

energy systems or energy efficiency 

improvements. 

(5) Construction planning and 

performing development must be 

performed in compliance with 

§ 4280.119. The applicant or the 

applicant’s prime contractor must 

assume all risks and responsibilities of 

project development. 

(6) The applicant or the applicant’s 

prime contractor is responsible for all 

interim financing. 

(7) The proposed project is scheduled 

to be completed within 2 years after 


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entering into a grant agreement. The 

Agency may extend this period if the 

Agency determines, at its sole 

discretion, that the applicant is unable 

to complete the project for reasons 

beyond the applicant’s control. 

(8) The applicant agrees not to request 

reimbursement from funds obligated 

under this program until after project 

completion, including all operational 

testing and certifications acceptable to 

the Agency. 

(b) Application processing and 

administration. 

(1) Application documents. 

Application documents shall be 

submitted in accordance with 

§ 4280.116 or, if applying for a 

combined grant and loan, also in 

accordance with § 4280.165(c). 

(2) Project development. Section 

4280.119 applies, except as follows: 

(i) Any grantee may participate in 

project development without direct 

compensation subject to the approval in 

writing by the prime contractor, 

provided that all applicable 

construction practices, manufacturer 

instructions, and all safety codes and 

standards are followed during 

construction and testing, and the work 

product meets all applicable 

manufacture specifications, and all 

applicable codes and standards. The 

prime contractor remains responsible 

for the overall successful completion of 

the project, including any work done by 

the grantee, or 

(ii) A grantee who can demonstrate to 

the Agency that the grantee has the 

necessary experience and other 

resources to successfully complete the 

project may serve as the prime 

contractor/installer. Projects where the 

grantee serves as the prime contractor 

will need to secure the services of an 

independent, professionally 

responsible, qualified consultant to 

certify testing specifications, 

procedures, and testing results. 

(3) Project completion. The project is 

complete when the applicant has 

provided a written final project 

development, testing, and performance 

report acceptable to the Agency. Upon 

notification of receipt of an acceptable 

project completion report, the applicant 

may request grant reimbursement. The 

Agency reserves the right to observe the 

testing. 

(4) Insurance. Section 4280.118 

applies, except business interruption 

insurance is not required. 

§ 4280.115 RES and EEI grant funding. 

(a) The amount of grant funds that 

will be made available to an eligible 

RES or EEI project under this subpart 

will not exceed 25 percent of total 

eligible project costs. Eligible project 

costs are specified in paragraph (c) of 

this section. 

(b) The applicant is responsible for 

securing the remainder of the total 

eligible project costs not covered by 

grant funds. The amount secured by the 

applicant must be the remainder of total 

eligible project costs. 

(1) Without specific statutory 

authority, other Federal grant funds 

cannot be used to meet the matching 

fund requirement. 

(2) Passive third-party equity 

contributions are acceptable for 

renewable energy system projects, 

including those that are eligible for 

Federal production tax credits, provided 

the applicant meets the requirements of 

§ 4280.112. 

(c) Eligible project costs are only those 

costs associated with the items 

identified in paragraphs (c)(1) through 

(c)(10) of this section, as long as the 

items are an integral and necessary part 

of the renewable energy system or 

energy efficiency improvement. 

(1) Post-application purchase and 

installation of equipment (new, 

refurbished, or remanufactured), except 

agricultural tillage equipment, used 

equipment, and vehicles. 

(2) Post-application construction or 

improvements, except residential. 

(3) Energy audits or assessments. 

(4) Permit and license fees. 

(5) Professional service fees, except 

for application preparation. 

(6) Feasibility studies and Technical 

reports. 

(7) Business plans. 

(8) Retrofitting. 

(9) Construction of a new energy 

efficient facility only when the facility 

is used for the same purpose, is 

approximately the same size, and, based 

on the energy assessment or audit, will 

provide more energy savings than 

improving an existing facility. Only 

costs identified in the energy 

assessment or audit for energy efficiency 

improvements are allowed. 

(10) Energy efficiency improvements 

are limited to only improvements 

identified in the energy assessment or 

audit. Equipment identified by the 

assessment or audit to be replaced shall 

be replaced with equipment similar in 

capacity. If the energy efficiency 

improvement has a greater capacity than 

the existing equipment, the Agency will 

pro-rate the energy efficiency 

improvement’s total eligible project 

costs based on the capacity of the 

existing equipment. A calculation shall 

be performed by dividing the capacity of 

the existing equipment by the capacity 

of the proposed equipment to determine 

the percentage of the energy efficiency 

improvement’s eligible project costs that 

the Agency will use in determining the 

maximum grant assistance under this 

subpart (see example). 

Example. A business plans to build a 

new production line with a capacity of 

625 units per hour to replace an existing 

production line that produces 500 units 

per hour. The total project costs of the 

new production line is $20,000, of 

which $15,000 would otherwise qualify 

as eligible project costs. However, 

because the new production line has a 

greater production capacity than the 

existing line (625 units per hour versus 

500 units per hour), only a portion of 

the $15,000 of otherwise eligible project 

costs would be used in determining 

total eligible project cost and the 

maximum grant assistance available. In 

this example, because the original 

capacity (500 units per hour) is 80 

percent of the new capacity (625 units 

per hour), only 80 percent of the 

$15,000 of otherwise eligible project 

costs associated with the new 

production line (i.e., $12,000) will be 

considered as total eligible project cost 

to be financed under this subpart. The 

maximum grant award in this example 

would be $3,000, which is equal to 

$12,000 × 25 percent. 

(d) The maximum amount of grant 

assistance to one individual or entity 

will not exceed $750,000 per Federal 

fiscal year. For those applicants that 

have not received a grant award during 

the previous 2 Federal fiscal years, 

additional points will be added to their 

priority score. 

(e) Applications for renewable energy 

system grants will be accepted for a 

minimum grant request of $2,500 up to 

a maximum of $500,000. 

(f) Applications for energy efficiency 

improvement grants will be accepted for 

a minimum grant request of $1,500 up 

to a maximum of $250,000. 

(g) In determining the amount of a 

RES or EEI grant awarded, the Agency 

will take into consideration the 

following six criteria: 

(1) The type of renewable energy 

system to be purchased; 

(2) The estimated quantity of energy 

to be generated by the renewable energy 

system; 

(3) The expected environmental 

benefits of the renewable energy system; 

(4) The quantity of energy savings 

expected to be derived from the activity, 

as demonstrated by an energy audit; 

(5) The estimated period of time for 

the energy savings generated by the 

activity to equal the cost of the activity; 

and 

(6) The expected energy efficiency of 

the renewable energy system. 


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(h) Time limit. Unless otherwise 

agreed to by the Agency, any renewable 

energy system or energy efficiency 

improvement grant agreement under 

this subpart will terminate 2 years from 

the date the Agency signs the 

agreement. 

§ 4280.116 Application and 

documentation. 

The requirements in this section 

apply to RES and EEI grant applications 

under this subpart. 

(a) General. To ensure that projects 

are accurately scored by the Agency, 

applicants are requested to number each 

evaluation criteria and include, in that 

section, its corresponding supporting 

documentation and calculations 

according to § 4280.117. 

(1) One funding type applications. 

Only one type of funding application 

(grant-only, guaranteed loan-only, or 

guaranteed loan/grant combination) for 

each project can be submitted under this 

subpart per Federal fiscal year. 

(2) Environmental information. Each 

application must include all 

environmental review documents with 

supporting documentation in 

accordance with 7 CFR part 1940, 

subpart G. 

(3) Foreign technology. As stated in 

§ 4280.113(b), projects must be for a precommercial or commercially available 

technology. The Agency’s position is 

that if the system is currently 

commercially available only outside the 

United States (U.S.), then applicants 

must provide authoritative evidence of 

the foreign operating history, 

performance, and reliability in order to 

address the proven operating history 

identified in the definition. 

‘‘Commercial’’ applicants must provide 

evidence that professional service 

providers, trades, large construction 

equipment providers and labor are 

readily available domestically and 

familiar with installation procedures 

and practices, and spare parts and 

service are readily available in the U.S. 

to properly maintain and operate the 

system. All warranties must be valid in 

the U.S. 

(4) Commercial application 

demonstration of pre-commercial 

technologies. In accordance with the 

definition of ‘‘pre-commercial’’ 

technology found in § 4280.103, 

technical and economic potential for 

commercial application must be 

demonstrated to the Agency. In order to 

demonstrate the system has emerged 

through research and development as 

well as the demonstration process, 

applicants must provide authoritative 

evidence of the operating history, 

performance, and reliability past 

completion of start-up, shake-down, and 

commissioning. Typically, and in line 

with financial and operating 

performance evaluation protocol, the 

documented operating history, which 

may be established domestically or 

outside the U.S., should provide 

performance data for a minimum of 12 

months. The time period will address 

the economic and technical 

performance potential of the precommercial technology, as defined in 

§ 4280.103. Lastly, in accordance with 

demonstrating the potential for 

commercial application, applicants 

must provide evidence that professional 

service providers, trades, large 

construction equipment providers, and 

labor are readily available domestically 

and sufficiently familiar with 

installation procedures and practices, 

and spare parts and service are available 

in the U.S. to properly maintain and 

operate the system. Any warranties have 

to be valid in the U.S. 

(b) Grant application content. 

Applications and documentation for 

projects using the simplified application 

process, as described in § 4280.114, 

must provide the required information 

organized pursuant to the Table of 

Contents in a chapter format presented 

in the order shown in paragraphs (b)(1) 

through (b)(3) and (b)(5) through (b)(7) 

of this section; paragraph (b)(4) of this 

section does not apply for projects using 

the simplified application process. 

Applications and documentation for 

projects not using the simplified 

application process must provide the 

required information organized 

pursuant to the Table of Contents in a 

chapter format presented in the order 

shown in paragraphs (b)(1) through 

(b)(8) of this section. 

(1) Forms, certifications, and 

organizational documents. Each 

application must contain the items 

identified in paragraphs (b)(1)(i) through 

(b)(1)(iv) in this section. 

(i) Project specific forms. 

(A) Form SF–424, ‘‘Application for 

Federal Assistance.’’ 

(B) Form SF–424C, ‘‘Budget 

Information-Construction Programs.’’ A 

more detailed budget breakdown is 

required in the Technical Report. 

(C) Form SF–424D, ‘‘AssurancesConstruction Programs.’’ 

(D) Form RD 1940–20, ‘‘Request for 

Environmental Information.’’ 

(ii) Forms and certifications. 

(A) AD–1049, ‘‘Certification Regarding 

Drug-Free Workplace Requirements 

(Grants) Alternative I—For Grantees 

Other than Individuals.’’ 

(B) Form AD–1048, ‘‘Certification 

Regarding Debarment, Suspension, 

Ineligibility and Voluntary Exclusion— 

Lower Tier Covered Transactions.’’ 

(C) Exhibit A–1 of RD Instruction 

1940–Q, ‘‘Certification for Contracts, 

Grants and Loans,’’ required by 7 CFR 

3018.110 if the grant exceeds $100,000. 

(D) Form SF–LLL, ‘‘Disclosure of 

Lobbying Activities,’’ must be completed 

if the applicant or borrower has made or 

agreed to make payment using funds 

other than Federal appropriated funds 

to influence or attempt to influence a 

decision in connection with the 

application. 

(E) AD–1047, ‘‘Certification Regarding 

Debarment, Suspension, and Other 

Responsibility Matters-Primary Covered 

Transactions.’’ 

(F) Form RD 400–1, ‘‘Equal 

Opportunity Agreement.’’ 

(G) Form RD 400–4, ‘‘Assurance 

Agreement.’’ 

(H) Applicants and borrowers must 

provide a certification indicating 

whether or not there is a known 

relationship or association with an 

Agency employee. 

(iii) Organizational documents. 

Except for sole proprietors, each 

applicant must submit, with the 

application, a copy of the legal 

organizational documents. 

(iv) The applicant’s Dun and 

Bradstreet Data Universal Numbering 

System (DUNS) number (except for 

individuals). 

(2) Table of Contents. Include page 

numbers for each component of the 

application in the table of contents. 

Begin pagination immediately following 

the Table of Contents. 

(3) Project Summary. Provide a 

concise summary of the project proposal 

and applicant information, project 

purpose and need, and project goals that 

includes the following: 

(i) Title. Provide a descriptive title of 

the project (identified on SF 424). 

(ii) Applicant eligibility. Describe how 

each of the applicable criteria identified 

in §§ 4280.109 and 4280.112 is met. 

(iii) Project eligibility. Describe how 

each of the criteria in § 4280.113(a) 

through (j), as applicable, is met. Clearly 

state whether the application is for the 

purchase of a renewable energy system 

or to make energy efficiency 

improvements. The response to 

§ 4280.113(a) must include a brief 

description of the system or 

improvement. This description must be 

sufficient to provide the reader with a 

frame of reference when reviewing the 

rest of the application. Additional 

project description information may be 

needed later in the application. 

(iv) Operation description. Describe 

the applicant’s total farm/ranch/ 

business operation and the relationship 


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of the proposed project to the 

applicant’s total farm/ranch/business 

operation. Provide a description of the 

ownership of the applicant, including a 

list of individuals and/or entities with 

ownership interest, names of any 

corporate parents, affiliates, and 

subsidiaries, as well as a description of 

the relationship, including products, 

between these entities. 

(v) Financial information for gross 

income or size determination. Provide 

financial information to allow the 

Agency to determine the agricultural 

producer’s percent of gross income 

derived from agricultural operations or 

the rural small business’ size, as 

applicable. All information submitted 

under this paragraph must be 

substantiated by authoritative records. 

(A) Rural small businesses. Provide 

sufficient information to determine total 

annual receipts for and number of 

employees of the business and any 

parent, subsidiary, or affiliates at other 

locations. Voluntarily providing tax 

returns is one means of satisfying this 

requirement. The information provided 

must be sufficient for the Agency to 

make a determination of business size as 

defined by SBA. 

(B) Agricultural producers. Provide 

the gross market value of your 

agricultural products, gross agricultural 

income, and gross nonfarm income of 

the applicant for the calendar year 

preceding the year in which you submit 

your application. 

(4) Financial information. Financial 

information is required on the total 

operation of the agricultural producer/ 

rural small business and its parent, 

subsidiary, or affiliates at other 

locations. All information submitted 

under this paragraph must be 

substantiated by authoritative records. 

(i) Historical financial statements. 

Provide historical financial statements 

prepared in accordance with Generally 

Accepted Accounting Practices (GAAP) 

for the past 3 years, including income 

statements and balance sheets. If 

agricultural producers are unable to 

present this information in accordance 

with GAAP, they may instead present 

financial information for the past years 

in the format that is generally required 

by commercial agriculture lenders. 

(ii) Current balance sheet and income 

statement. Provide a current balance 

sheet and income statement prepared in 

accordance with GAAP and dated 

within 90 days of the application. 

Agricultural producers should present 

financial information in the format that 

is generally required by commercial 

agriculture lenders. 

(iii) Pro forma financial statements. 

Provide pro forma balance sheet at startup of the agricultural producer’s/rural 

small business’ business that reflects the 

use of the loan proceeds or grant award; 

and 3 additional years, indicating the 

necessary start-up capital, operating 

capital, and short-term credit; and 

projected cash flow and income 

statements for 3 years supported by a 

list of assumptions showing the basis for 

the projections. 

(5) Matching funds. Submit a 

spreadsheet identifying sources of 

matching funds, amounts, and status of 

matching funds. The spreadsheet must 

also include a directory of matching 

funds source contact information. 

Attach any applications, 

correspondence, or other written 

communication between applicant and 

matching fund source. 

(6) Self-evaluation score. Self-score 

the project using the evaluation criteria 

in § 4280.117(c). To justify the score, 

submit the total score along with 

appropriate calculations and attached 

documentation, or specific crossreferences to information elsewhere in 

the application. 

(7) Renewable Energy System and 

Energy Efficiency Improvements 

Technical Report. A Technical Report 

must be submitted as part of the 

application to allow the Agency to 

determine the overall technical merit of 

the renewable energy system or energy 

efficiency improvement project. 

(i) Simplified applications. Simplified 

applications, which are submitted for 

renewable energy system projects or 

energy efficiency improvement projects 

with total eligible project costs of 

$200,000 or less, must include a 

Technical Report prepared in 

accordance with the requirements 

specified in paragraphs (b)(7)(i)(A) 

through (b)(7)(i)(C) of this section. 

(A) The Technical Report must be 

prepared in accordance with Appendix 

A, C, or D, as applicable, of this subpart. 

If a renewable energy system project 

does not fit one of the technologies 

identified in Appendices A, C, and D, 

the applicant must submit a Technical 

Report in accordance with paragraph 

(b)(7)(ii) of this section. The information 

in all Technical Reports must be of 

sufficient detail to allow the Agency to 

score the project and evaluate its 

technical feasibility. 

(B) Either an energy assessment or an 

energy audit is required for energy 

efficiency improvement projects. For 

energy efficiency improvement projects 

with total eligible project costs greater 

than $50,000, an energy audit must be 

conducted; it must be conducted by or 

reviewed and certified by an energy 

auditor. For energy efficiency 

improvement projects with total eligible 

project costs of $50,000 or less, an 

energy assessment or an energy audit 

may be conducted by either an energy 

assessor or an energy auditor. 

(C) Technical Reports prepared prior 

to the applicant’s selection of a prime 

contractor may be modified after 

selection, pursuant to input from the 

prime contractor, and submitted to the 

Agency, provided the overall scope of 

the project is not materially changed as 

determined by the Agency. Changes in 

the report must be accompanied by an 

updated Form RD 1940–20. 

(ii) Full applications. Full 

applications, which must be submitted 

for applications for renewable energy 

system projects or energy efficiency 

improvement projects with total eligible 

project costs greater than $200,000, 

must include a Technical Report 

prepared in accordance with Appendix 

B, C, or D, as applicable, of this subpart 

and with paragraphs (b)(7)(ii)(A) 

through (b)(7)(ii)(G) of this section, as 

applicable. 

(A) The Technical Report must 

demonstrate that the renewable energy 

system or energy efficiency 

improvement project can be installed 

and perform as intended in a reliable, 

safe, cost-effective, and legally 

compliant manner. 

(B) Either an energy assessment or an 

energy audit is required for energy 

efficiency improvement projects. For 

energy efficiency improvement projects 

with total eligible project costs greater 

than $50,000, an energy audit must be 

conducted; it must be conducted by or 

reviewed and certified by an energy 

auditor. For energy efficiency 

improvement projects with total eligible 

project costs of $50,000 or less, an 

energy assessment or an energy audit 

may be conducted by either an energy 

assessor or an energy auditor. 

(C) For renewable energy system 

projects with total eligible project costs 

greater than $400,000 and for energy 

efficiency improvement projects with 

total eligible project costs greater than 

$200,000, the design review, installation 

monitoring, testing prior to commercial 

operation, and project completion 

certification will require the services of 

a licensed professional engineer (PE) or 

team of licensed PEs. 

(D) For projects with total eligible 

project costs greater than $1,200,000, 

the Technical Report must be reviewed 

and include an opinion and 

recommendation by an independent 

qualified consultant. 

(E) Technical Reports prepared prior 

to the applicant’s selection of a final 

design, equipment vendor, or prime 

contractor, or other significant decision 

may be modified and resubmitted to the 


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Agency, provided the overall scope of 

the project is not materially changed as 

determined by the Agency. Changes in 

the Technical Report must be 

accompanied by an updated Form RD 

1940–20. 

(F) All information provided in the 

Technical Report will be evaluated 

against the requirements provided in 

Appendix B, C, or D, as applicable, of 

this subpart. Any Technical Report not 

prepared in the following format and in 

accordance with Appendix B, C, or D, 

where applicable, will be penalized 

under scoring for technical merit. 

(G) All Technical Reports shall follow 

the outline presented below and shall 

contain the information described in 

paragraphs (b)(7)(ii)(G)(1) through 

(b)(7)(ii)(G)(10) of this section and 

Appendix B, C, or D, as applicable, of 

this subpart if the technology is 

identified in Appendix B, C, or D for the 

particular project. If none of the 

Technical Reports in Appendix B apply 

to the proposed technology, the 

applicant may submit a Technical 

Report that conforms to the overall 

outline and subjects specified in 

paragraph (b)(7)(ii)(G) of this section. 

For Technical Reports prepared for 

technologies not identified in 

Appendices B, C, and D, the Agency 

will review the reports and notify, in 

writing, the applicant of the changes to 

the report required in order for the 

Agency to accept the report. 

(1) Qualifications of the project team. 

Describe the project team, their 

professional credentials, and relevant 

experience. The description must 

support that the project team service, 

equipment, and installation providers 

have the necessary professional 

credentials, licenses, certifications, or 

relevant experience to develop the 

proposed project. 

(2) Agreements and permits. Describe 

the necessary agreements and permits 

required for the project and the 

anticipated schedule for securing those 

agreements and permits. For example, 

interconnection agreements and 

purchase power agreements are 

necessary for all renewable energy 

projects electrically interconnected to 

the utility grid. The applicant must 

demonstrate that the applicant is 

familiar with the regulations and utility 

policies and that these arrangements 

will be secured in a reasonable 

timeframe. 

(3) Energy or resource assessment. 

Describe the quality and availability of 

the renewable resource, and an 

assessment of expected energy savings 

through the deployment of the proposed 

system or increased production created 

by the system. 

(4) Design and engineering. Describe 

the intended purpose of the project and 

the design, engineering, testing, and 

monitoring needed for the proposed 

project. The description must support 

that the system will be designed, 

engineered, tested, and monitored so as 

to meet its intended purpose, ensure 

public safety, and comply with 

applicable laws, regulations, 

agreements, permits, codes, and 

standards. In addition, the applicant 

must identify all the major equipment 

that is proprietary equipment and justify 

how this unique equipment is needed to 

meet the requirements of the proposed 

design. 

(5) Project development. Describe the 

overall project development method, 

including the key project development 

activities and the proposed schedule for 

each activity. The description must 

identify each significant historical and 

projected activity, its beginning and 

end, and its relationship to the time 

needed to initiate and carry the activity 

through to successful project 

completion. The description must 

address applicant project development 

cash flow requirements. Details for 

equipment procurement and installation 

shall be addressed in paragraphs 

(b)(7)(ii)(G) (7) and (b)(7)(ii)(G)(8) of this 

section. 

(6) Project economic assessment. 

Describe the financial performance of 

the proposed project. The description 

must address project costs, energy 

savings, and revenues, including 

applicable investment and production 

incentives. Cost centers include, but are 

not limited to, administrative and 

general, fuel supply, operations and 

maintenance, product delivery and debt 

service. Revenues to be considered must 

accrue from the sale of energy, offset or 

savings in energy costs, byproducts, and 

green tags. Incentives to be considered 

must accrue from government entities. 

(7) Equipment procurement. Describe 

the availability of the equipment 

required by the system. The description 

must support that the required 

equipment is available and can be 

procured and delivered within the 

proposed project development schedule. 

(8) Equipment installation. Describe 

the plan for site development and 

system installation, including any 

special equipment requirements. In all 

cases, the system or improvement must 

be installed in conformance with 

manufacturer’s specifications and 

design requirements, and comply with 

applicable laws, regulations, 

agreements, permits, codes, and 

standards. 

(9) Operations and maintenance. 

Describe the operations and 

maintenance requirements of the 

system, including major rebuilds and 

component replacements necessary for 

the system to operate as designed over 

the design life. All systems or 

improvements must have a warranty. 

The warranty must cover and provide 

protection against both breakdown and 

a degradation of performance. The 

performance of the renewable energy 

system or energy efficiency 

improvement must be monitored and 

recorded as appropriate to the specific 

technology. 

(10) Dismantling and disposal of 

project components. Describe a plan for 

dismantling and disposing of project 

components and associated wastes at 

the end of their useful lives. The budget 

for and any unique concerns associated 

with the dismantling and disposal of 

project components and their wastes 

must also be described. 

(8) Business-level feasibility study for 

renewable energy systems. For each 

application for a renewable energy 

system project, with total eligible 

project costs greater than $200,000, a 

business-level feasibility study by an 

independent, qualified consultant will 

be required by the Agency for start-up 

businesses or existing businesses. An 

acceptable business-level feasibility 

study must conform to the requirements 

of an acceptable feasibility study as 

specified in Appendix E of this subpart. 

§ 4280.117 Evaluation of RES and EEI 

grant applications. 

(a) General review. The Agency will 

evaluate each RES and EEI application 

and make a determination as to whether 

the applicant is eligible, the proposed 

grant is for an eligible project, and the 

proposed grant complies with all 

applicable statutes and regulations. 

(b) Technical merit. The Agency’s 

determination of a project’s technical 

merit will be based on the information 

provided by the applicant. The Agency 

may engage the services of other 

government agencies or other 

recognized industry experts in the 

applicable technology field, at its 

discretion, to evaluate and rate the 

application. The Agency may use this 

evaluation and rating to determine the 

level of technical merit of the proposed 

project. Projects that the Agency 

determines are without technical merit 

shall be deemed ineligible. 

(c) Evaluation criteria. Agency 

personnel will score each application 

based on the evaluation criteria 

specified in paragraphs (c)(1) through 

(c)(10) of this section. 

(1) Quantity of energy replaced, 

produced, or saved, and flexible fuel 

pumps. Points may only be awarded for 


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energy replacement, energy savings, or 

energy generation, or for flexible fuel 

pumps. Points will not be awarded for 

more than one category. 

(i) Energy replacement. If the 

proposed renewable energy system is 

intended primarily for self-use by the 

agricultural producer or rural small 

business and will provide energy 

replacement of greater than zero, but 

equal to or less than 25 percent, 5 points 

will be awarded; greater than 25 

percent, but equal to or less than 50 

percent, 10 points will be awarded; or 

greater than 50 percent, 15 points will 

be awarded. Energy replacement is to be 

determined by dividing the estimated 

quantity of renewable energy to be 

generated over a 12-month period by the 

estimated quantity of energy consumed 

over the same 12-month period during 

the previous year by the applicable 

energy application. The estimated 

quantities of energy must be converted 

to either British thermal units (BTUs), 

Watts, or similar energy equivalents to 

facilitate scoring. If the estimated energy 

produced equals more than 150 percent 

of the energy requirements of the 

applicable process(es), the project will 

be scored as an energy generation 

project. 

(ii) Energy savings. If the estimated 

energy expected to be saved by the 

installation of the energy efficiency 

improvements will be from 20 percent 

up to, but not including 30 percent, 5 

points will be awarded; 30 percent up 

to, but not including 35 percent, 10 

points will be awarded; or, 35 percent 

or greater, 15 points will be awarded. 

Energy savings will be determined by 

the projections in an energy assessment 

or audit. Projects with total eligible 

project costs of $50,000 or less that opt 

to obtain a professional energy audit 

will be awarded an additional 5 points. 

(iii) Energy generation. If the 

proposed renewable energy system is 

intended primarily for production of 

energy for sale, 10 points will be 

awarded. 

(iv) Flexible fuel pump(s). (A) If the 

proposed project is for one or more 

flexible fuel pumps, points will be 

awarded based on the overall percentage 

of proposed flexible fuel pumps to the 

applicant’s total retail pump inventory 

at the facility. The percentage of 

proposed flexible fuel pumps shall be 

calculated using the following equation. 

Equation: FFP% = (FFPx/TP) × 100 

where: FFP% = Proposed flexible fuel 

pump(s), percentage. 

FFPx = Number of proposed flexible fuel 

pumps to be installed at applicant’s 

facility. 

TP = Number of proposed pumps to be 

installed plus the number of pumps 

installed and operating at the facility. 

(B) If the proposed flexible fuel pump 

percentage calculated is 5 percent or 

below, 5 points will be awarded; above 

5 percent and up to, but not including, 

10 percent, 10 points will be awarded; 

or 10 percent and above, 15 points will 

be awarded. 

(2) Environmental benefits. If the 

purpose of the proposed system 

contributes to the environmental goals 

and objectives of other Federal, State, or 

local programs, 10 points will be 

awarded. Points will only be awarded 

for this paragraph if the applicant is able 

to provide documentation from an 

appropriate authority supporting this 

claim. 

(3) Commercial availability. If the 

proposed system or improvement is 

currently commercially available and 

replicable, 5 points will be awarded. If 

the proposed system or improvement is 

commercially available and replicable 

and is also provided with a 5-year or 

longer warranty providing the purchaser 

protection against system degradation or 

breakdown or component breakdown, 

10 points will be awarded. 

(4) Technical merit score. The 

Technical Merit of each project will be 

determined using the procedures 

specified in paragraphs (c)(4)(i) and 

(c)(4)(ii) of this section. The procedures 

specified in paragraph (c)(4)(i) will be 

used to score paragraphs (c)(4)(i)(A) 

through (c)(4)(i)(J) of this section. The 

final score awarded will be calculated 

using the procedures described in 

paragraph (c)(4)(ii) of this section. 

(i) Technical merit. Each 

subparagraph has its own maximum 

possible score and will be scored 

according to the following criteria: If the 

description in the subparagraph has no 

significant weaknesses and exceeds the 

requirements of the subparagraph, 100 

percent of the total possible score for the 

subparagraph will be awarded. If the 

description has one or more significant 

strengths and meets the requirements of 

the subparagraph, 80 percent of the total 

possible score will be awarded for the 

subparagraph. If the description meets 

the basic requirements of the 

subparagraph, but also has several 

weaknesses, 60 percent of the points 

will be awarded. If the description is 

lacking in one or more critical aspects, 

key issues have not been addressed, but 

the description demonstrates some 

merit or strengths, 40 percent of the 

total possible score will be awarded. If 

the description has serious deficiencies, 

internal inconsistencies, or is missing 

information, 20 percent of the total 

possible score will be awarded. If the 

description has no merit in this area, 0 

percent of the total possible score will 

be awarded. The total possible points 

for Technical Merit is 35 points. 

(A) Qualifications of the project team 

(maximum score of 10 points). The 

applicant has described the project team 

service providers, their professional 

credentials, and relevant experience. 

The description supports that the 

project team service, equipment, and 

installation providers have the 

necessary professional credentials, 

licenses, certifications, or relevant 

experience to develop the proposed 

project. 

(B) Agreements and permits 

(maximum score of 5 points). The 

applicant has described the necessary 

agreements and permits required for the 

project and the schedule for securing 

those agreements and permits. 

(C) Energy or resource assessment 

(maximum score of 10 points). The 

applicant has described the quality and 

availability of a suitable renewable 

resource or an assessment of expected 

energy savings for the proposed system. 

(D) Design and engineering 

(maximum score of 30 points). The 

applicant has described the design, 

engineering, and testing needed for the 

proposed project. The description 

supports that the system will be 

designed, engineered, and tested so as to 

meet its intended purpose, ensure 

public safety, and comply with 

applicable laws, regulations, 

agreements, permits, codes, and 

standards. 

(E) Project development schedule 

(maximum score of 5 points). The 

applicant has described the 

development method, including the key 

project development activities and the 

proposed schedule for each activity. The 

description identifies each significant 

task, its beginning and end, and its 

relationship to the time needed to 

initiate and carry the project through to 

successful completion. The description 

addresses grantee or borrower project 

development cash flow requirements. 

(F) Project economic assessment 

(maximum score of 20 points). The 

applicant has described the financial 

performance of the proposed project, 

including the calculation of simple 

payback. The description addresses 

project costs and revenues, such as 

applicable investment and production 

incentives, and other information to 

allow the assessment of the project’s 

cost effectiveness. 

(G) Equipment procurement 

(maximum score of 5 points). The 

applicant has described the availability 

of the equipment required by the 

system. The description supports that 


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the required equipment is available, and 

can be procured and delivered within 

the proposed project development 

schedule. 

(H) Equipment installation (maximum 

score of 5 points). The applicant has 

described the plan for site development 

and system installation. 

(I) Operation and maintenance 

(maximum score of 5 points). The 

applicant has described the operations 

and maintenance requirements of the 

system necessary for the system to 

operate as designed over the design life. 

(J) Dismantling and disposal of project 

components (maximum score of 5 

points). The applicant has described the 

requirements for dismantling and 

disposing of project components at the 

end of their useful life and associated 

wastes. 

(ii) Calculation of Technical Merit 

Score. To determine the actual points 

awarded a project for Technical Merit, 

the following procedure will be used: 

The score awarded for paragraphs 

(c)(4)(i)(A) through (c)(4)(i)(J) of this 

section will be added together and then 

divided by 100, the maximum possible 

score, to achieve a percentage. This 

percentage will then be multiplied by 

the total possible points of 35 to achieve 

the points awarded for the proposed 

project for Technical Merit. 

(5) Readiness. If the applicant has 

written commitments from the source(s) 

confirming commitment of 50 percent 

up to but not including 75 percent of the 

matching funds prior to the Agency 

receiving the complete application, 5 

points will be awarded. If the applicant 

has written commitments from the 

source(s) confirming commitment of 75 

percent up to but not including 100 

percent of the matching funds prior to 

the Agency receiving the complete 

application, 10 points will be awarded. 

If the applicant has written 

commitments from the source(s) of 

matching funds confirming commitment 

of 100 percent of the matching funds 

prior to the Agency receiving the 

complete application, 15 points will be 

awarded. 

(6) Small agricultural producer/very 

small business. If the applicant is an 

agricultural producer producing 

agricultural products with a gross 

market value of less than $600,000 in 

the preceding year, 5 points will be 

awarded. If the applicant is an 

agricultural producer producing 

agricultural products with a gross 

market value of less than $200,000 in 

the preceding year or is a very small 

business, as defined in § 4280.103, 10 

points will be awarded. 

(7) Simplified application/low cost 

projects. If the applicant is eligible for 

and uses the simplified application 

process or the project has total eligible 

project costs of $200,000 or less, 5 

points will be awarded. 

(8) Previous grantees and borrowers. If 

an applicant has not been awarded a 

grant or loan under this program within 

the 2 previous Federal fiscal years, 5 

points will be awarded. 

(9) Simple payback. A maximum of 

15 points will be awarded for either 

renewable energy systems or energy 

efficiency improvements; points will 

not be awarded for more than one 

category. In either case, points will be 

awarded based on the simple payback of 

the project. 

(i) Renewable energy systems, 

including flexible fuel pumps. If the 

simple payback of the proposed project 

is: 

(A) Less than 10 years, 15 points will 

be awarded; 

(B) 10 years up to but not including 

15 years, 10 points will be awarded; 

(C) 15 years up to and including 20 

years, 5 points will be awarded; or 

(D) Longer than 20 years, no points 

will be awarded. 

(ii) Energy efficiency improvements. If 

the simple payback of the proposed 

project is: 

(A) Less than 4 years, 15 points will 

be awarded; 

(B) 4 years up to but not including 8 

years, 10 points will be awarded; 

(C) 8 years up to and including 12 

years, 5 points will be awarded; or 

(D) Longer than 12 years, no points 

will be awarded. 

(10) State Director and Administrator 

priorities and points. A State Director, 

for its State allocation under this 

subpart, or the Administrator, for 

making awards from the National Office 

reserve, may award up to 10 points to 

an application if the application is for 

an under-represented technology or for 

flexible fuel pumps or if selecting the 

application would help achieve 

geographic diversity. In no case shall an 

application receive more than 10 points 

under this criterion. 

§ 4280.118 Insurance requirements. 

Agency approved insurance coverage 

must be maintained for the life of the 

RES or EEI grant unless this requirement 

is waived or modified by the Agency in 

writing. 

(a) National flood insurance is 

required in accordance with 7 CFR part 

1806, subpart B, of this title, if 

applicable. 

(b) Business interruption insurance is 

required except for projects with total 

eligible project costs of $200,000 or less. 

§ 4280.119 Construction planning and 

performing development. 

The requirements of this section 

apply for planning, designing, bidding, 

contracting, and constructing renewable 

energy systems and energy efficiency 

improvement projects as applicable. For 

contracts of $200,000 or less, the simple 

contract method, as specified in 

paragraph (e) of this section, may be 

used. Contracts greater than $200,000 

shall use the contract method specified 

in paragraph (g) of this section. 

(a) Technical services. Applicants are 

responsible for providing the 

engineering, architectural, and 

environmental services necessary for 

planning, designing, bidding, 

contracting, inspecting, and 

constructing their facilities. Services 

may be provided by the applicant’s ‘‘inhouse’’ engineer or architect or through 

contract, subject to Agency concurrence. 

Engineers and architects must be 

licensed in the State where the facility 

is to be constructed. 

(b) Design policies. Facilities funded 

by the Agency will meet the 

requirements of § 1780.57(b), (c), (d), 

and (o) of this title. Final plans and 

specifications must be reviewed by the 

Agency and approved prior to the start 

of construction. 

(c) Owners accomplishing work. In 

some instances, owners may wish to 

perform a part of the work themselves. 

For an owner to perform project 

development work, the owner must 

meet the experience requirements of 

§ 1780.67 of this title. For an owner to 

provide a portion of the work, with the 

remainder to be completed by a 

contractor, a clear understanding of the 

division of work must be established 

and delineated in the contract. In such 

cases, the contractor will be required to 

inspect the owner’s work and accept it. 

Owners are not eligible for payment for 

their own work as it is not an eligible 

project cost. See § 4280.115(c) of this 

subpart for further details on eligible 

project costs. 

(d) Equipment purchases. Equipment 

purchases of less than $200,000 will not 

require a performance and payment 

bond, unless required by the applicant, 

as long as the contract purchase is a 

lump sum payment and the 

manufacturer provides the required 

warranties on the equipment as outlined 

in paragraph (i) in the applicable section 

found in Appendices A, B, C, and D of 

this subpart. Payment shall be certified 

by copies of the Manufacturer’s paid 

invoices and warranty documents. 

(e) Simple contract method. The 

simple contract method may be used for 

small projects with a contract not 

greater than $200,000. In smaller 


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projects, Agency funds will typically be 

used to reimburse project costs upon 

completion of the work as a lump sum 

payment. Partial payments will be made 

in accordance with Form RD 4280–2 

and Form RD 1924–6, ‘‘Construction 

Contract,’’ or other Agency approved 

contract. All construction work will be 

performed under a written contract, as 

described below. A design/build 

method, where the same person or 

entity provides design and engineering 

work, as well as construction or 

installation, may be used under this 

method. 

(1) Contracting requirements 

threshold. For contracts above $100,000, 

certain Federal requirements, including 

surety, must be met. An attachment to 

the contract may be used to incorporate 

language for these requirements. 

(2) Forms used. Form RD 1924–6 or 

other Agency approved contract must be 

used. Other contracts must be approved 

by the Agency and may be used only if 

they are customarily used in the area 

and protect the interest of the applicant 

and the Government with respect to 

compliance with items such as the 

drawings, specifications, payments for 

work, inspections, completion, 

nondiscrimination in construction work 

and acceptance of the work. The Agency 

will not become a party to a 

construction contract or incur any 

liability under it. No contract shall 

become effective until concurred in 

writing by the Agency. Such 

concurrence statement shall be attached 

to and made a part of the contract. 

(3) Contract provisions. Contracts will 

have a listing of attachments and the 

minimum provisions of the contract will 

include: 

(i) The contract sum; 

(ii) The dates for starting and 

completing the work; 

(iii) The amount of liquidated 

damages to be charged; 

(iv) The amount, method, and 

frequency of payment; 

(v) Whether or not surety bonds will 

be provided. If not, a latent defects bond 

may be required, as described in 

paragraph (e)(4) of this section; 

(vi) The requirement that changes or 

additions must have prior written 

approval of the Agency; and 

(vii) The warranty period to be 

provided in accordance with 

Appendices A and B, sections 1 through 

10, paragraph (i)(1) and in Appendices 

C and D, paragraph (i)(1). 

(4) Surety. Surety per 7 CFR part 

1780, subpart C, § 1780.75(c) of this title 

will be required, and made a part of the 

contract, if the applicant requests it, or 

if the contractor requests partial 

payments for construction work. If the 

contractor will receive a lump sum 

payment at the end of work, the Agency 

will not require surety. In such cases 

where no surety is provided and the 

project involves pre-commercial 

technology, first of its type in the U.S., 

or new designs without sufficient 

operating hours to prove their merit, a 

latent defects bond may be required to 

cover the work. 

(5) Equal opportunity. Section 

1901.205 of 7 CFR part 1901, subpart E 

of this title applies to all financial 

assistance involving construction 

contracts and subcontracts in excess of 

$10,000. Language for this requirement 

is included in Form RD 1924–6. If this 

form is not used, such language must be 

made a part of the Agency approved 

contract. 

(6) Obtaining bids and selecting a 

contractor. 

(i) The applicant may select a 

contractor and negotiate a contract or 

contact several contractors and request 

each to submit a bid. The applicant will 

provide a statement to the Agency 

describing the process for obtaining the 

bid(s) and what alternatives were 

considered. 

(ii) When a price has already been 

negotiated by an applicant and a 

contractor, the Agency will review the 

proposed contract. If the contractor is 

qualified to perform the development 

and provide a warranty of the work and 

the price compares favorably with the 

cost of similar construction in the area, 

further negotiation is unnecessary. If the 

Agency determines the price is too high 

or otherwise unreasonable, the 

applicant will be required to negotiate 

further with the contractor. If a 

reasonable price cannot be negotiated or 

if the contractor is not qualified, the 

applicant will be required to negotiate 

with another contractor. 

(iii) When an applicant has proposed 

development with no contractor in 

mind, competition will be required. The 

applicant must obtain bids from as 

many qualified contractors, dealers, or 

trades people as feasible depending on 

the method and type of construction. 

(iv) If the award of the contract is by 

competitive bidding, Form RD 1924–5, 

‘‘Invitation for Bid (Construction 

Contract),’’ or another similar Agency 

approved invitation bid form containing 

the requirements of subpart E of part 

1901 of this title may be used. All 

contractors from whom bids are 

requested should be informed of all 

conditions of the contract, including the 

time and place of opening bids. 

Conditions shall not be established 

which would give preference to a 

specific bidder or type of bidder. When 

applicable, copies of Forms RD 1924–6 

and RD 400–6, ‘‘Compliance Statement,’’ 

also should be provided to the 

prospective bidders. 

(7) Awarding the contract. The 

applicant, with the concurrence of the 

Agency, will consider the amount of the 

bids or proposals, and all conditions 

listed in the invitation. On the basis of 

these considerations, the applicant will 

select and notify the lowest responsible 

bidder. The contract will be awarded 

using Form RD 1924–6 or similar 

Agency approved document as 

described in this section. 

(8) Final payments. Prior to making 

final payment on the contract when a 

surety bond is not used, the Agency will 

be provided with Form RD 1924–9, 

‘‘Certificate of Contractor’s Release,’’ and 

Form RD 1924–10, ‘‘Release by 

Claimants,’’ executed by all persons who 

furnished materials or labor in 

connection with the contract. The 

applicant should furnish the contractor 

with a copy of Form RD 1924–10 at the 

beginning of the work in order that the 

contractor may obtain these releases as 

the work progresses. 

(f) Design/build contracts. The design/ 

build method, where the same person or 

entity provides design and engineering 

work, as well as construction or 

installation, may be used with Agency 

written approval. If the design/build 

contract amount is $200,000 or less, 

development and contracting will 

follow paragraph (e) of this section. If 

the design/build contract amount is 

greater than $200,000, Agency prior 

concurrence must be obtained as 

described below, and the remaining 

requirements of this section apply. 

(1) Concurrence information. The 

applicant will request Agency 

concurrence by providing the Agency at 

least the information specified in 

paragraphs (f)(1)(i) through (f)(1)(viii) of 

this section. 

(i) The owner’s written request to use 

the design/build method with a 

description of the proposed method. 

(ii) A proposed scope of work 

describing in clear, concise terms the 

technical requirements for the contract. 

It should include a nontechnical 

statement summarizing the work to be 

performed by the contractor and the 

results expected, and a proposed 

construction schedule showing the 

sequence in which the work is to be 

performed. 

(iii) A proposed firm-fixed-price 

contract for the entire project which 

provides that the contractor shall be 

responsible for any extra cost which 

may result from errors or omissions in 

the services provided under the 

contract, as well as compliance with all 


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Federal, State, and local requirements 

effective on the contract execution date. 

(iv) Where noncompetitive 

negotiation is proposed, an evaluation 

of the contractor’s performance on 

previous similar projects in which the 

contractor acted in a similar capacity. 

(v) A detailed listing and cost estimate 

of equipment and supplies not included 

in the construction contract but which 

are necessary to properly operate the 

facility. 

(vi) Evidence that a qualified 

construction inspector who is 

independent of the contractor has or 

will be hired. 

(vii) Preliminary plans and outline 

specifications. However, final plans and 

specifications must be completed and 

reviewed by the Agency prior to the 

start of construction. 

(viii) The owner’s attorney’s opinion 

and comments regarding the legal 

adequacy of the proposed contract 

documents and evidence that the owner 

has the legal authority to enter into and 

fulfill the contract. 

(2) Agency concurrence of design/ 

build method. The Agency shall review 

the material submitted by the applicant. 

When all items are acceptable, the loan 

approval official will concur in the use 

of the design/build method for the 

proposal. 

(3) Forms used. American Institute of 

Architects (AIA) contract forms between 

the owner and design-builder that are 

approved by the Agency should be used. 

Other Agency approved contract 

documents may be used provided they 

are customarily used in the area and 

protect the interest of the applicant and 

the Agency with respect to compliance 

with items such as the drawings, 

specifications, payments for work, 

inspections, completion, 

nondiscrimination in construction 

work, and acceptance of the work. The 

Agency will not become a party to a 

construction contract or incur any 

liability under it. No contract shall 

become effective until concurred in 

writing by the Agency. Such 

concurrence statement shall be attached 

to and made a part of the contract. 

(4) Contract provisions. Contracts will 

have a listing of attachments and shall 

meet the following requirements: 

(i) The contract sum; 

(ii) The dates for starting and 

completing the work; 

(iii) The amount of liquidated 

damages, if any, to be charged; 

(iv) The amount, method, and 

frequency of payment; 

(v) Surety provisions that meet the 

requirements of § 1780.75(c) of this title; 

(vi) The requirement that changes or 

additions must have prior written 

approval of the Agency; 

(vii) The warranty period to be 

provided in accordance with 

Appendices A and B, sections 1 through 

10, paragraph (i) and Appendices C and 

D, paragraph (i); 

(viii) Contract review and 

concurrence in accordance with 

§ 1780.61(b) of this title; 

(ix) Owner’s contractual 

responsibility in accordance with 

§ 1780.68 of this title; and 

(x) Further contract provisions 

concerning remedies, termination, 

surety, equal employment opportunity, 

anti-kickback, records, State energy 

conservation plan, change orders, 

Agency concurrence, retainage, and 

other compliance requirements must be 

met in accordance with 7 CFR part 

1780, subpart C, § 1780.75 of this title. 

(5) Obtaining bids and selecting a 

contractor. The applicant may select a 

contractor based on competitive sealed 

bids, competitive negotiation, or 

noncompetitive negotiation as described 

in § 1780.72(b), (c), or (d) of this title. 

(g) Contract method. If the contract 

amount is greater than $200,000 and is 

not of the design/build method, the 

following conditions must be met: 

(1) Procurement method. Procurement 

method shall comply with the 

requirements of §§ 1780.72, 1780.75, 

and 1780.76 of this title. 

(2) Forms used. The AIA Form A101, 

‘‘Standard Form of Agreement Between 

Owner and Contractor,’’ or Engineering 

Joint Counsel Document Committee 

(EJCDC) Form C–521, ‘‘Suggested Form 

of Agreement Between Owner and 

Contractor (Stipulated Price) Funding 

Agency Edition,’’ should be used. Other 

Agency approved contract documents 

may be used provided they are 

customarily used in the area and protect 

the interest of the applicant and the 

Agency with respect to compliance with 

items such as the drawings, 

specifications, payments for work, 

inspections, completion, 

nondiscrimination in construction 

work, and acceptance of the work. The 

Agency will not become a party to a 

construction contract or incur any 

liability under it. No contract shall 

become effective until concurred in 

writing by the Agency. Such 

concurrence statement shall be attached 

to and made a part of the contract. 

(3) Contract provisions. Contracts will 

have a listing of attachments and shall 

meet the requirements of § 1780.75 of 

this title and the following 

requirements: 

(i) The contract sum; 

(ii) The dates for starting and 

completing the work; 

(iii) The amount of liquidated 

damages, if any, to be charged; 

(iv) The amount, method, and 

frequency of payment; 

(v) Surety provisions that meet the 

requirements of § 1780.75(c) of this title; 

(vi) The requirement that changes or 

additions must have prior written 

approval of the Agency; 

(vii) The warranty period to be 

provided in accordance with 

Appendices A and B, sections 1 through 

10, paragraph (i) and with Appendices 

C and D, paragraph (i); 

(viii) Contract review and 

concurrence in accordance with 

§ 1780.61(b) of this title; 

(ix) Owner’s contractual 

responsibility in accordance with 

§ 1780.68 of this title; and 

(x) Further contract provisions 

concerning remedies, termination, 

surety, equal employment opportunity, 

anti-kickback, records, State energy 

conservation plan, change orders, 

Agency concurrence, retainage, and 

other compliance requirements must be 

met in accordance with § 1780.75 of this 

title. 

(4) Obtaining bids and selecting a 

contractor. The applicant may select a 

contractor based on competitive sealed 

bids, competitive negotiation, or 

noncompetitive negotiation as described 

in § 1780.72(b), (c), or (d) of this title. 

(5) Contract award. Applicants 

awarding contracts must comply with 

§ 1780.70(h) of this title. 

(6) Contracts awarded prior to 

applications. Applicants awarding 

contracts prior to filing an application 

must comply with § 1780.74 of this title. 

(7) Contract administration. Contract 

administration must comply with 

§ 1780.76 of this title. If another 

authority, such as a Federal or State 

agency, is providing funding and 

requires oversight of inspections, 

change orders, and pay requests, the 

Agency may accept copies of their 

reports or forms as meeting oversight 

requirements of the Agency. 

§ 4280.120 RES and EEI grantee 

requirements. 

(a) A Letter of Conditions will be 

prepared by the Agency, establishing 

conditions that must be understood and 

agreed to by the applicant before any 

obligation of funds can occur. The 

applicant must sign Form RD 1942–46, 

‘‘Letter of Intent to Meet Conditions’’ 

and Form RD 1940–1, ‘‘Request for 

Obligation of Funds,’’ if they accept the 

conditions of the grant. 

(b) The applicant must complete, sign, 

and return the Form RD 4280–2. The 


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grantee must abide by all requirements 

contained in Form RD 4280–2, this 

subpart, and any other applicable 

Federal statutes or regulations. Failure 

to follow these requirements may result 

in termination of the grant and adoption 

of other available remedies. 

(c) Where applicable, the grantee shall 

provide to the Agency a copy of the 

executed power purchase agreement 

within 12 months from the date that the 

grant agreement is executed, unless 

otherwise approved by the Agency. 

§ 4280.121 Servicing grants. 

(a) General. RES and EEI grants will 

be serviced in accordance with the 

Departmental Regulations, 7 CFR part 

1951, subparts E and O of this title, and 

Form RD 4280–2. 

(b) Change of contractor or vendor. 

After an award has been made, the 

recipient of the award can request to 

change a contractor or vendor if the 

technical merit score for the project 

remains the same or is higher. Prior to 

changing a contractor or vendor, the 

recipient must submit to the Agency a 

written request providing information 

that allows the Agency to re-score the 

project’s technical merit. If the Agency 

determines that the project achieves the 

same or higher technical merit score, the 

recipient may make the change. No 

additional funding will be available 

from the Agency if costs for the project 

have increased. If the Agency 

determines that the project does not 

achieve the same or higher technical 

merit score, the change will not be 

approved. 

Renewable Energy System and Energy 

Efficiency Improvement Guaranteed 

Loans 

§ 4280.122 Borrower eligibility. 

To receive a RES or EEI guaranteed 

loan under this subpart, a borrower 

must meet the criteria specified in 

§§ 4280.109 and 4280.112. 

§ 4280.123 Project eligibility. 

For a RES or EEI project to be eligible 

to receive a guaranteed loan under this 

subpart, the project must meet each of 

the criteria, as applicable, specified in 

§ 4280.113(a) through (j). In addition, 

guaranteed loan funds may be used for 

necessary capital improvements to an 

existing renewable energy system. 

§ 4280.124 Guaranteed loan funding. 

(a) The amount of the loan that will 

be made available to an eligible project 

under this subpart will not exceed 75 

percent of total eligible project costs. 

Eligible project costs are specified in 

paragraph (e) of this section. 

(b) The minimum amount of a 

guaranteed loan made to a borrower will 

be $5,000, less any program grant 

amounts. The maximum amount of a 

guaranteed loan made to a borrower is 

$25 million. 

(c) The percentage of guarantee, up to 

the maximum allowed by this section, 

will be negotiated between the lender 

and the Agency. The maximum 

percentage of guarantee is 85 percent for 

loans of $600,000 or less; 80 percent for 

loans greater than $600,000 up to and 

including $5 million; 70 percent for 

loans greater than $5 million up to and 

including $10 million; and 60 percent 

for loans greater than $10 million. 

(d) The total amount of the loans 

guaranteed by the Agency under this 

program to one borrower, including the 

outstanding principal and interest 

balance of any existing loans guaranteed 

by the Agency under this program, and 

new loan request, must not exceed $25 

million. 

(e) Eligible project costs are only those 

costs associated with the items 

identified in paragraphs (e)(1) through 

(e)(12) of this section, as long as the 

items are an integral and necessary part 

of the renewable energy system or 

energy efficiency improvement. 

(1) Post-application purchase and 

installation of equipment (new, 

refurbished, or remanufactured), except 

agricultural tillage equipment, used 

equipment, and vehicles. 

(2) Post-application construction or 

improvements, except residential. 

(3) Energy audits or assessments. 

(4) Permit and license fees. 

(5) Professional service fees, except 

for application preparation. 

(6) Feasibility studies and technical 

reports. 

(7) Business plans. 

(8) Retrofitting. 

(9) Construction of a new energy 

efficient facility only when the facility 

is used for the same purpose, is 

approximately the same size, and, based 

on the energy assessment or audit, will 

provide more energy savings than 

improving an existing facility. Only 

costs identified in the energy 

assessment or audit for energy efficiency 

improvements are allowed. 

(10) Energy efficiency improvements 

are limited to only improvements 

identified in the energy assessment or 

audit. Equipment identified by the audit 

to be replaced shall be replaced with 

equipment similar in capacity. If the 

energy efficiency improvement has a 

greater capacity than the existing 

equipment, the Agency will pro-rate the 

energy efficiency improvement’s total 

eligible project costs based on the 

capacity of the existing equipment. A 

calculation shall be performed by 

dividing the capacity of the existing 

equipment by the capacity of the 

proposed equipment to determine the 

percentage of the energy efficiency 

improvement’s eligible project costs that 

the Agency will use in determining the 

maximum guaranteed loan assistance 

under this subpart (see example). 

Example. A business plans to build a 

new production line with a capacity of 

625 units per hour to replace an existing 

production line that produces 500 units 

per hour. The total project costs of the 

new production line is $20,000, of 

which $15,000 would otherwise qualify 

as eligible project costs. However, 

because the new production line has a 

greater production capacity than the 

existing line (625 units per hour versus 

500 units per hour), only a portion of 

the $15,000 otherwise eligible project 

costs would be used in determining 

total eligible project cost and the 

maximum guaranteed loan assistance 

available. In this example, because the 

original capacity (500 units per hour) is 

80 percent of the new capacity (625 

units per hour), only 80 percent of the 

$15,000 of otherwise eligible project 

costs associated with the new 

production line (i.e., $12,000) will be 

considered as total eligible project cost 

to be financed under this subpart. The 

maximum guaranteed loan award in this 

example would be $9,000, which is 

equal to $12,000 x 75 percent. 

(11) Working capital. 

(12) Land acquisition. 

(f) In determining the amount of a 

loan awarded, the Agency will take into 

consideration the following six criteria: 

(1) The type of renewable energy 

system to be purchased; 

(2) The estimated quantity of energy 

to be generated by the renewable energy 

system; 

(3) The expected environmental 

benefits of the renewable energy system; 

(4) The quantity of energy savings 

expected to be derived from the activity, 

as demonstrated by an energy audit; 

(5) The estimated period of time it 

would take for the energy savings 

generated by the activity to equal the 

cost of the activity; and 

(6) The expected energy efficiency of 

the renewable energy system. 

§ 4280.125 Interest rates. 

(a) The interest rate for the guaranteed 

loan will be negotiated between the 

lender and the applicant and may be 

either fixed or variable as long as it is 

a legal rate. The variable rate must be 

based on published indices, such as 

money market indices. In no case, 

however, shall the rate be more than the 

rate customarily charged borrowers in 


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similar circumstances in the ordinary 

course of business. The interest rate 

charged is subject to Agency review and 

approval. 

(b) Comply with § 4279.125(a), (b), 

and (d) of this chapter. 

§ 4280.126 Terms of loan. 

(a) The repayment term for a loan for: 

(1) Real estate must not exceed 30 

years; 

(2) Machinery and equipment must 

not exceed 20 years, or the useful life, 

including major rebuilds and 

component replacement, whichever is 

less; 

(3) Combined loans on real estate and 

equipment must not exceed 30 years; 

and 

(4) Working capital loans must not 

exceed 7 years. 

(b) The first installment of principal 

and interest will, if possible, be 

scheduled for payment after the project 

is operational and has begun to generate 

income. 

(c) Payment terms must comply with 

§ 4279.126(c) of this chapter. 

(d) The maturity of a loan will be 

based on the use of proceeds, the useful 

life of the assets being financed, and the 

borrower’s ability to repay. 

(e) All loans guaranteed through this 

program must be sound, with 

reasonably assured repayment. 

(f) Guarantees must be provided only 

after consideration is given to the 

borrower’s overall credit quality and to 

the terms and conditions of renewable 

energy and energy efficiency subsidies, 

tax credits, and other such incentives. 

(g) A principal plus interest 

repayment schedule is permissible. 

§ 4280.127 Guarantee/annual renewal fee 

percentages. 

(a) Fee ceilings. The maximum 

guarantee fee that may be charged is 1 

percent. The maximum annual renewal 

fee that may be charged is 0.5 percent. 

The Agency will establish each year the 

guarantee fee and annual renewal fee 

and a notice will be published annually 

in the Federal Register. 

(b) Guarantee fee. The guarantee fee 

will be paid to the Agency by the lender 

and is nonrefundable. The guarantee fee 

may be passed on to the borrower. The 

guarantee fee must be paid at the time 

the Loan Note Guarantee is issued. 

(c) Annual renewal fee. The annual 

renewal fee will be calculated on the 

unpaid principal balance as of close of 

business on December 31 of each year. 

It will be calculated by multiplying the 

outstanding principal balance times the 

percent of guarantee times the annual 

renewal fee. The fee will be billed to the 

lender in accordance with the Federal 

Register publication. The annual 

renewal fee may not be passed on to the 

borrower. 

§ 4280.128 Application and 

documentation. 

The requirements in this section 

apply to guaranteed loan applications 

for RES and EEI projects under this 

subpart. 

(a) General. Applications must be 

submitted in accordance with the 

requirements specified in § 4280.116(a). 

(b) Application content for 

guaranteed loans greater than $600,000. 

Applications and documentation for 

guaranteed loans greater than $600,000 

must provide the required information 

organized pursuant to a Table of 

Contents in a chapter format presented 

in the order shown in paragraphs (b)(1) 

and (b)(2) of this section. 

(1) Guaranteed loan application 

content. 

(i) Table of contents. Include page 

numbers for each component of the 

application in the table of contents. 

Begin pagination immediately following 

the Table of Contents. 

(ii) Project summary. Provide a 

concise summary of the proposed 

project and applicant information, 

project purpose and need, and project 

goals, including the following: 

(A) Title. Provide a descriptive title of 

the project. 

(B) Borrower eligibility. Describe how 

each of the criteria identified in 

§§ 4280.109 and 4280.112 is met. 

(C) Project eligibility. Describe how 

each of the criteria, as applicable, in 

§ 4280.113(a) through (j) is met. Clearly 

state whether the application is for the 

purchase of a renewable energy system 

(including making necessary capital 

improvements to an existing renewable 

energy system) or to make energy 

efficiency improvements. The response 

to § 4280.113(a) must include a brief 

description of the system or 

improvement. This description is to 

provide the reader with a frame of 

reference for reviewing the rest of the 

application. Additional project 

description information will be needed 

later in the application. 

(D) Operation description. Describe 

the applicant’s total farm/ranch/ 

business operation and the relationship 

of the proposed project to the 

applicant’s total farm/ranch/business 

operation as specified in 

§ 4280.116(b)(3)(iv). 

(iii) Financial information for gross 

income or size determination. Provide 

financial information to allow the 

Agency to determine the agricultural 

producer’s percent of gross income 

derived from agricultural operations or 

the rural small business’ size, as 

applicable, as specified in 

§ 4280.116(b)(3)(v). 

(iv) Matching funds. Submit a 

spreadsheet identifying sources, 

amounts, and status of matching funds 

as specified in § 4280.116(b)(5). 

(v) Self-evaluation score. Self-score 

the project using the evaluation criteria 

in § 4280.117(c) as specified in 

§ 4280.116(b)(6). 

(vi) Renewable energy and energy 

efficiency technical report. For both 

renewable energy system projects and 

energy efficiency improvement projects, 

submit a Technical Report in 

accordance with applicable provisions 

of Appendix B, C, or D, as applicable, 

of this subpart and as specified in 

§ 4280.116(b)(7)(ii). For loan requests in 

excess of $600,000, the services of a 

licensed PE or a team of licensed PE’s 

is required. If none of the Technical 

Reports in Appendices B, C, and D 

apply to the proposed technology, the 

applicant may submit a Technical 

Report that conforms to the overall 

outline and subjects specified in 

applicable provisions of 

§ 4280.116(b)(7)(ii)(A) through (G). 

(vii) Business-level feasibility study 

for renewable energy systems. For each 

application for a renewable energy 

system project submitted by a start-up 

or existing business, a business-level 

feasibility study by an independent 

qualified consultant will be required by 

the Agency. An acceptable businesslevel feasibility study must conform to 

the requirements of an acceptable 

feasibility study as specified in 

Appendix E of this subpart. 

(2) Lender forms, certifications, and 

agreements. Each application submitted 

under paragraph (b)(1) of this section 

must contain applicable items described 

in paragraphs (b)(2)(i) through (b)(2)(xi) 

of this section. 

(i) A completed Form RD 4279–1, 

‘‘Application for Loan Guarantee.’’ 

(ii) Form RD 1940–20. 

(iii) A personal credit report from an 

Agency approved credit reporting 

company for each owner, partner, 

officer, director, key employee, and 

stockholder owning 20 percent or more 

interest in the borrower’s business, 

except passive investors and those 

corporations listed on a major stock 

exchange. 

(iv) Appraisals completed in 

accordance with § 4280.141. Completed 

appraisals should be submitted when 

the application is filed. If the appraisal 

has not been completed when the 

application is filed, the applicant must 

submit an estimated appraisal. In all 

cases, a completed appraisal must be 

submitted prior to the loan being closed. 


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(v) Commercial credit reports 

obtained by the lender on the borrower 

and any parent, affiliate, and subsidiary 

firms. 

(vi) Current personal and corporate 

financial statements of any guarantors. 

(vii) Financial statements as specified 

in § 4280.116(b)(4)(i) through (iii). 

Financial information is required on the 

total operation of the agricultural 

producer/rural small business and its 

parent, subsidiary, or affiliates at other 

locations. All information submitted 

under this paragraph must be 

substantiated by authoritative records. 

(viii) Business-level feasibility study. 

(ix) Lender’s complete comprehensive 

written analysis in accordance with 

§ 4280.139. 

(x) A certification by the lender that 

it has completed a comprehensive 

written analysis of the proposal, the 

borrower is eligible, the loan is for 

authorized purposes with technical 

merit, and there is reasonable assurance 

of repayment ability based on the 

borrower’s history, projections, equity, 

and the collateral to be obtained. 

(xi) A proposed loan agreement or a 

sample loan agreement with an attached 

list of the proposed loan agreement 

provisions. The following requirements 

must be addressed in the proposed or 

sample loan agreement: 

(A) Prohibition against assuming 

liabilities or obligations of others; 

(B) Restriction on dividend payments; 

(C) Limitation on the purchase or sale 

of equipment and fixed assets; 

(D) Limitation on compensation of 

officers and owners; 

(E) Minimum working capital or 

current ratio requirement; 

(F) Maximum debt-to-net worth ratio; 

(G) Restrictions concerning 

consolidations, mergers, or other 

circumstances; 

(H) Limitations on selling the 

business without the concurrence of the 

lender; 

(I) Repayment and amortization of the 

loan; 

(J) List of collateral and lien priority 

for the loan, including a list of persons 

and corporations guaranteeing the loan 

with a schedule for providing the lender 

with personal and corporate financial 

statements. Financial statements for 

corporate and personal guarantors must 

be updated at least annually once the 

guarantee is provided; 

(K) Type and frequency of financial 

statements to be required from the 

borrower for the duration of the loan; 

(L) The addition of any requirements 

imposed by the Agency in Form RD 

4279–3; 

(M) A reserved section for any Agency 

environmental requirements; and 

(N) A provision for the lender or the 

Agency to have reasonable access to the 

project and its performance information 

during its useful life or the term of the 

loan, whichever is longer, including the 

periodic inspection of the project by a 

representative of the lender or the 

Agency. 

(c) Application content for guaranteed 

loans of $600,000 or less. Applications 

and documentation for guaranteed loans 

$600,000 or less must comply with 

paragraphs (c)(1) and (c)(2) of this 

section. 

(1) Application Contents. 

Applications and documentation for 

guaranteed loans $600,000 or less must 

provide the required information 

organized pursuant to a Table of 

Contents in a chapter format presented 

in the order shown in § 4280.116(b)(2) 

through (8), except as specified in 

paragraphs (c)(1)(i) through (c)(1)(iii) of 

this section. 

(i) Section 4280.116(b)(7)(i) does not 

apply. 

(ii) Technical Reports must be 

submitted according to paragraph 

(c)(1)(ii)(A) or (B) of this section, as 

applicable. 

(A) For renewable energy system 

projects and energy efficiency 

improvement projects utilizing 

commercially available systems or 

improvements and with total eligible 

project costs of $200,000 or less, submit 

a Technical Report as described in 

Appendix A, C, or D, as applicable, of 

this subpart. If a renewable energy 

project does not fit one of the 

technologies identified in Appendices 

A, C, and D, the applicant must submit 

a Technical Report that conforms to the 

overall outline and subjects specified in 

§ 4280.116(b)(7)(ii)(G). 

(B) For renewable energy projects and 

energy efficiency projects utilizing precommercial technology or with total 

eligible project costs greater than 

$200,000, submit a Technical Report as 

described in Appendix B, C, or D, as 

applicable, of this subpart and as 

specified in § 4280.116(b)(7)(ii)(G)(1) 

through (10), as applicable. 

(iii) Business-level feasibility study for 

renewable energy systems. For each 

application for a renewable energy 

system project submitted by a start-up 

or existing business, a business-level 

feasibility study by an independent 

qualified consultant will be required by 

the Agency. An acceptable businesslevel feasibility study must conform to 

the requirements of an acceptable 

feasibility study as specified in 

Appendix E of this subpart. Renewable 

energy projects with total eligible 

project costs of $200,000 or less are 

exempt from the feasibility study 

requirement. 

(2) Lender forms, certifications, and 

agreements. Applications submitted 

under paragraph (c) of this section must 

use Form RD 4279–1A, ‘‘Application for 

Loan Guarantee, Short Form,’’ and 

include the documentation contained in 

paragraphs (b)(2)(ii), (b)(2)(vii), 

(b)(2)(viii), (b)(2)(ix), and (b)(2)(xi) of 

this section. The lender must have the 

documentation contained in paragraphs 

(b)(2)(iii), (b)(2)(iv), (b)(2)(v), (b)(2)(vi), 

and (b)(2)(x) available in its files for the 

Agency’s review. 

§ 4280.129 Evaluation of RES and EEI 

guaranteed loan applications. 

(a) General review. The Agency will 

evaluate each application and make a 

determination as to whether the 

borrower and project are eligible, the 

project has technical merit, there is 

reasonable assurance of repayment, 

there is sufficient collateral and equity, 

and the proposed loan complies with all 

applicable statutes and regulations. If 

the Agency determines it is unable to 

guarantee the loan, the lender will be 

informed in writing. Such notification 

will include the reasons for denial of the 

guarantee. 

(b) Technical merit determination. 

The Agency’s determination of a 

project’s technical merit will be based 

on the information provided by the 

applicant. The Agency may engage the 

services of other government agencies or 

recognized industry experts in the 

applicable technology field, at its 

discretion, to evaluate and rate the 

application. The Agency may use this 

evaluation and rating to determine the 

level of technical merit of the proposed 

project. Projects determined by the 

Agency to be without technical merit 

shall be deemed ineligible. 

(c) Evaluation criteria. The Agency 

will score each application based on the 

evaluation criteria specified in 

§ 4280.117(c) (except for the criteria 

specified in § 4280.117(c)(5)) and in 

paragraphs (c)(1) and (c)(2) of this 

section. Points will be awarded for 

either paragraph (c)(1) or (c)(2) of this 

section, but not both. 

(1) If the interest rate on the loan is 

to be below the prime rate (as published 

in The Wall Street Journal) plus 1.5 

percent, 5 points will be awarded. 

(2) If the interest rate on the loan is 

to be below the prime rate (as published 

in The Wall Street Journal) plus 1 

percent, 10 points will be awarded. 

§ 4280.130 Eligible lenders. 

Eligible lenders are those identified in 

§ 4279.29 of this chapter, excluding 


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mortgage companies that are part of a 

bank-holding company. 

§ 4280.131 Lender’s functions and 

responsibilities. 

(a) General. Lenders are responsible 

for implementing the guaranteed loan 

program under this subpart. All lenders 

requesting or obtaining a loan guarantee 

must comply with § 4279.30(a)(1)(i) 

through (ix) of this chapter. 

(b) Credit evaluation. The lender’s 

credit evaluation must comply with 

§ 4279.30(b) of this chapter. 

(c) Environmental information. 

Lenders must ensure that borrowers 

furnish all environmental information 

required under 7 CFR part 1940, subpart 

G, and must comply with § 4279.30(c) of 

this chapter. 

(d) Construction planning and 

performing development. The lender 

must comply with § 4279.156(a) and (b) 

of this chapter, except under 

§ 4279.156(a) of this chapter, the lender 

must also ensure that all project 

facilities are designed utilizing accepted 

architectural and engineering practices 

that conform to the requirements of this 

subpart. 

(e) Loan closing. The loan closing 

must be in compliance with 

§ 4279.30(d) of this chapter. 

§ 4280.132 Access to records. 

Both the lender and borrower must 

permit representatives of the Agency (or 

other agencies of the U.S.) to inspect 

and make copies of any records 

pertaining to any Agency guaranteed 

loan during regular office hours of the 

lender or borrower or at any other time 

upon agreement between the lender, the 

borrower, and the Agency, as 

appropriate. 

§ 4280.133 Conditions of guarantee. 

All loan guarantees will be subject to 

§ 4279.72 of this chapter. 

§ 4280.134 Sale or assignment of 

guaranteed loan. 

Any sale or assignment of the 

guaranteed loan must be in accordance 

with § 4279.75 of this chapter. 

§ 4280.135 Participation. 

All participation must be in 

accordance with § 4279.76 of this 

chapter. 

§ 4280.136 Minimum retention. 

Minimum retention must be in 

accordance with § 4279.77 of this 

chapter. 

§ 4280.137 Repurchase from holder. 

Any repurchase from a holder must be 

in accordance with § 4279.78 of this 

chapter. 

§ 4280.138 Replacement of document. 

Documents must be replaced in 

accordance with § 4279.84 of this 

chapter, except, in § 4279.84(b)(1)(v), a 

full statement of the circumstances of 

any defacement or mutilation of the 

Loan Note Guarantee or Assignment 

Guarantee Agreement would also need 

to be provided. 

§ 4280.139 Credit quality. 

The lender must determine credit 

quality and must address all of the 

elements of credit quality in a written 

credit analysis, including adequacy of 

equity, cash flow, collateral, history, 

management, and the current status of 

the industry for which credit is to be 

extended. 

(a) Cash flow. All efforts will be made 

to structure debt so that the business has 

adequate debt coverage and the ability 

to accommodate expansion. 

(b) Collateral. Collateral must have 

documented value sufficient to protect 

the interest of the lender and the 

Agency. The discounted collateral value 

will normally be at least equal to the 

loan amount. Lenders will discount 

collateral consistent with sound loan-tovalue policy. Guaranteed loans made 

under this subpart shall have at least 

parity position with guaranteed loans 

made under 7 CFR part 4279, subpart B 

of this title. 

(c) Industry. The current status of the 

industry will be considered. Borrowers 

developing well established 

commercially available renewable 

energy systems with significant support 

infrastructure may be considered for 

better terms and conditions than those 

borrowers developing systems with 

limited infrastructure. 

(d) Equity. In determining the 

adequacy of equity, the lender must 

meet the criteria specified in paragraph 

(d)(1) of this section for loans over 

$600,000 and the criteria in paragraph 

(d)(2) of this section for loans of 

$600,000 or less. Cash equity injection, 

as discussed in paragraphs (d)(1) and 

(d)(2) of this section, must be in the 

form of cash. Federal grant funds may 

be counted as cash equity. 

(1) For loans over $600,000, borrowers 

shall demonstrate evidence of cash 

equity injection in the project of not less 

than 25 percent of eligible project costs. 

The fair market value of equity in real 

property that is to be pledged as 

collateral for the loan may be 

substituted in whole or in part to meet 

the cash equity requirement. However, 

the appraisal completed to establish the 

fair market value of the real property 

must not be more than 1 year old and 

must meet Agency appraisal standards. 

(2) For loans of $600,000 or less, 

borrowers shall demonstrate evidence of 

cash equity injection in the project of 

not less than 15 percent of eligible 

project costs. The fair market value of 

equity in real property that is to be 

pledged as collateral for the loan may be 

substituted in whole or in part to meet 

the cash equity requirement. However, 

the appraisal completed to establish the 

fair market value of the real property 

must not be more than 1 year old and 

must meet Agency appraisal standards. 

(e) Lien priorities. The entire loan will 

be secured by the same security with 

equal lien priority for the guaranteed 

and unguaranteed portions of the loan. 

The unguaranteed portion of the loan 

will neither be paid first nor given any 

preference or priority over the 

guaranteed portion. A parity or junior 

position may be considered provided 

that discounted collateral values are 

adequate to secure the loan in 

accordance with paragraph (b) of this 

section after considering prior liens. 

§ 4280.140 Financial statements. 

(a) The financial information required 

in § 4280.116(b)(3)(v) and (b)(4) is 

required for the guaranteed loan 

program. 

(b) If the proposed guaranteed loan 

exceeds $3 million, the Agency may 

require annual audited financial 

statements, at its sole discretion when 

the Agency is concerned about the 

applicant’s credit risk. 

§ 4280.141 Appraisals. 

(a) Conduct of appraisals. All 

appraisals must be in accordance with 

§ 4279.144 of this chapter. 

(1) For loans of $600,000 or more, a 

complete self-contained appraisal must 

be conducted. Lenders must complete at 

least a Transaction Screen 

Questionnaire for any undeveloped sites 

and a Phase I environmental site 

assessment on existing business sites, 

which should be provided to the 

appraiser for completion of the selfcontained appraisal. 

(2) For loans for less than $600,000, 

a complete summary appraisal may be 

conducted in lieu of a complete selfcontained appraisal as required under 

paragraph (a)(1) of this section. 

Summary appraisals must be conducted 

in accordance with Uniform Standards 

of Professional Appraisal Practice 

(USPAP). 

(b) Specialized appraisers. 

Specialized appraisers will be required 

to complete appraisals in accordance 

with paragraphs (a)(1) and (a)(2) of this 

section. The Agency may approve a 

waiver of this requirement only if a 

specialized appraiser does not exist in a 


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specific industry or hiring one would 

cause an undue financial burden to the 

borrower. 

§ 4280.142 Personal and corporate 

guarantees. 

(a) All personal and corporate 

guarantees must be in accordance with 

§ 4279.149(a) of this chapter. 

(b) Except for passive investors, 

unconditional personal and corporate 

guarantees for those owners with a 

beneficial interest at least 20 percent of 

the borrower will be required where 

legally permissible. 

§ 4280.143 Loan approval and obligation 

of funds. 

The lender and applicant must 

comply with § 4279.173 of this chapter, 

except that either or both parties may 

also propose alternate conditions to the 

Conditional Commitment if certain 

conditions cannot be met. 

§ 4280.144 Transfer of lenders. 

All transfers of lenders must be in 

accordance with § 4279.174 of this 

chapter, except that it will be the 

Agency rather than the loan approval 

official who may approve the 

substitution of a new eligible lender. 

§ 4280.145 Changes in borrower. 

All changes in borrowers must be in 

accordance with § 4279.180 of this 

chapter, but the eligibility requirements 

of this program apply. 

§ 4280.146 Conditions precedent to 

issuance of Loan Note Guarantee. 

(a) The Loan Note Guarantee will not 

be issued until the lender certifies to the 

conditions identified in paragraphs 

§ 4279.181(a) through (o) of this chapter 

and paragraphs (b) and (c) of this 

section. 

(b) All planned property acquisitions 

and development have been performing 

at a steady state operating level in 

accordance with the technical 

requirements, plans, and specifications, 

conforms with applicable Federal, State, 

and local codes, and costs have not 

exceeded the amount approved by the 

lender and the Agency. 

(c) Where applicable, the lender shall 

provide to the Agency a copy of the 

executed power purchase agreement. 

§ 4280.147 Issuance of the guarantee. 

(a) When loan closing plans are 

established, the lender must notify the 

Agency in writing. At the same time, or 

immediately after loan closing, the 

lender must provide the following to the 

Agency: 

(1) Lender’s certifications as required 

by § 4280.146; 

(2) An executed Form RD 4279–4; and 

(3) An executed Form RD 1980–19, 

‘‘Guaranteed Loan Closing Report,’’ and 

appropriate guarantee fee. 

(b) When the Agency is satisfied that 

all conditions for the guarantee have 

been met, the Loan Note Guarantee and 

the following documents, as 

appropriate, will be issued: 

(1) Assignment Guarantee Agreement. 

If the lender assigns the guaranteed 

portion of the loan to a holder, the 

lender, holder, and the Agency must 

execute the Assignment Guarantee 

Agreement; 

(2) Certificate of Incumbency. If 

requested by the lender, the Agency will 

provide the lender with a copy of Form 

RD 4279–7, ‘‘Certificate of Incumbency 

and Signature,’’ with the signature and 

title of the Agency official responsible 

for signing the Loan Note Guarantee, 

Lender’s Agreement, and Assignment 

Guarantee Agreement; 

(3) Copies of legal loan documents; 

and 

(4) Disbursement plan, if working 

capital is a purpose of the project. 

§ 4280.148 Refusal to execute Loan Note 

Guarantee. 

If the Agency determines that it 

cannot execute the Loan Note 

Guarantee, § 4279.187 of this chapter 

will apply. 

§ 4280.149 Requirements after project 

construction. 

Once the project has been 

constructed, the lender must provide 

the Agency periodic reports from the 

borrower. The borrower’s reports will 

include the information specified in 

paragraphs (a) and (b) of this section, as 

applicable. 

(a) Renewable energy projects. For 

renewable energy projects, commencing 

the first full calendar year following the 

year in which project construction was 

completed and continuing for 3 full 

years, provide a report detailing the 

information specified in paragraphs 

(a)(1) through (a)(7) of this section. 

(1) The actual amount of energy 

produced in BTUs, kilowatt-hours, or 

similar energy equivalents. 

(2) If applicable, documentation that 

any identified health and/or sanitation 

problem has been solved. 

(3) The annual income and/or energy 

savings of the renewable energy system. 

(4) A summary of the cost of operating 

and maintaining the facility. 

(5) A description of any maintenance 

or operational problems associated with 

the facility. 

(6) Recommendations for 

development of future similar projects. 

(7) Actual jobs created or saved. 

(b) Energy efficiency improvement 

projects. For energy efficiency 

improvement projects, commencing the 

first full calendar year following the 

year in which project construction was 

completed and continuing for 2 full 

years, provide a report detailing the 

actual amount of energy saved due to 

the energy efficiency improvements. 

§ 4280.150 Insurance requirements. 

Each borrower must obtain the 

insurance required in § 4280.118. The 

coverage required by this section must 

be maintained for the life of the loan 

unless this requirement is waived or 

modified by the Agency in writing. 

§ 4280.151 [Reserved] 

§ 4280.152 Servicing guaranteed loans. 

The lender must service the entire 

loan and must remain mortgagee and 

secured party of record notwithstanding 

the fact that another party may hold a 

portion of the loan. The entire loan must 

be secured by the same security with 

equal lien priority for the guaranteed 

and unguaranteed portions of the loan. 

The unguaranteed portion of a loan will 

neither be paid first nor given any 

preference or priority over the 

guaranteed portion of the loan. 

(a) Routine servicing. Comply with 

§ 4287.107 of this chapter, except that 

all notifications from the lender to the 

Agency shall be in writing and all 

actions by the lender in servicing the 

entire loan must be consistent with the 

servicing actions that a reasonable, 

prudent lender would perform in 

servicing its own portfolio. 

(b) Interest rate adjustments. Comply 

with § 4287.112 of this chapter, except 

that under § 4287.112(a)(3) of this 

chapter the interest rates, after 

adjustments, must comply with the 

requirements for interest rates on new 

loans as established by § 4280.125. 

(c) Release of collateral. 

(1) Collateral may only be released in 

accordance with § 4287.113(a) and (b) of 

this chapter and paragraph (c)(2) of this 

section. 

(2) Within the parameters of 

paragraph (c)(1) of this section, lenders 

may, over the life of the loan, release 

collateral (other than personal and 

corporate guarantees) with a cumulative 

value of up to 20 percent of the original 

loan amount without Agency 

concurrence, if the proceeds generated 

are used to reduce the guaranteed loan 

or to buy replacement collateral or real 

estate equal to or greater than the 

collateral being replaced. 

(d) Subordination of lien position. All 

subordinations of the lender’s lien 

position must comply with § 4287.123 

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(e) Alterations of loan instruments. 

All alterations of loan instruments must 

comply with § 4287.124 of this chapter. 

(f) Loan transfer and assumption. All 

loan transfers and assumptions must 

comply with § 4287.134(c), (d), (f), (g), 

and (i) through (k) of this chapter in 

addition to the following: 

(1) Documentation of request. All 

transfers and assumptions must be 

approved in writing by the Agency and 

must be to eligible applicants in 

accordance with § 4280.122. An 

individual credit report must be 

provided for transferee proprietors, 

partners, offices, directors, and 

stockholders with 20 percent or more 

interest in the business, along with such 

other documentation as the Agency may 

request to determine eligibility. 

(2) Terms. Loan terms must not be 

changed unless the change is approved 

in writing by the Agency with the 

concurrence of any holder and the 

transferor (including guarantors), if they 

have not been or will not be released 

from liability. Any new loan terms must 

be within the terms authorized by 

§ 4280.126. The lender’s request for 

approval of new loan terms will be 

supported by an explanation of the 

reasons for the proposed change in loan 

terms. 

(3) Additional loans. Loans to provide 

additional funds in connection with a 

transfer and assumption must be 

considered as a new loan application 

under § 4280.128. 

(4) Loss resulting from transfer. If a 

loss should occur upon consummation 

of a complete transfer and assumption 

for less than the full amount of the debt 

and the transferor (including personal 

guarantors) is released from liability, the 

lender, if it holds the guaranteed 

portion, may file Form RD 449–30, 

‘‘Loan Note Guarantee Report of Loss,’’ 

to recover its pro rata share of the actual 

loss. If a holder owns any of the 

guaranteed portion, such portion must 

be repurchased by the lender or the 

Agency in accordance with § 4279.78(c) 

of this chapter. In completing the report 

of loss, the amount of the debt assumed 

will be entered as net collateral 

(recovery). Approved protective 

advances and accrued interest thereon 

made during the arrangement of a 

transfer and assumption will be 

included in the calculations. 

§ 4280.153 Substitution of lender. 

(a) All substitutions of lenders must 

comply with § 4287.135(a)(2) and (b) of 

this chapter and paragraph (b) of this 

section. 

(b) The Agency may approve the 

substitution of a new lender if the 

proposed substitute lender: 

(1) Is an eligible lender in accordance 

with § 4280.130; 

(2) Is able to service the loan in 

accordance with the original loan 

documents; and 

(3) Acquires title to the unguaranteed 

portion of the loan held by the original 

lender and assumes all original loan 

requirements, including liabilities and 

servicing responsibilities. 

§ 4280.154 Default by borrower. 

If the loan goes into default, the 

lender must comply with § 4287.145 of 

this chapter. 

§ 4280.155 Protective advances. 

All protective advances made by the 

lender must comply with § 4287.156 of 

this chapter. 

§ 4280.156 Liquidation. 

All liquidations must comply with 

§ 4287.157 of this chapter, except as 

follows: 

(a) Under § 4287.157(d)(13) of this 

chapter, whenever $200,000 is used 

substitute $100,000; and 

(b) Under § 4287.157(d)(13) of this 

chapter, replace the sentence ‘‘The 

appraisal shall consider this aspect’’ 

with ‘‘Both the estimate and the 

appraisal shall consider this aspect.’’ 

§ 4280.157 Determination of loss and 

payment. 

Loss and payments will be 

determined in accordance with 

§ 4287.158 of this chapter. 

§ 4280.158 Future recovery. 

Future recoveries will be conducted 

in accordance with § 4287.169 of this 

chapter. 

§ 4280.159 Bankruptcy. 

Bankruptcies will be handled in 

accordance with § 4287.170 of this 

chapter, except that the notification 

required under § 4287.170(b)(4) of this 

chapter shall be made in writing. 

§ 4280.160 Termination of guarantee. 

Guarantees will be terminated in 

accordance with § 4287.180 of this 

chapter. 

§§ 4280.161–4280.164 [Reserved] 

Combined Funding for Renewable 

Energy Systems and Energy Efficiency 

Improvements 

§ 4280.165 Combined funding for 

renewable energy systems and energy 

efficiency improvements. 

The requirements for a RES or EEI 

project for which an applicant is seeking 

a combined grant and guaranteed loan 

are defined as follows: 

(a) Eligibility. Applicants must meet 

the applicant eligibility requirements 

specified in §§ 4280.109 and 4280.112 

and the borrower eligibility 

requirements specified in § 4280.122. 

Projects must meet the project eligibility 

requirements specified in §§ 4280.113 

and 4280.123. Applicants may submit 

simplified applications if the project 

meets the requirements specified in 

§ 4280.114. 

(b) Funding. Funding provided under 

this section is subject to the limits 

described in paragraphs (b)(1) through 

(b)(3) of this section. 

(1) The amount of any combined grant 

and guaranteed loan must not exceed 75 

percent of total eligible project costs. 

For purposes of combined funding 

requests, total eligible project costs are 

based on the total costs associated with 

those items specified in §§ 4280.115(c) 

and 4280.124(e). The applicant must 

provide the remaining total funds 

needed to complete the project. 

(2) The minimum combined funding 

request allowed is $5,000, with the grant 

portion of the funding request being at 

least $1,500. 

(3) Applicants whose combination 

applications are approved for funding 

must utilize both the loan guarantee and 

the grant. The Agency reserves the right 

to reduce the total loan guarantee and 

grant award as appropriate. 

(c) Application and documentation. 

When applying for combined funding, 

the applicant must submit separate 

applications for both types of assistance 

(grant and guaranteed loan). Each 

application must meet the requirements, 

including the requisite forms and 

certifications, specified in §§ 4280.116 

and 4280.128. The separate applications 

must be submitted simultaneously. The 

applicant must submit at least one set of 

documentation, but does not need to 

submit duplicate forms or certifications. 

(d) Evaluation. The Agency will 

evaluate each application according to 

applicable procedures specified in 

§§ 4280.117 and 4280.129. 

(e) Interest rate and terms of loan. The 

interest rate and terms of the loan for 

the loan portion of the combined 

funding request will be determined 

based on the procedures specified in 

§§ 4280.125 and 4280.126 for 

guaranteed loans. 

(f) Other provisions. In addition to the 

requirements specified in paragraphs (a) 

through (e) of this section, the combined 

funding request shall be subject to the 

other requirements specified in this 

subpart, including, but not limited to, 

processing and servicing requirements, 

as applicable, as described in 

paragraphs (f)(1) through (f)(3) of this 

section. 


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(1) All other provisions of §§ 4280.101 

through 4280.111 apply to the combined 

funding request. 

(2) All other provisions of §§ 4280.112 

through 4280.121 apply to the grant 

portion of the combined funding 

request. 

(3) All other provisions of §§ 4280.122 

through 4280.160 apply to the 

guaranteed loan portion of the 

combined funding request. 

§§ 4280.166–4280.169 [Reserved] 

Renewable Energy System Feasibility 

Study Grants 

§ 4280.170 Applicant eligibility. 

To be eligible for a renewable energy 

system feasibility study grant under this 

subpart, the applicant must be an 

agricultural producer or a rural small 

business, as defined in § 4280.103, and 

must be the prospective owner of the 

renewable energy system for which the 

feasibility study grant is sought. 

§ 4280.171 Project eligibility. 

Only renewable energy system 

projects that meet the requirements 

specified in this section are eligible for 

feasibility study grants under this 

subpart. The project for which the 

feasibility study grant is sought shall: 

(a) Be for the purchase, installation, 

expansion, or other energy-related 

improvement of a renewable energy 

system located in a State, as defined in 

§ 4280.103; 

(b) Be for a facility located in a rural 

area if the applicant is a rural small 

business, or in a rural or non-rural area 

if the applicant is an agricultural 

producer. If the agricultural producer’s 

facility is in a non-rural area, then the 

feasibility study can only be for a 

renewable energy system on integral 

components of or directly related to the 

facility, such as vertically integrated 

operations, and are part of and colocated with the agriculture production 

operation; 

(c) Be for technology that is precommercial or commercially available, 

and that is replicable; 

(d) Not have had a feasibility study 

already completed for it with Federal 

and/or State assistance; and 

(e) The applicant has a place of 

business in a State. 

§ 4280.172 Application eligibility 

provisions. 

(a) Applications for industry-level 

feasibility studies, also known as 

feasibility study templates or guides, are 

not eligible because the assistance is not 

provided to a specific project. 

(b) Applications must be from the 

prospective owner(s) of the renewable 

energy system for which the feasibility 

study grant is sought. Applications from 

other entities (e.g., entities that would 

be conducting the feasibility study and 

are not the prospective owners) will not 

be accepted. 

(c) Applications can be submitted for 

a modification to an existing renewable 

energy system (e.g., for the expansion 

portion of an existing wind farm). 

(d) Applications cannot be submitted 

in a Fiscal Year for an RES project if an 

RES application for the same renewable 

energy system is submitted in that same 

Fiscal Year and vice versa. 

§ 4280.173 Grant funding for feasibility 

studies. 

(a) Maximum grant amount. The 

maximum amount of grant funds that 

will be made available for an eligible 

feasibility study project under this 

subpart to any one recipient will not 

exceed $50,000 or 25 percent of the total 

eligible project cost of the study, 

whichever is less. Eligible project costs 

are specified in paragraph (b) of this 

section. 

(b) Eligible project costs. Only postapplication costs will be considered 

eligible. Eligible project costs for 

renewable energy system feasibility 

studies shall be specific to the 

completion of the feasibility study (refer 

to Appendix E of this subpart for 

information on the content of a 

feasibility study) including, but not 

limited to, the items listed in paragraphs 

(b)(1) through (b)(3) of this section. 

(1) Resource assessment; 

(2) Transmission study; and 

(3) Environmental study. 

(c) Ineligible project costs. Ineligible 

project costs for renewable energy 

system feasibility studies include, but 

are not limited to: 

(1) Costs associated with selection of 

engineering, architectural, or 

environmental services; 

(2) Designing, bidding, or contract 

development for the proposed facility; 

(3) Permitting and other licensing 

costs required to construct the facility; 

and 

(4) Any goods or services provided by 

a person or entity who has a conflict of 

interest as provided in § 4280.106. 

(d) Time limit. The grantee will have 

2 years from the date of the grant 

agreement to provide the Agency with a 

complete and acceptable feasibility 

study and to request disbursement of 

the funds. If the grantee does not submit 

to the Agency a complete and 

acceptable feasibility study within this 

2 year period, the grant is subject to 

termination by and reimbursement to 

the Agency according to Departmental 

regulations. 

§§ 4280.174–4280.175 [Reserved] 

§ 4280.176 Feasibility study grant 

applications—content. 

Applications for feasibility study 

grants must include a Table of Contents 

with clear pagination and chapter 

identification and shall contain the 

information specified in paragraphs (a) 

and (b) of this section and shall be 

presented in the same order. 

(a) Forms, documents, and 

certifications. The application shall 

contain the forms and documents 

specified in paragraphs (a)(1) through 

(a)(11) of this section. 

(1) Form SF–424. 

(2) Form SF–424A, ‘‘Budget 

Information—Non-Construction 

Programs’’ (as applicable). 

(3) Form SF–424B, ‘‘Assurances— 

Non-Construction Programs’’ (as 

applicable). 

(4) Form SF–424C (as applicable). 

(5) Form SF–424D (as applicable). 

(6) Form RD 1940–20 (as applicable). 

(7) Except for sole proprietors, a copy 

of legal organizational documents. 

(8) A proposed work plan, which 

includes: 

(i) A brief description of the proposed 

system the feasibility study will 

evaluate; 

(ii) A description of the feasibility 

study to be conducted. The contents of 

an acceptable feasibility study are 

identified in Appendix E of this subpart. 

Applicants shall require those 

conducting the feasibility study to 

consider and document within the 

feasibility study the important 

environmental factors within the 

planning area and the potential 

environmental impacts of the project for 

which the feasibility study is being 

conducted, as well as the alternatives 

considered; 

(iii) The timeframe for completion of 

the feasibility study; 

(iv) The experience of the company/ 

individual completing the feasibility 

study, including the number of similar 

projects the company/individual has 

performed, the number of years the 

company has been performing a similar 

service, and corresponding resumes; 

and 

(v) The source and amount of other 

project funds needs to be clearly 

identified. Agency approved written 

documentation/confirmation from any 

third party committing a specific 

amount of such funds is required. 

Documentation includes such items as 

bank statements, lender commitment 

letters, and so forth; 

(9) A certification that the applicant 

has not received any other Federal or 

State assistance for a feasibility study 

for the subject renewable energy system. 


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(10) If the applicant is a rural small 

business, certification that the feasibility 

study grant will be for a renewable 

energy system project that is located in 

a rural area. 

(11) The applicant’s Dun and 

Bradstreet Data Universal Numbering 

System (DUNS) number (except for 

individuals). 

(b) Financial information for gross 

income or size determination. The 

application shall contain sufficient 

financial information to allow the 

Agency to determine the agricultural 

producer’s percentage of gross income 

derived from agricultural operations or 

the rural small business’ size, as 

applicable. All information submitted 

under this paragraph (b) must be 

substantiated by authoritative records: 

(1) If the applicant is a rural small 

business, provide sufficient information 

to determine its total annual receipts 

and number of employees and the same 

information for any parent, subsidiary, 

or affiliates at other locations. 

Voluntarily providing tax returns is one 

means of satisfying this requirement. 

The information provided must be 

sufficient for the Agency to make a 

determination of business size as 

defined by the Small Business 

Administration; and 

(2) If the applicant is an agricultural 

producer, provide the gross market 

value of the agricultural products, gross 

agricultural income, and gross nonfarm 

income of the applicant for the calendar 

year preceding the year in which the 

application is submitted. 

§ 4280.177 Evaluation of feasibility study 

grant applications. 

(a) Agency evaluation. Feasibility 

study applications submitted under this 

subpart will be evaluated by the Agency 

for eligibility, completeness, and 

scoring. 

(b) General review. The Agency will 

evaluate each application and make a 

determination as to whether the 

applicant is eligible, the proposed grant 

is for an eligible feasibility study, and 

the proposed grant complies with all 

applicable statutes and regulations. 

(1) Applicant eligibility. The Agency 

will first determine whether the entity 

is eligible to compete for a feasibility 

study grant. Applications for applicants 

determined by the Agency not to be 

eligible will not be processed further. 

The Agency will determine applicant 

eligibility based on the criteria specified 

in § 4280.170. 

(2) Proposal eligibility. After 

determining applicant eligibility, the 

Agency will review the application to 

determine if the proposal is eligible. 

Applications determined by the Agency 

not to be eligible will not be processed 

further. The Agency will determine 

whether the application contains 

certification by the applicant that the 

applicant has not received any other 

Federal or State assistance for a 

feasibility study on the subject facility. 

If the application does not contain such 

certification, it is an ineligible 

application and the Agency will stop 

processing the application. 

§ 4280.178 Scoring feasibility study grant 

applications. 

Agency personnel will score each 

feasibility study application based on 

the evaluation criteria specified in 

paragraphs (a) through (f) of this section, 

with a maximum score of 100 points 

possible. 

(a) Energy replacement or generation. 

The project can be for either 

replacement or generation, but not both. 

A maximum of 25 points can be 

awarded under this section. 

(1) Energy replacement. 25 points will 

be awarded if proposed project will 

offset any portion of the applicant’s 

energy needs. 

(2) Energy generation. 15 points will 

be awarded if the proposed renewable 

energy system is intended primarily for 

production of energy for sale. 

(b) Commitment of funds for the 

feasibility study. Appropriate 

documentation must verify commitment 

of funds. A maximum of 10 points can 

be awarded under this section. 

(1) 10 points—100 percent of 

matching funds. 

(2) 7.5 points—75 percent up to, but 

not including 100 percent of matching 

funds. 

(3) 5 points—50 percent up to, but not 

including 75 percent of matching funds. 

(4) 0 points—less than 50 percent of 

matching funds. 

(c) Designation as a Small agricultural 

producer/very small business. An 

applicant will be considered either an 

agricultural producer or rural small 

business. No applicant will be 

considered as both. Points will only be 

awarded under either paragraph (c)(1) or 

(c)(2) of this section. A maximum of 20 

points can be awarded under this 

section. 

(1) For an Agricultural Producer: 

(i) 10 points will be awarded if the 

applicant is an agricultural producer 

producing agricultural products with a 

gross market value of less than $600,000 

in the preceding year, or 

(ii) 20 points will be awarded if the 

applicant is an agricultural producer 

producing agricultural products with a 

gross market value of less than $200,000 

in the preceding year. 

(2) For a Rural Small Business, 20 

points will be awarded if the applicant 

is a very small business, as defined in 

§ 4280.103. 

(d) Experience and qualifications of 

the entity identified to perform the 

feasibility study. A maximum of 15 

points can be awarded under this 

section. 

(1) 15 points will be awarded if the 

entity has 5 or more years experience in 

the field of study for the technology 

being proposed. 

(2) 7.5 points will be awarded if the 

entity has 2 or more years, but less than 

5 years, experience in the field of study 

for the technology field being proposed. 

(3) 0 points will be awarded if the 

entity has less than 2 years experience 

in the field of study for the technology 

field being proposed. 

(e) Size of feasibility study grant 

request. A maximum of 20 points can be 

awarded under this section. If the 

feasibility study request is: 

(1) $10,000 or less, 20 points will be 

awarded. 

(2) Greater than $10,000 up to and 

including $25,000, 10 points will be 

awarded. 

(3) Greater than $25,000, 0 points will 

be awarded. 

(f) Resources to implement project. 

Considering the technology being 

proposed, the applicant may qualify for 

other local or State programs to assist in 

the construction or operation of the 

facility. These programs will benefit the 

applicant and/or proposed project 

during or after the facility is constructed 

and operational. Points can be awarded 

for both types of assistance, for a 

maximum of 10 points. 

(1) If the applicant has identified local 

programs, 5 points will be awarded. 

(2) If the applicant has identified State 

programs, 5 points will be awarded. 

§ 4280.179 Selecting feasibility study grant 

applications for award. 

The Agency will use the following 

process to determine which feasibility 

study grants receive funding under this 

subpart. 

(a) Ranking of applications. All 

scored applications will be ranked by 

the Agency as soon after the application 

deadline as possible. All applications 

that are ranked will be considered for 

selection for funding. 

(b) Selection of applications for 

funding. Using the ranking created 

under paragraph (a) of this section, the 

Agency will consider the score an 

application has received compared to 

the scores of other ranked applications, 

with higher scoring applications 

receiving first consideration for funding. 

(c) Funding selected applications. As 

applications are funded, if insufficient 

funds remain to fund the next highest 


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scoring application, the Agency may 

elect to fund a lower scoring 

application. Before this occurs, the 

Agency will provide the applicant of the 

higher scoring application the 

opportunity to reduce the amount of its 

grant request to the amount of funds 

available. If the applicant agrees to 

lower its grant request, it must certify 

that the purposes of the project can be 

met, and the Agency must determine the 

project is financially feasible at the 

lower amount. 

(d) Disposition of ranked applications 

not funded. Based on the availability of 

funding, a ranked application may not 

be funded in the fiscal year in which it 

was submitted. Such ranked 

applications will not be carried forward 

into Fiscal Year 2012 and the Agency 

will notify the applicant in writing. 

§ 4280.180 Actions prior to grant closing. 

(a) Environmental. If construction is a 

component of the study, the appropriate 

level of environmental assessment must 

be completed prior to the obligation of 

funds. All feasibility study grants made 

under this subpart are subject to the 

requirements of 7 CFR part 1940, 

subpart G. When construction is not a 

component of the study, feasibility 

studies are considered planning 

assistance, which are categorically 

excluded from the environmental 

review process by § 1940.310 of this 

title. 

(b) Evidence of other funds. 

Applicants expecting funds from other 

sources for use in completing projects 

being partially financed with Agency 

funds shall present evidence of the 

commitment of these funds from such 

other sources prior to disbursement of 

grant funds. 

§ 4280.181 Awarding and administering 

feasibility study grants. 

Renewable energy system feasibility 

study grants will be awarded and 

administered in accordance with 

Departmental regulations and 

paragraphs (a) through (e) of this 

section. 

(a) Letter of conditions. The Agency 

will notify the approved applicant in 

writing, setting out the conditions under 

which the grant will be made. The 

notice will include those matters 

necessary to ensure that the proposed 

grant is completed in accordance with 

the terms of the scope of work and 

budget, that grant funds are expended 

for the feasibility study, and that the 

applicable requirements prescribed in 

the relevant Departmental regulations 

are complied with. The Letter of 

Conditions will be sent to the applicant. 

(b) Applicant’s intent to meet 

conditions. Upon reviewing the 

conditions and requirements in the 

Letter of Conditions, the applicant must 

complete, sign and return a Form RD 

1942–46, ‘‘Letter of Intent to Meet 

Conditions,’’ to the Agency; or if certain 

conditions cannot be met, the applicant 

may propose alternate conditions to the 

Agency. The Agency must concur with 

any changes proposed to the Letter of 

Conditions by the applicant before the 

application will be further processed. 

(c) Forms and certifications. The 

forms specified in paragraphs (c)(1) 

through (c)(6) of this section will be 

attached to the letter of conditions 

referenced in paragraph (a) of this 

section. The forms specified in 

paragraphs (c)(1) through (c)(5) of this 

section and all of the certifications must 

be submitted prior to grant approval. 

The form specified in paragraph (c)(6), 

which is to be completed by the 

contractor (if any), does not need to be 

returned to the Agency, but must be 

kept on file. 

(1) Form AD–1047. 

(2) Form AD–1049. 

(3) Either Form SF–LLL or Exhibit A– 

1 of RD Instruction 1940–Q. 

(4) Form RD 400–1. 

(5) Form RD 400–4. 

(6) Form AD–1048. 

(d) Grant approval. The applicant will 

be sent a copy of the executed Form RD 

1940–1, the approved scope of work, 

and Form RD 4280–2. Form RD 1940– 

1 must be signed by the applicant. 

(e) Grant agreement. Prior to grant 

disbursement, but after grant obligation, 

the applicant must complete, sign, and 

return Form RD 4280–2. The grantee 

must abide by all requirements 

contained in Form RD 4280–2, this 

subpart, and any other applicable 

Federal statutes or regulations. Failure 

to follow these requirements may result 

in termination of the grant and adoption 

of other available remedies. 

§ 4280.182 Servicing feasibility study 

grants. 

Feasibility study grants will be 

serviced in accordance with 

Departmental regulations; 7 CFR part 

1951, subparts E and O; and paragraphs 

(a) through (n) of this section. 

(a) Inspections. Grantees will permit 

periodic inspection of the project 

records and operations by a 

representative of the Agency. 

(b) Programmatic changes. The 

grantee shall obtain prior Agency 

approval for any change to the scope or 

objectives of the approved project. 

Failure to obtain prior approval of 

changes to the scope of work or budget 

may result in suspension, termination, 

and recovery of grant funds. 

(c) Changes in project cost or scope. 

If there is a significant reduction in 

project cost or changes in project scope, 

the applicant’s funding needs, 

eligibility, and scoring, as applicable, 

will be reassessed. Decreases in Agency 

funds will be based on revised project 

costs and other selection factors; 

however, other factors, including 

Agency regulations and Notices used at 

the time of grant approval, will remain 

the same. Obligated grant funds not 

needed to complete the project will be 

de-obligated. 

(d) Transfer of obligations. Subject to 

Agency approval, an obligation of funds 

established for a grantee may be 

transferred to a different (substituted) 

grantee provided: 

(1) The substituted grantee 

(i) Is eligible; 

(ii) Has a close and genuine 

relationship with the original grantee; 

and 

(iii) Has the authority to receive the 

assistance approved for the original 

grantee; and 

(2) The type of renewable energy 

technology and the scope of the project 

for which the Agency funds will be used 

remain unchanged. 

(e) Financial management system and 

records. Grantees are required to 

maintain a financial management 

system and records in accordance with 

Departmental regulations. 

(f) Fund disbursement. Grant funds 

will be expended on a pro rata basis 

with matching funds. 

(1) Requests for reimbursement may 

be submitted monthly or more 

frequently if authorized to do so by the 

Agency. Ordinarily, payment will be 

made within 30 days after receipt of a 

proper request for reimbursement. 

(2) The Grantee shall not request 

reimbursement for the Federal share of 

amounts withheld from contractors to 

ensure satisfactory completion of work 

until after it makes those payments. 

(3) Payment shall be made by 

electronic funds transfer. 

(4) Standard Form 270, ‘‘Request for 

Advance or Reimbursement,’’ or other 

format prescribed by the Agency shall 

be used to request grant 

reimbursements. 

(5) For renewable energy system 

feasibility studies, grant funds will be 

disbursed in accordance with the above 

through 90 percent of grant 

disbursement. The final 10 percent of 

grant funds will be held by the Agency 

until a feasibility study acceptable to the 

Agency has been submitted. 

(g) Deobligation of grant funds. Funds 

remaining after all costs incident to the 

project have been paid or provided for 

are subject to deobligation. 


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(h) Monitoring of project. Grantees are 

responsible for ensuring that all 

activities are performed within the 

approved scope of work and that funds 

are only used for approved purposes. 

Grantees shall constantly monitor 

performance to ensure that time 

schedules are being met, projected work 

by time periods is being accomplished, 

financial resources are being 

appropriately expended by contractors 

(if applicable), and any other 

performance objectives identified in the 

scope of work are being achieved. The 

Agency will monitor grantees to ensure 

that activities are performed in 

accordance with the Agency-approved 

scope of work and to ensure that funds 

are expended for approved purposes. 

The Agency’s monitoring of grantees 

neither relieves the grantee of its 

responsibilities to ensure that activities 

are performed within the scope of work 

approved by the Agency and that funds 

are expended for approved purposes 

only nor provides recourse or a defense 

to the grantee should the grantee 

conduct unapproved activities, engage 

in unethical conduct, engage in 

activities that are or give the appearance 

of a conflict of interest, or expend funds 

for unapproved purposes. 

(i) Federal financial reports. A SF– 

425, ‘‘Federal Financial Report,’’ and a 

project performance report will be 

required of all grantees on a semiannual 

basis. The grantee will complete the 

project within the total sums available 

to it, including the grant, in accordance 

with the scope of work and any 

necessary modifications thereof 

prepared by the grantee and approved 

by the Agency. The final federal 

financial report must be submitted to 

the Agency within 90 days after the 

feasibility study has been completed. 

(j) Performance reports. Grantees must 

submit to the Agency, in writing, 

semiannual performance reports and a 

final performance report. Grantees are to 

submit an original of each report to the 

Agency. 

(1) Semiannual performance reports. 

Each semiannual performance report 

shall describe current progress and 

identify any problems, delays, or 

adverse conditions, if any, which have 

affected or will affect attainment of 

overall project objectives or prevent 

meeting time frame for completion of 

the feasibility study within 2 years. This 

disclosure shall be accompanied by a 

statement of the action taken or planned 

to resolve the situation. 

(2) Final performance report. A final 

performance report, which will serve as 

the last semiannual performance report, 

will be required within 90 days after the 

feasibility study has been completed. 

The final performance report shall 

summarize any problems, delays, or 

adverse conditions, if any, which have 

affected the project objectives or 

prevented meeting time frames for 

completion of the feasibility study. The 

final performance report should indicate 

if the grantee intends to proceed with 

the construction of the project. 

(k) Final deliverables. Upon 

completion of the feasibility study, the 

grantee shall submit the following to the 

Agency: 

(1) The project feasibility study; and 

(2) SF–270. 

(l) Renewable energy feasibility 

studies. Beginning the first full year 

after the feasibility study has been 

completed, grantees shall report 

annually for 2 years on the following: 

(1) Is the renewable energy system 

project for which the feasibility study 

was conducted underway? If ‘‘yes,’’ 

describe how far along the renewable 

energy system project is (e.g., financing 

has been secured, site has been secured, 

construction contracts are in place, 

project is completed). 

(2) Is the renewable energy system 

project complete? If so, what is the 

actual amount of energy being 

produced? 

(m) Other reports. For clarification 

purposes, the Agency may request any 

additional project and/or performance 

data for the project for which grant 

funds have been received. 

(n) Grant close-out and related 

activities. Grant close-out and related 

activities shall be performed in 

accordance with the Departmental 

Regulations. In addition, failure to 

submit satisfactory reports on time 

under the provisions of paragraphs (i) 

through (m) of this section may result in 

the suspension or termination of a grant. 

The provisions of this section apply to 

grants and sub-grants. 

§§ 4280.183–4280.185 [Reserved] 

Energy Audit and Renewable Energy 

Development Assistance Grants 

§ 4280.186 Applicant eligibility. 

To be eligible for an energy audit 

grant or a renewable energy 

development assistance grant under this 

subpart, the applicant must meet each of 

the criteria, as applicable, specified in 

paragraphs (a) through (c) of this 

section. The Agency will determine an 

applicant’s eligibility. 

(a) Type of applicant. The applicant 

must be one of the following: 

(1) A unit of State, tribal, or local 

government; 

(2) A land-grant college or university, 

or other institution of higher education; 

(3) A rural electric cooperative; 

(4) A public power entity; or 

(5) An instrumentality of a State, 

tribal, or local government. 

(b) Capacity to perform. The applicant 

must have sufficient capacity to perform 

the energy audit or renewable energy 

development assistance activities 

proposed in the application to ensure 

success. The Agency will make this 

assessment based on the information 

provided in the application. 

(c) Legal authority and responsibility. 

Each applicant must have, or obtain, the 

legal authority necessary to carry out the 

purpose of the grant. 

§ 4280.187 Project eligibility. 

To be eligible for an energy audit or 

a renewable energy development 

assistance grant, the grant funds for a 

project must be used by the grant 

recipient to assist agricultural producers 

or rural small businesses located in a 

State in one or both of the purposes 

specified in paragraphs (a) and (b) of 

this section, and shall also comply with 

paragraphs (c) through (e), and, if 

applicable, paragraph (f) of this section. 

(a) Grant funds may be used to 

conduct and promote energy audits that 

meet the requirements of the energy 

audit as defined in this subpart. Energy 

audits must cover the following: 

(1) Situation report. Provide a 

narrative description of the facility or 

process being audited; its energy 

system(s) and usage; its activity profile; 

and the price per unit of energy 

(electricity, natural gas, propane, fuel 

oil, renewable energy, etc.) paid by the 

customer on the date of the audit. Any 

energy conversion data should be based 

on use and source. 

(2) Potential improvements. List 

specific information regarding all 

potential energy-saving opportunities 

and the associated cost. 

(3) Technical analysis. Discuss the 

interactions of the potential 

improvements with existing energy 

systems. 

(i) Estimate the annual energy and 

energy costs savings expected from each 

improvement identified for the potential 

project. 

(ii) Estimate all direct and attendant 

indirect costs of each improvement. 

(iii) Rank potential improvement 

measures by cost-effectiveness. 

(4) Potential improvement 

description. Provide a narrative 

summary of the potential improvement 

and its ability to provide needed 

benefits, including a discussion of nonenergy benefits such as project 

reliability and durability. 

(i) Provide preliminary specifications 

for critical components. 


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(ii) Provide preliminary drawings of 

project layout, including any related 

structural changes. 

(iii) Document baseline data 

compared to projected consumption, 

together with any explanatory notes. 

Provide the actual total quantity of 

energy used (BTU) in the original 

building and/or equipment in the 12 

months prior to the EEI project and the 

projected energy usage after the EEI 

project shall be the projected total 

quantity of energy used (BTU) on an 

annual basis for the same size or 

capacity as the original building or 

equipment. For energy efficiency 

improvement to equipment, if the new 

piece of equipment has a different 

capacity than the piece of equipment 

being replaced, the projected total 

quantity of energy used for the new 

piece of equipment shall be adjusted 

based on the ratio of the capacity of the 

replaced piece of equipment to the 

capacity of the new piece of equipment. 

When appropriate, show before-andafter data in terms of consumption per 

unit of production, time or area. Include 

at least 1 year’s bills for those energy 

sources/fuel types affected by this 

project. Also submit utility rate 

schedules, if appropriate. 

(iv) Identify significant changes in 

future related operations and 

maintenance costs. 

(v) Describe explicitly how outcomes 

will be measured annually. 

(b) Grant funds may be used to 

conduct and promote renewable energy 

development assistance by providing to 

agricultural producers and rural small 

businesses recommendations and 

information on how to improve the 

energy efficiency of their operations and 

to use renewable energy technologies 

and resources in their operations. 

(c) Energy audit and renewable energy 

development assistance can be provided 

only to a facility located in a rural area 

unless the owner of such facility is an 

agricultural producer. If the facility is 

owned by an agricultural producer, the 

facility for which such services are 

being provided may be located in either 

a rural or non-rural area. If the 

agricultural producer’s facility is in a 

non-rural area, then the energy audit or 

renewable energy development 

assistance can only be for a renewable 

energy system or energy efficiency 

improvement on integral components of 

or directly related to the facility, such as 

vertically integrated operations, and are 

part of and co-located with the 

agriculture production operation. 

(d) The energy audit or renewable 

energy development assistance must be 

provided to a recipient in a State. 

(e) The applicant must have a place of 

business in a State. 

(f) For the purposes of this subpart, 

only small hydropower projects are 

eligible for energy audits and renewable 

energy development assistance. Per 

consultation with the U.S. Department 

of Energy, the Agency is defining small 

hydropower as having a rated power of 

30 megawatts or less, which includes 

hydropower projects commonly referred 

to as ‘‘micro-hydropower’’ and ‘‘minihydropower.’’ 

§ 4280.188 Grant funding for energy audit 

and renewable energy development 

assistance. 

(a) Maximum grant amount. The 

maximum aggregate amount of energy 

audit and renewable energy 

development assistance grants awarded 

to any one recipient under this subpart 

cannot exceed $100,000. Grant funds 

awarded for energy audit and renewable 

energy development assistance projects 

may be used only to pay eligible project 

costs, as described in paragraph (b) of 

this section. Grant funds awarded for 

energy audits and renewable energy 

development assistance projects are 

prohibited from being used to pay costs 

associated with the items listed in 

paragraph (c) of this section. 

(b) Eligible project costs. Eligible 

project costs for energy audits and 

renewable energy development 

assistance are those post-application 

expenses directly related to conducting 

and promoting energy audits and 

renewable energy development 

assistance, which include but are not 

limited to: 

(1) Salaries directly or indirectly 

related to the project; 

(2) Travel expenses directly related to 

conducting energy audits or renewable 

energy development assistance; 

(3) Office supplies (e.g., paper, pens, 

file folders); and 

(4) Administrative expenses, up to a 

maximum of 5 percent of the grant, 

which include but are not limited to: 

(i) Utilities; 

(ii) Office space; 

(iii) Operation expenses of office and 

other project-related equipment (e.g., 

computers, cameras, printers, copiers, 

scanners); and 

(iv) Expenses for outreach and 

marketing of the energy audit and 

renewable energy development 

assistance activities, including 

associated travel expenses. 

(c) Ineligible project purposes. Grant 

funds may not be used to: 

(1) Pay for any construction-related 

activities; 

(2) Purchase equipment; 

(3) Pay any costs of preparing the 

application package for funding under 

this subpart; 

(4) Pay any costs of the project 

incurred prior to the application date of 

the grant made under this subpart; 

(5) Fund political or lobbying 

activities; and 

(6) Pay any judgment or debt owed to 

the United States. 

(d) Energy audits. A recipient of a 

grant under this subpart that conducts 

an energy audit shall require that, as a 

condition of the energy audit, the 

agricultural producer or rural small 

business pay at least 25 percent of the 

cost of the energy audit. Further, the 

amount paid by the agricultural 

producer or rural small business will be 

retained by the recipient as a 

contribution towards the cost of the 

energy audit. 

(e) Time limit. Unless otherwise 

agreed to by the Agency, any energy 

audit or renewable energy development 

assistance grant agreement under this 

subpart will terminate 2 years from the 

date the Agency signs the agreement. 

§ 4280.189 [Reserved] 

§ 4280.190 EA/REDA grant applications— 

content. 

Applications must contain the 

elements specified in paragraphs (a) 

through (g) of this section. 

(a) Form SF–424. 

(b) Form SF–424A. 

(c) Form SF–424B. 

(d) If applicable, a copy of the 

applicant’s organizational documents 

showing the applicant’s legal existence 

and authority to perform the activities 

under the grant. 

(e) A proposed scope of work, 

including a description of the proposed 

project, details of the proposed activities 

to be accomplished and timeframes for 

completion of each task, the number of 

months duration of the project, and the 

estimated time it will take from grant 

approval to beginning of project 

implementation. A written narrative to 

be used as the scope of work which 

includes, at a minimum, the following 

items: 

(1) An Executive Summary; 

(2) The plan and schedule for 

implementation; 

(3) The anticipated number of 

agricultural producers and/or rural 

small businesses to be served; 

(4) An itemized budget—compute 

total cost per rural small business or 

agricultural producer served—matching 

funds should be clearly identified as 

cash; 

(5) The geographic scope of the 

proposed project; 


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(6) Applicant’s experience as follows: 

(i) If applying for a renewable energy 

development assistance grant, the 

applicant’s experience in completing 

similar renewable energy development 

assistance activities, including the 

number of similar projects the applicant 

has performed and the number of years 

the applicant has been performing a 

similar service. 

(ii) If applying for an energy audit 

grant, the number of energy audits and 

assessments the applicant has 

completed and the number of years the 

applicant has been performing those 

services; 

(iii) For all applicants, the amount of 

experience in administering energy 

audit, renewable energy development 

assistance, or similar activities using 

State or Federal support. 

(7) Applicant’s resources, including 

personnel, finances, and technology, to 

complete what is proposed. If an 

application is for projects located in 

multiple states, resources must be 

sufficient to complete all projects; 

(8) Leveraging and commitment of 

other sources of funding being brought 

to the project. Leveraged funds should 

be clearly identified as cash and by 

source. Written documentation/ 

confirmation from the party committing 

a specific amount of leveraged funds is 

required; 

(9) Outreach activities/marketing 

efforts specific to conducting energy 

audit and renewable energy 

development assistance including: 

(i) Project title; 

(ii) Goals of the project; 

(iii) Identified need; 

(iv) Target audience; 

(v) Timeline and type of activities/ 

action plan; and 

(vi) Marketing strategies. 

(10) Method and rationale used to 

select the areas and businesses that will 

receive the service. 

(11) Brief description of how the work 

will be performed, including whether 

organizational staff, consultants, or 

contractors will be used. 

(f) The most recent financial audit 

(not more than 18 months old) of the 

applicant, or subdivision thereof, that 

will be performing the proposed work. 

If such an audit is not available, the 

latest financial information that shows 

the financial capacity of the applicant, 

or subdivision thereof, to perform the 

proposed work. Such information may 

include, but is not limited to, the most 

recent year-end balance sheet, income 

statement, and other appropriate data 

that identify the applicant’s resources. 

(g) The applicant’s Dun and 

Bradstreet Data Universal Numbering 

System (DUNS) number. 

§ 4280.191 Evaluation of energy audit and 

renewable energy development assistance 

grant applications. 

Upon receipt of an application, the 

Agency will conduct a review to 

determine if the applicant and project 

are eligible. The Agency will notify the 

applicant in writing of the Agency’s 

findings. If the Agency has determined 

that either the applicant or project is 

ineligible, it will include in the 

notification the reason(s) for its 

determination(s). 

§ 4280.192 Scoring energy audit and 

renewable energy development assistance 

grant applications. 

Agency personnel will score each 

application using the criteria specified 

in paragraphs (a) through (h) of this 

section, with a maximum score of 100 

points possible. 

(a) Project proposal (maximum score 

of 10 points). The applicant will be 

scored based on its in-house ability to 

conduct audits versus using third party 

auditing organizations as illustrated in 

the application. 

(1) If the applicant proposes to use at 

least 51 percent of the awarded funding 

to employ internal, qualified auditors 

and/or renewable energy specialists for 

program implementation, up to 10 

points will be awarded as follows: 

(i) If the percentage is between 51 

percent and 75 percent (inclusive), 5 

points will be awarded. 

(ii) If the percentage is more than 75 

percent, 10 points will be awarded. 

(2) If the applicant proposes to use 

less than 51 percent of the awarded 

funding to employ internal, qualified 

auditors and/or renewable energy 

specialists for program implementation, 

zero points will be awarded. 

(b) Use of Grant Funds for 

Administrative Expenses (maximum 

score of 10 points). Grantees selected to 

participate may use up to 5 percent of 

their award for administrative expenses. 

(1) If the applicant proposes to use 

none of the grant funds for 

Administrative Expenses, 10 points will 

be awarded. 

(2) If the applicant proposes to use a 

portion (up to 5 percent) of the grant 

funds for Administrative Expenses, zero 

points will be awarded. 

(c) Applicant’s organizational 

experience in completing proposed 

activity (maximum score of 15 points). 

The applicant will be scored on the 

experience of the organization in 

meeting the benchmarks below. This 

means that an organization must have 

been in business and provided services 

as noted in the scoring requirements. An 

organization’s experience must be 

documented with references and 

resumes. Points will be awarded as 

follows: 

(1) More than 3 years of experience, 

15 points will be awarded. 

(2) At least 2 years and up to and 

including 3 years of experience, 10 

points will be awarded. 

(3) At least 1 year but less than 2 years 

of experience, 5 points will be awarded. 

(4) Less than 1 year of experience, 

zero points will be awarded. 

(d) Geographic scope of project in 

relation to identified need (maximum 

score of 10 points). 

(1) If the applicant’s proposed or 

existing service area is State-wide or 

includes all or parts of multiple states, 

and the marketing and outreach plan 

has identified needs throughout that 

service area, 10 points will be awarded. 

(2) If the applicant’s proposed or 

existing service area consists of multiple 

counties in a single State and the 

marketing and outreach plan has 

identified needs throughout that service 

area, 7.5 points will be awarded. 

(3) If the applicant’s service area 

consists of a single county or 

municipality and the marketing and 

outreach plan has identified needs 

throughout that service area, 5 points 

will be awarded. 

(e) Number of agricultural producers/ 

rural small businesses to be served 

(maximum score of 15 points). 

(1) If the applicant plans to provide 

audits to ultimate recipients with 

average audit costs of $1,000 or less, 15 

points will be awarded. 

(2) If the applicant plans to provide 

audits to ultimate recipients with 

average audit costs over $1,000 but less 

than $1,500, 10 points will be awarded. 

(3) If the applicant plans to provide 

audits to ultimate recipients with 

average audit costs of at least $1,500 but 

less than $2,000, 5 points will be 

awarded. 

(f) Potential of project to produce 

energy savings and its attending 

environmental benefits (maximum score 

of 25 points). Applicants can be 

awarded points under both paragraphs 

(f)(1) and (f)(2) of this section. 

(1) If the applicant has an existing 

program that can demonstrate the 

achievement of energy savings with the 

agricultural producers and/or rural 

small businesses it has served, 13 points 

will be awarded. 

(2) If the applicant provides evidence 

that it has received awards in 

recognition of its renewable energy, 

energy savings, or energy-based 

technical assistance, up to 12 points 

will be awarded based on number of 

awards and rigorousness of the 

competition for each award. 

(g) Marketing and outreach plan 

(maximum score of 10 points). If the 


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applicant includes in the application a 

marketing and outreach plan and 

provides a satisfactory discussion of 

each of the following criteria, two points 

for each of the following will be 

awarded: 

(1) The goals of the project; 

(2) Identified need; 

(3) Target beneficiaries; 

(4) Timeline and action plan; and 

(5) Marketing strategies and 

supporting data for strategies. 

(h) Level and commitment of other 

funds for the project (maximum score of 

5 points). 

(1) If the applicant proposes to 

leverage grant funding with 50 percent 

or more in non-State and non-Federal 

government matching funds for the 

subject grant, and has a written 

commitment for those funds, 5 points 

will be awarded. 

(2) If the applicant proposes to 

leverage grant funding with less than 50 

percent but more than 20 percent in 

non-State and non-Federal government 

matching funds for the subject grant, 

and has a written commitment for those 

funds, 2 points will be awarded. 

(3) If the applicant proposes 20 

percent or less in non-State and nonFederal government matching funds, 

zero points will be awarded. 

§ 4280.193 Selecting energy audit and 

renewable energy development assistance 

grant applications for award. 

Applications will be scored by the 

State Offices and submitted to the 

National Office for review. To ensure 

the equitable geographic distribution of 

funds, the two highest scoring 

applications from each State, based on 

the scoring criteria established under 

§ 4280.192 will be submitted to the 

National Office to compete for funding. 

(a) Ranking of applications. All 

applications submitted to the National 

Office will be ranked. All applications 

that are ranked will be considered for 

selection for funding. 

(b) Selection of applications for 

funding. Using the ranking created 

under paragraph (a) of this section, the 

Agency will consider the score an 

application has received compared to 

the scores of other ranked applications, 

with higher scoring applications 

receiving first consideration for funding. 

(c) Funding selected applications. As 

applications are funded, if insufficient 

funds remain to fund the next highest 

scoring application, the Agency may 

elect to fund a lower scoring 

application. Before this occurs, the 

Agency will provide the applicant of the 

higher scoring application the 

opportunity to reduce the amount of its 

grant request to the amount of funds 

available. If the applicant agrees to 

lower its grant request, it must certify 

that the purposes of the project can be 

met, and the Administrator must 

determine the project is financially 

feasible at the lower amount. 

(d) Disposition of ranked applications 

not funded. Based on the availability of 

funding, a ranked application submitted 

under this subpart may not be funded. 

Such ranked applications will not be 

carried forward into Fiscal Year 2012 

and the Agency will notify the applicant 

in writing. 

§ 4280.194 Actions prior to grant closing. 

Applicants expecting funds from 

other sources for use in completing 

projects being partially financed with 

Agency funds must have these funds 

from other such sources prior to grant 

closing. Agency funds will not be 

expended in advance of funds 

committed to the project from other 

sources without prior Agency approval. 

§ 4280.195 Awarding and administering 

energy audit and renewable energy 

development assistance grants. 

Energy audit and renewable energy 

development assistance grants under 

this subpart will be awarded and 

administered in accordance with 

Departmental regulations and with 

paragraphs (a) through (e) of this 

section. 

(a) Letter of conditions. The Agency 

will notify the approved applicant in 

writing, setting out the conditions under 

which the grant will be made. The 

notice will include those matters 

necessary to ensure that the proposed 

grant is completed in accordance with 

the terms of the scope of work and 

budget, that grant funds are expended 

for authorized purposes, and that the 

applicable requirements prescribed in 

the relevant Departmental regulations 

are complied with. The Letter of 

Conditions will be sent to the applicant. 

(b) Applicant’s intent to meet 

conditions. Upon reviewing the 

conditions and requirements in the 

letter of conditions, the applicant must 

complete, sign, and return Form RD 

1942–46 to the Agency; or if certain 

conditions cannot be met, the applicant 

may propose alternate conditions to the 

Agency. The Agency must concur with 

any changes proposed to the Letter of 

Conditions by the applicant before the 

application will be further processed. 

(c) Forms. The forms specified in 

paragraphs (c)(1) through (c)(6) of this 

section will be attached to the letter of 

conditions referenced in paragraph (a) 

of this section. The forms specified in 

paragraphs (c)(1) through (c)(5) of this 

section must be submitted prior to grant 

approval. The form specified in 

paragraph (c)(6), which is to be 

completed by the contractor (if any), 

does not need to be returned to the 

Agency, but must be kept on file. 

(1) Form RD 1942–46. 

(2) Form AD–1047. 

(3) Form AD–1049. 

(4) Either Form SF–LLL or Exhibit A– 

1 of RD Instruction 1940–Q. 

(5) Form RD 400–4. 

(6) Form AD–1048. 

(d) Grant approval. The applicant will 

be sent a copy of the executed Form RD 

1940–1, the approved scope of work, 

and Form RD 4280–2. Form RD 1940– 

1 must be signed by the applicant. 

(e) Grant agreement. Prior to grant 

approval, the applicant must complete, 

sign, and return Form RD 4280–2. The 

grantee must abide by all requirements 

contained in Form RD 4280–2, this 

subpart, and any other applicable 

Federal statutes or regulations. Failure 

to follow these requirements may result 

in termination of the grant and adoption 

of other available remedies. 

§ 4280.196 Servicing energy audit and 

renewable energy development assistance 

grants. 

Energy audit and renewable energy 

development assistance grants will be 

serviced in accordance the requirements 

specified in Departmental regulations, 7 

CFR part 1951, subparts E and O, and 

paragraphs (a) through (n) of this 

section. 

(a) Inspections. Grantees will permit 

periodic inspection of the project 

operations by a representative of the 

Agency. 

(b) Programmatic changes. The 

grantee shall obtain prior Agency 

approval for any change to the scope or 

objectives of the approved project. 

Failure to obtain prior approval of 

changes to the scope of work or budget 

may result in suspension, termination, 

and recovery of grant funds. 

(c) Changes in project cost or scope. 

If there is a significant reduction in 

project cost or changes in project scope, 

the applicant’s funding needs, 

eligibility, and scoring, as applicable, 

will be reassessed. Decreases in Agency 

funds will be based on revised project 

costs and other selection factors; 

however, other factors, including 

Agency regulations used at the time of 

grant approval, will remain the same. 

Obligated grant funds not needed to 

complete the project will be deobligated. 

(d) Transfer of obligations. The 

grantee may request a transfer of 

obligation to a different (substitute) 

grantee. Subject to Agency approval, an 

obligation of funds established for a 


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grantee may be transferred to a 

substitute grantee provided: 

(1) The substituted grantee 

(i) Is eligible; 

(ii) Has a close and genuine 

relationship with the original grantee; 

and 

(iii) Has the authority to receive the 

assistance approved for the original 

grantee; and 

(2) The need, purpose(s), and scope of 

the project for which the Agency funds 

will be used remain substantially 

unchanged. 

(e) Financial management system and 

records. 

(1) The grantee will provide for 

Financial Management Systems that 

will include: 

(i) Accurate, current, and complete 

disclosure of the financial result of each 

grant. 

(ii) Records that identify adequately 

the source and application of funds for 

grant-supporting activities, together 

with documentation to support the 

records. Those records shall contain 

information pertaining to grant awards 

and authorizations, obligations, 

unobligated balances, assets, liabilities, 

outlays, and income. 

(iii) Effective control over and 

accountability for all funds. Grantee 

shall adequately safeguard all such 

assets and shall ensure that funds are 

used solely for authorized purposes. 

(2) The grantee will retain financial 

records, supporting documents, 

statistical records, and all other records 

pertinent to the grant for a period of at 

least 3 years after completion of grant 

activities except that the records shall 

be retained beyond the 3-year period if 

audit findings have not been resolved or 

if directed by the United States. 

Microfilm copies may be substituted in 

lieu of original records. The Agency and 

the Comptroller General of the United 

States, or any of their duly authorized 

representatives, shall have access to any 

books, documents, papers, and records 

of the grantee which are pertinent to the 

specific grant for the purpose of making 

audit, examination, excerpts, and 

transcripts. 

(f) Audit requirements. Grantees must 

provide an annual audit in accordance 

with 7 CFR part 3052. 

(g) Fund disbursement. The Agency 

will determine, based on the applicable 

Departmental regulations, whether 

disbursement of a grant will be by 

advance or reimbursement. A SF–270 

must be completed by the grantee and 

submitted to the Agency no more often 

than monthly to request either advance 

or reimbursement of funds. Upon 

receipt of a properly completed SF–270, 

the funds will be requested through the 

field office terminal system. Ordinarily, 

payment will be made within 30 days 

after receipt of a proper request for 

advance or reimbursement. 

(h) Deobligation of grant funds. Funds 

remaining after all costs incident to the 

project have been paid or provided for 

are subject to deobligation. 

(i) Monitoring of project. Grantees are 

responsible for ensuring that all 

activities are performed within the 

approved scope of work and that funds 

are only used for approved purposes. 

Grantees shall constantly monitor 

performance to ensure that time 

schedules are being met, projected work 

by time periods is being accomplished, 

financial resources are appropriately 

expended by contractors (if applicable), 

and any other performance objectives 

identified in the scope of work are being 

achieved. The Agency will monitor 

grantees to ensure that activities are 

performed in accordance with the 

Agency-approved scope of work and to 

ensure that funds are expended for 

approved purposes. The Agency’s 

monitoring of grantees neither relieves 

the grantee of its responsibilities to 

ensure that activities are performed 

within the scope of work approved by 

the Agency and that funds are expended 

for approved purposes only nor 

provides recourse or a defense to the 

grantee should the grantee conduct 

unapproved activities, engage in 

unethical conduct, engage in activities 

that are or give the appearance of a 

conflict of interest, or expend funds for 

unapproved purposes. 

(j) Federal financial reports. A SF–425 

and a project performance report will be 

required of all grantees on a semiannual 

basis. The grantee will complete the 

project within the total sums available 

to it, including the grant, in accordance 

with the scope of work and any 

necessary modifications thereof 

prepared by grantee and approved by 

the Agency. 

(k) Performance reports. Grantees 

must submit to the Agency, in writing, 

semiannual performance reports and a 

final performance report. Grantees are to 

submit an original of each report to the 

Agency. 

(1) Semiannual performance reports. 

Project performance reports shall 

include, but not be limited to, the 

following: 

(i) A comparison of actual 

accomplishments to the objectives 

established for that period (e.g., the 

number of audits performed, number of 

recipients of renewable energy 

development assistance); 

(ii) A list of recipients, each 

recipient’s location, and each recipient’s 

NAICS code; 

(iii) Problems, delays, or adverse 

conditions, if any, that have in the past 

or will in the future affect attainment of 

overall project objectives, prevent 

meeting time schedules or objectives, or 

preclude the attainment of particular 

project work elements during 

established time periods. This 

disclosure shall be accompanied by a 

statement of the action taken or planned 

to resolve the situation; 

(iv) Percentage of financial resources 

expended on contractors; and 

(v) Objectives and timetable 

established for the next reporting 

period. 

(2) Final performance report. A final 

performance report will be required 

with the final Federal financial report 

within 90 days after project completion. 

In addition to the information required 

under paragraph (k)(1) of this section, 

the final performance report must 

contain the information specified in 

paragraphs (k)(2)(i) and (k)(2)(ii), as 

applicable, of this section. 

(i) For energy audit projects, the final 

performance report must provide 

complete information regarding: 

(A) The number of audits conducted, 

(B) A list of recipients (agricultural 

producers and rural small businesses) 

with each recipient’s North American 

Industry Classification System code, 

(C) The location of each recipient, 

(D) The cost of each audit, 

(E) The expected energy saved for 

each audit conducted if the audit is 

implemented, and 

(F) The percentage of financial 

resources expended on contractors. 

(ii) For renewable energy 

development assistance projects, the 

final performance report must provide 

complete information regarding: 

(A) A list of recipients with each 

recipient’s North American Industry 

Classification System code, 

(B) The location of each recipient, 

(C) The expected renewable energy 

that would be generated if the projects 

were implemented, and 

(D) The percentage of financial 

resources expended on contractors. 

(l) Final status report. One year after 

submittal of the final performance 

report, the grantee will provide the 

Agency a final status report on the 

number of projects that are proceeding 

with one or all of the grantee’s 

recommendations, including the 

amount of energy saved and the amount 

of renewable energy generated, as 

applicable. 

(m) Other reports. The Agency may 

request any additional project and/or 

performance data for the project for 

which grant funds have been received. 

(n) Grant close-out and related 

activities. In addition to the 


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requirements specified in the 

Departmental regulations, failure to 

submit satisfactory reports on time 

under the provisions of paragraphs (i) 

through (m) of this section may result in 

the suspension or termination of a grant. 

The provisions of this section apply to 

grants and sub-grants. 

§§ 4280.197–4280.199 [Reserved] 

§ 4280.200 OMB control numbers. 

The information collection 

requirements contained in the 

regulation have been approved by the 

Office of Management and Budget 

(OMB) and have been assigned OMB 

control numbers 0570–0050, 0570–0059, 

and 0570–0061. A person is not 

required to respond to a collection of 

information unless it displays a 

currently valid OMB control number. 

Appendix A to Subpart B of Part 4280— 

Technical Reports for Projects With 

Total Eligible Project Costs of $200,000 

or Less 

The Technical Report for projects with 

total eligible project costs of $200,000 or less 

must demonstrate that the project design, 

procurement, installation, startup, operation, 

and maintenance of the renewable energy 

system or energy efficiency improvement 

will operate or perform as specified over its 

design life in a reliable and a cost-effective 

manner. The Technical Report must also 

identify all necessary project agreements, 

demonstrate that those agreements will be in 

place, and that necessary project equipment 

and services are available over the design 

life. 

All technical information provided must 

follow the format specified in Sections 1 

through 10 of this appendix. Supporting 

information may be submitted in other 

formats. Design drawings and process 

flowcharts are encouraged as exhibits. A 

discussion of each topic is not necessary if 

the topic is not applicable to the specific 

project. Questions identified in the Agency’s 

technical review of the project must be 

answered to the Agency’s satisfaction before 

the application will be approved. The 

applicant must submit the original technical 

report plus one copy to the Rural 

Development State Office. Depending on the 

level of engineering required for the specific 

project or if necessary to ensure public safety, 

the services of a licensed professional 

engineer or a team of licensed professional 

engineers may be required. 

Section 1. Bioenergy 

The technical requirements specified in 

this section apply to bioenergy projects, 

which are, as defined in § 4280.103, 

renewable system[s] that produce fuel, 

thermal energy, or electric power from a 

biomass source, other than an anaerobic 

digester project. 

(a) Qualifications of key project service 

providers. List all key project service 

providers. If one or more licensed 

professionals are involved in the project, 

provide the credentials for each professional. 

(b) Agreements, permits, and certifications. 

(1) Identify all necessary agreements and 

permits required for the project and the 

status and schedule for securing those 

agreements and permits. 

(2) For systems planning to interconnect 

with a utility, describe the utility’s system 

interconnection requirements, power 

purchase agreements, or licenses where 

required and the anticipated schedule for 

meeting those requirements and obtaining 

those agreements. This is required even if the 

system is installed on the customer side of 

the utility meter. For systems planning to 

utilize a local net metering program as their 

interconnection agreement, describe the 

applicable local net metering program. 

(3) Identify all environmental issues, 

including any compliance issues associated 

with or expected as a result of the project on 

Form RD 1940–20, ‘‘Request for 

Environmental Information,’’ and in 

compliance with 7 CFR part 1940, subpart G 

of this title. 

(c) Resources assessment. Provide adequate 

and appropriate evidence of the availability 

of the renewable resource required for the 

system to operate as designed. Indicate the 

type, quantity, quality, and seasonality of the 

biomass resource, including harvest and 

storage, where applicable. Where applicable, 

indicate shipping or receiving method and 

required infrastructure for shipping. For 

proposed projects with an established 

resource, provide a summary of the resource. 

(d) Design and engineering. Applicants 

must submit a statement certifying that their 

project will be designed and engineered so as 

to meet the intended purpose, will ensure 

public safety, and will comply with 

applicable laws, regulations, agreements, 

permits, codes, and standards. In addition, 

applicants must: 

(1) Provide authoritative evidence that the 

system will be designed and engineered so as 

to meet its intended purpose; 

(2) List possible suppliers and models of 

major pieces of equipment; 

(3) Provide a description of the 

components, materials, or systems to be 

installed. Include the location of the project; 

(4) Provide a one-line diagram for the 

electrical interconnection. Provide diagrams 

or schematics as required showing all major 

installed structural, mechanical, and 

electrical components of the system; 

(5) Describe the expected electric power, 

fuel production, or thermal energy 

production of the proposed system as rated 

and as expected in actual field conditions. 

For systems with a capacity of more than 20 

tons per day of biomass, address performance 

on a monthly and annual basis. For small 

projects such as a commercial biomass 

furnace or pelletizer of up to 5 tons daily 

capacity, proven, commercially available 

devices need not be addressed in detail. 

Describe the uses of or the market for 

electricity, heat, or fuel produced by the 

system; 

(6) Discuss the impact of reduced or 

interrupted biomass availability on the 

system process; and 

(7) Describe the project site and address 

issues such as proximity to the load or the 

electrical grid, unique safety concerns, and 

whether special circumstances exist. 

(e) Project development schedule. Provide 

a project schedule in an appropriate level of 

detail that will demonstrate that the project 

can be adequately managed and be able to 

identify impacts of any delays on the project 

completion. The applicant must submit a 

statement certifying that the project will be 

completed within 2 years from the date of 

approval. 

(f) Project economic assessment. Provide 

an analysis of the proposed project to 

demonstrate its financial performance, 

including the calculation of simple payback. 

The analysis should include applicable 

investment incentives, productivity 

incentives, loans and grants, and expected 

energy offsets or sales on a monthly and 

annual basis. In addition, provide other 

information necessary to assess the project’s 

cost effectiveness. 

(g) Equipment procurement. Include a 

statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. The project 

must be installed in accordance with 

applicable local, State, and national building 

and electrical codes and regulations. Include 

a statement from the applicant certifying that 

equipment installation will be made in 

accordance with all applicable safety and 

work rules. Upon successful system 

installation and following established 

operation, the successful applicant must 

deliver invoices and evidence of payment. 

(i) Operations and maintenance. Identify 

any unique operations and maintenance 

requirements of the project necessary for the 

system to operate as designed over the design 

life. State the design life of the system. 

(1) Provide information on all system 

warranties. A minimum 3-year warranty for 

equipment and a 10-year warranty on design 

are expected. 

(2) If the project has any unique operation 

and maintenance issues, describe them. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. 

Section 2. Anaerobic Digester Projects 

The technical requirements specified in 

this section apply to anaerobic digester 

projects, which are, as defined in § 4280.103, 

renewable energy systems that use animal 

waste and other organic substrates to produce 

thermal or electrical energy via anaerobic 

digestion. 

(a) Qualifications of key project service 

providers. List all key project service 

providers. If one or more licensed 

professionals are involved in the project, 

provide the credentials for each professional. 

(b) Agreements, permits, and certifications. 

(1) Identify all necessary agreements and 

permits required for the project and the 

status and schedule for securing those 

agreements and permits. 

(2) For systems planning to interconnect 

with a utility, describe the utility’s system 


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interconnection requirements, power 

purchase agreements, or licenses where 

required and the anticipated schedule for 

meeting those requirements and obtaining 

those agreements. This is required even if the 

system is installed on the customer side of 

the utility meter. For systems planning to 

utilize a local net metering program as their 

interconnection agreement, describe the 

applicable local net metering program. 

(3) Identify all environmental issues, 

including any compliance issues associated 

with or expected as a result of the project on 

Form RD 1940–20, ‘‘Request for 

Environmental Information,’’ and in 

compliance with 7 CFR part 1940, subpart G 

of this title. 

(c) Resources assessment. Provide adequate 

and appropriate data to demonstrate the 

amount of digestible substrate resource 

available. Indicate the source of the data and 

assumptions. Indicate the substrates used as 

digester inputs, including animal wastes, 

food-processing wastes, or other organic 

wastes in terms of type, quantity, seasonality, 

and frequency of collection. Describe any 

special handling of feedstock that may be 

necessary. Describe the process for 

determining the feedstock resource. Show the 

digestion conversion factors and calculations 

used to estimate biogas production and heat 

or power production. 

(d) Design and engineering. Applicants 

must submit a statement certifying that their 

project will be designed and engineered so as 

to meet the intended purpose, will ensure 

public safety, and will comply with 

applicable laws, regulations, agreements, 

permits, codes, and standards. In addition, 

applicants must: 

(1) Provide authoritative evidence that the 

system will be designed and engineered so as 

to meet its intended purpose; 

(2) List possible suppliers and models of 

major pieces of equipment; 

(3) Provide a description of the 

components, materials, or systems to be 

installed. Include the location of the project; 

(4) Provide a one-line diagram for the 

electrical interconnection. Provide diagrams 

or schematics as required showing all major 

installed structural, mechanical, and 

electrical components of the system; 

(5) Describe the expected electric power, 

fuel production, or thermal energy 

production of the proposed system as rated 

and as expected in actual field conditions. 

Describe the uses of or the market for 

electricity, heat, or fuel produced by the 

system; and 

(6) Describe the project site and address 

issues such as proximity to the load or the 

electrical grid, unique safety concerns, and 

whether special circumstances exist. 

(e) Project development schedule. Provide 

a project schedule in an appropriate level of 

detail that will demonstrate the project can 

be adequately managed and be able to 

identify impacts of any delays on the project 

completion. The applicant must submit a 

statement certifying that the project will be 

completed within 2 years from the date of 

approval. 

(f) Project economic assessment. Provide 

an analysis of the proposed project to 

demonstrate its financial performance, 

including the calculation of simple payback. 

The analysis should include applicable 

investment incentives, productivity 

incentives, loans and grants, and expected 

energy offsets or sales on a monthly and 

annual basis. In addition, provide other 

information necessary to assess the project’s 

cost effectiveness. 

(g) Equipment procurement. Include a 

statement from the applicant certifying ‘‘open 

and free’’ competition will be used for the 

procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. The project 

must be installed in accordance with 

applicable local, State, and national building 

and electrical codes and regulations. Include 

a statement from the applicant certifying that 

equipment installation will be made in 

accordance with all applicable safety and 

work rules. Upon successful system 

installation and following established 

operation, the successful applicant must 

deliver invoices and evidence of payment. 

(i) Operations and maintenance. Identify 

any unique operations and maintenance 

requirements of the project necessary for the 

system to operate as designed over the design 

life. State the design life of the system. 

(1) Provide information on all system 

warranties. A minimum 3-year warranty for 

equipment and a 10-year warranty on design 

are expected. 

(2) If the project has any unique operation 

and maintenance issues, describe them. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. 

Section 3. Geothermal, Electric Generation 

The technical requirements specified in 

this section apply to electric generation 

geothermal projects, which are, as defined in 

§ 4280.103, systems that use geothermal 

energy to produce high pressure steam for 

electric power production. 

(a) Qualifications of key project service 

providers. List all key project service 

providers. If one or more licensed 

professionals are involved in the project, 

provide the credential for each professional. 

(b) Agreements, permits, and certifications. 

(1) Identify all necessary agreements and 

permits required for the project and the 

status and schedule for securing those 

agreements and permits, including any 

permits or agreements required for well 

construction and for disposal or re-injection 

of cooled geothermal waters and the schedule 

for securing those agreements and permits. 

(2) For systems planning to interconnect 

with a utility, describe the utility’s system 

interconnection requirements, power 

purchase agreements, or licenses where 

required and the anticipated schedule for 

meeting those requirements and obtaining 

those agreements. This is required even if the 

system is installed on the customer side of 

the utility meter. For systems planning to 

utilize a local net metering program as their 

interconnection agreement, describe the 

applicable local net metering program. 

(3) Identify all environmental issues, 

including any compliance issues associated 

with or expected as a result of the project on 

Form RD 1940–20, ‘‘Request for 

Environmental Information,’’ and in 

compliance with 7 CFR part 1940, subpart G 

of this title. 

(c) Resources assessment. Provide adequate 

and appropriate evidence of the availability 

of the renewable resource required for the 

system to operate as designed. Indicate the 

quality of the geothermal resource, including 

temperature, flow, and sustainability and 

what conversion system is to be installed. 

Describe any special handling of cooled 

geothermal waters that may be necessary. 

Describe the process for determining the 

geothermal resource, including measurement 

setup for the collection of the geothermal 

resource data. For proposed projects with an 

established resource, provide a summary of 

the resource and the specifications of the 

measurement setup. 

(d) Design and engineering. Applicants 

must submit a statement certifying that their 

project will be designed and engineered so as 

to meet the intended purpose, will ensure 

public safety, and will comply with 

applicable laws, regulations, agreements, 

permits, codes, and standards. In addition, 

applicants must: 

(1) Provide authoritative evidence that the 

system will be designed and engineered so as 

to meet its intended purpose; 

(2) List possible suppliers and models of 

major pieces of equipment; 

(3) Provide a description of the 

components, materials, or systems to be 

installed. Include the location of the project; 

(4) Provide a one-line diagram for the 

electrical interconnection. Provide diagrams 

or schematics as required showing all major 

installed structural, mechanical, and 

electrical components of the system; 

(5) Describe the expected electric power, 

fuel production, or thermal energy 

production of the proposed system as rated 

and as expected in actual field conditions. 

Describe the uses of or the market for 

electricity, heat, or fuel produced by the 

system; and 

(6) Describe the project site and address 

issues such as proximity to the load or the 

electrical grid, unique safety concerns, and 

whether special circumstances exist. 

(e) Project development schedule. Provide 

a project schedule in an appropriate level of 

detail that will demonstrate that the project 

can be adequately managed and be able to 

identify impacts of any delays on the project 

completion. The applicant must submit a 

statement certifying that the project will be 

completed within 2 years from the date of 

approval. 

(f) Project economic assessment. Provide 

an analysis of the proposed project to 

demonstrate its financial performance, 

including the calculation of simple payback. 

The analysis should include applicable 

investment incentives, productivity 

incentives, loans and grants, and expected 

energy offsets or sales on a monthly and 

annual basis. In addition, provide other 

information necessary to assess the project’s 

cost effectiveness. 

(g) Equipment procurement. Include a 

statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 


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Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Rules and Regulations 21149 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. The project 

must be installed in accordance with 

applicable local, State, and national building 

and electrical codes and regulations. Include 

a statement from the applicant certifying that 

equipment installation will be made in 

accordance with all applicable safety and 

work rules. Upon successful system 

installation and following established 

operation, the successful applicant must 

deliver invoices and evidence of payment. 

(i) Operations and maintenance. Identify 

any unique operations and maintenance 

requirements of the project necessary for the 

system to operate as designed over the design 

life. State the design life of the system. 

(1) Provide information on all system 

warranties. A minimum 3-year warranty for 

equipment and a 10-year warranty on design 

are expected. 

(2) If the project has any unique operation 

and maintenance issues, describe them. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. 

Section 4. Geothermal, Direct Use 

The technical requirements specified in 

this section apply to direct use geothermal 

projects, which are, as defined in § 4280.103, 

systems that use thermal energy directly from 

a geothermal source. 

(a) Qualifications of key project service 

providers. List all key project service 

providers. If one or more licensed 

professionals are involved in the project, 

provide the credentials for each professional. 

(b) Agreements, permits, and certifications. 

(1) Identify all necessary agreements and 

permits required for the project and the 

status and schedule for securing those 

agreements and permits, including any 

permits or agreements required for well 

construction and for disposal or re-injection 

of cooled geothermal waters and the schedule 

for securing those agreements and permits. 

(2) Identify all environmental issues, 

including any compliance issues associated 

with or expected as a result of the project on 

Form RD 1940–20, ‘‘Request for 

Environmental Information,’’ and in 

compliance with 7 CFR part 1940, subpart G 

of this title. 

(c) Resources assessment. Provide adequate 

and appropriate evidence of the availability 

of the renewable resource required for the 

system to operate as designed. Indicate the 

quality of the geothermal resource, including 

temperature, flow, and sustainability and 

what direct use system is to be installed. 

Describe any special handling of cooled 

geothermal waters that may be necessary. 

Describe the process for determining the 

geothermal resource, including measurement 

setup for the collection of the geothermal 

resource data. For proposed projects with an 

established resource, provide a summary of 

the resource and the specifications of the 

measurement setup. 

(d) Design and engineering. Applicants 

must submit a statement certifying that their 

project will be designed and engineered so as 

to meet the intended purpose, will ensure 

public safety, and will comply with 

applicable laws, regulations, agreements, 

permits, codes, and standards. In addition, 

applicants must: 

(1) Provide authoritative evidence that the 

system will be designed and engineered so as 

to meet its intended purpose; 

(2) List possible suppliers and models of 

major pieces of equipment; 

(3) Provide a description of the 

components, materials, or systems to be 

installed. Include the location of the project; 

(4) Provide one-line diagram for the 

electrical interconnection. Provide diagrams 

or schematics as required showing all major 

installed structural, mechanical, and 

electrical components of the system; 

(5) Describe the expected thermal energy 

production of the proposed system as rated 

and as expected in actual field conditions. 

Describe the uses of, or the market for, heat 

produced by the system; and 

(6) Describe the project site and address 

issues such as proximity to the load, unique 

safety concerns, and whether special 

circumstances exist. 

(e) Project development schedule. Provide 

a project schedule in an appropriate level of 

detail that will demonstrate the project can 

be adequately managed and be able to 

identify impacts of any delays on the project 

completion. The applicant must submit a 

statement certifying that the project will be 

completed within 2 years from the date of 

approval. 

(f) Project economic assessment. Provide 

an analysis of the proposed project to 

demonstrate its financial performance, 

including the calculation of simple payback. 

The analysis should include applicable 

investment incentives, productivity 

incentives, loans and grants, and expected 

energy offsets or sales on a monthly and 

annual basis. In addition, provide other 

information necessary to assess the project’s 

cost effectiveness. 

(g) Equipment procurement. Include a 

statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. The project 

must be installed in accordance with 

applicable local, State, and national building 

and electrical codes and regulations. Include 

a statement from the applicant certifying that 

equipment installation will be made in 

accordance with all applicable safety and 

work rules. Upon successful system 

installation and following established 

operation, the successful applicant must 

deliver invoices and evidence of payment. 

(i) Operations and maintenance. Identify 

any unique operations and maintenance 

requirements of the project necessary for the 

system to operate as designed over the design 

life. State the design life of the system. 

(1) Provide information on all system 

warranties. A minimum 3-year warranty for 

equipment and a 10-year warranty on design 

are expected. 

(2) If the project has any unique operation 

and maintenance issues, describe them. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. 

Section 5. Hydrogen 

The technical requirements specified in 

this section apply to hydrogen projects, 

which are, as defined in § 4280.103, 

renewable energy systems that produce 

hydrogen, or a renewable energy system that 

uses mechanical or electric power or thermal 

energy from a renewable resource using 

hydrogen as an energy transport medium. 

(a) Qualifications of key project service 

providers. List all key project service 

providers. If one or more licensed 

professionals are involved in the project, 

provide the credentials for each professional. 

(b) Agreements, permits, and certifications. 

(1) Identify all necessary agreements and 

permits required for the project and the 

status and schedule for securing those 

agreements and permits. 

(2) For systems planning to interconnect 

with a utility, describe the utility’s system 

interconnection requirements, power 

purchase agreements, or licenses where 

required and the anticipated schedule for 

meeting those requirements and obtaining 

those agreements. This is required even if the 

system is installed on the customer side of 

the utility meter. For systems planning to 

utilize a local net metering program as their 

interconnection agreement, describe the 

applicable local net metering program. 

(3) Identify all environmental issues, 

including any compliance issues associated 

with or expected as a result of the project on 

Form RD 1940–20, ‘‘Request for 

Environmental Information,’’ and in 

compliance with 7 CFR part 1940, subpart G 

of this title. 

(c) Resources assessment. Provide adequate 

and appropriate data to demonstrate the type, 

quantity, quality, and seasonality of the local 

renewable resource that will be used to 

produce the hydrogen. 

(d) Design and engineering. Applicants 

must submit a statement certifying that their 

project will be designed and engineered so as 

to meet the intended purpose, will ensure 

public safety, and will comply with 

applicable laws, regulations, agreements, 

permits, codes, and standards. In addition, 

applicants must: 

(1) Provide authoritative evidence that the 

system will be designed and engineered so as 

to meet its intended purpose; 

(2) List possible suppliers and models of 

major pieces of equipment; 

(3) Provide a description of the 

components, materials, or systems to be 

installed. Include the location of the project; 

(4) Provide a one-line diagram for the 

electrical interconnection. Provide diagrams 

or schematics as required showing all major 

installed structural, mechanical, and 

electrical components of the system; and 

(5) Describe the project site and address 

issues such as proximity to the load or the 

electrical grid, unique safety concerns, and 

whether special circumstances exist. 

(e) Project development schedule. Provide 

a project schedule in an appropriate level of 


sroberts on DSK69SOYB1PROD with RULES
21150 Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Rules and Regulations 

detail that will demonstrate the project can 

be adequately managed and be able to 

identify impacts of any delays on the project 

completion. The applicant must submit a 

statement certifying that the project will be 

completed within 2 years from the date of 

approval. 

(f) Project economic assessment. Provide 

an analysis of the proposed project to 

demonstrate its financial performance, 

including the calculation of simple payback. 

The analysis should include applicable 

investment incentives, productivity 

incentives, loans and grants, and expected 

energy offsets or sales on a monthly and 

annual basis. In addition, provide other 

information necessary to assess the project’s 

cost effectiveness. 

(g) Equipment procurement. Include a 

statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. The project 

must be installed in accordance with 

applicable local, State, and national building 

and electrical codes and regulations. Include 

a statement from the applicant certifying that 

equipment installation will be made in 

accordance with all applicable safety and 

work rules. Upon successful system 

installation and following established 

operation, the successful applicant must 

deliver invoices and evidence of payment. 

(i) Operations and maintenance. Identify 

any unique operations and maintenance 

requirements of the project necessary for the 

system to operate as designed over the design 

life. State the design life of the system. 

(1) Provide information on all system 

warranties. A minimum 3-year warranty for 

equipment and a 10-year warranty on design 

are expected. 

(2) If the project has any unique operation 

and maintenance issues, describe them. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. 

Section 6. Solar, Small 

The technical requirements specified in 

this section apply to small solar electric 

projects and small solar thermal projects, as 

defined in § 4280.103. 

Small solar electric projects are those for 

which the rated power of the system is 10kW 

or smaller. Small solar electric projects are 

either stand-alone (off grid) or interconnected 

to the grid at less than 600 volts (on grid). 

Small solar thermal projects are those for 

which the rated storage volume of the system 

is 240 gallons or smaller, or which have a 

collector area of 1,000 square feet or less. 

(a) Qualifications of key project service 

providers. List all key project service 

providers. If one or more licensed 

professionals are involved in the project, 

provide the credentials for each professional. 

(b) Agreements, permits, and certifications. 

(1) Identify all necessary agreements and 

permits required for the project and the 

status and schedule for securing those 

agreements and permits. 

(2) For systems planning to interconnect 

with a utility, describe the utility’s system 

interconnection requirements, power 

purchase agreements, or licenses where 

required and the anticipated schedule for 

meeting those requirements and obtaining 

those agreements. This is required even if the 

system is installed on the customer side of 

the utility meter. For systems planning to 

utilize a local net metering program as their 

interconnection agreement, describe the 

applicable local net metering program. 

(3) Identify all environmental issues, 

including any compliance issues associated 

with or expected as a result of the project on 

Form RD 1940–20, ‘‘Request for 

Environmental Information,’’ and in 

compliance with 7 CFR part 1940, subpart G 

of this title. 

(c) Resources assessment. Provide adequate 

and appropriate data to demonstrate the 

amount of solar resource available. Indicate 

the source of the solar data and assumptions. 

(d) Design and engineering. Applicants 

must submit a statement certifying that their 

project will be designed and engineered so as 

to meet the intended purpose, will ensure 

public safety, and will comply with 

applicable laws, regulations, agreements, 

permits, codes, and standards. In addition, 

applicants must: 

(1) Provide authoritative evidence that the 

system will be designed and engineered so as 

to meet its intended purpose; 

(2) List possible suppliers and models of 

major pieces of equipment; 

(3) Provide a description of the 

components, materials, or systems to be 

installed. Include the location of the project; 

(4) Provide a one-line diagram for the 

electrical interconnection. Provide diagrams 

or schematics as required showing all major 

installed structural, mechanical, and 

electrical components of the system; and 

(5) Describe the project site and address 

issues such as solar access, orientation, 

proximity to the load or the electrical grid, 

unique safety concerns, and whether special 

circumstances exist. 

(e) Project development schedule. Provide 

a project schedule in an appropriate level of 

detail that will demonstrate that the project 

can be adequately managed and be able to 

identify impacts of any delays on the project 

completion. The applicant must submit a 

statement certifying that the project will be 

completed within 2 years from the date of 

approval. 

(f) Project economic assessment. Provide 

an analysis of the proposed project to 

demonstrate its financial performance, 

including the calculation of simple payback. 

The analysis should include applicable 

investment incentives, productivity 

incentives, loans and grants, and expected 

energy offsets or sales on a monthly and 

annual basis. In addition, provide other 

information necessary to assess the project’s 

cost effectiveness. 

(g) Equipment procurement. Include a 

statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. The project 

must be installed in accordance with 

applicable local, State, and national building 

and electrical codes and regulations. Include 

a statement from the applicant certifying that 

equipment installation will be made in 

accordance with all applicable safety and 

work rules. Upon successful system 

installation and following established 

operation, the successful applicant must 

deliver invoices and evidence of payment. 

(i) Operations and maintenance. Identify 

any unique operations and maintenance 

requirements of the project necessary for the 

system to operate as designed over the design 

life. State the design life of the system. 

(1) Provide information on all system 

warranties. A minimum 3-year warranty for 

equipment and a 10-year warranty on design 

are expected. 

(2) If the project has any unique operation 

and maintenance issues, describe them. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. 

Section 7. Solar, Large 

The technical requirements specified in 

this section apply to large solar electric 

projects and large solar thermal projects, as 

defined in § 4280.103. 

Large solar electric systems are those for 

which the rated power of the system is larger 

than 10kW. Large solar electric systems are 

either stand-alone (off grid) or interconnected 

to the grid (on grid). 

Large solar thermal systems are those for 

which the rated storage volume of the system 

is greater than 240 gallons or that have a 

collector area of more than 1,000 square feet. 

(a) Qualifications of key project service 

providers. List all key project service 

providers. If one or more licensed 

professionals are involved in the project, 

provide the credential for each professional. 

(b) Agreements, permits, and certifications. 

(1) Identify all necessary agreements and 

permits required for the project and the 

status and schedule for securing those 

agreements and permits. 

(2) For systems planning to interconnect 

with a utility, describe the utility’s system 

interconnection requirements, power 

purchase agreements, or licenses where 

required and the anticipated schedule for 

meeting those requirements and obtaining 

those agreements. This is required even if the 

system is installed on the customer side of 

the utility meter. For systems planning to 

utilize a local net metering program as their 

interconnection agreement, describe the 

applicable local net metering program. 

(3) Identify all environmental issues, 

including any compliance issues associated 

with or expected as a result of the project on 

Form RD 1940–20, ‘‘Request for 

Environmental Information,’’ and in 

compliance with 7 CFR part 1940, subpart G 

of this title. 

(c) Resources assessment. Provide adequate 

and appropriate data to demonstrate the 

amount of solar resource available. Indicate 

the source of the solar data and assumptions. 

(d) Design and engineering. Applicants 

must submit a statement certifying that their 

project will be designed and engineered so as 


sroberts on DSK69SOYB1PROD with RULES
Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Rules and Regulations 21151 

to meet the intended purpose, will ensure 

public safety, and will comply with 

applicable laws, regulations, agreements, 

permits, codes, and standards. In addition, 

applicants must: 

(1) Provide authoritative evidence that the 

system will be designed and engineered so as 

to meet its intended purpose; 

(2) List possible suppliers and models of 

major pieces of equipment; 

(3) Provide a description of the 

components, materials, or systems to be 

installed. Include the location of the project; 

(4) Provide a one-line diagram for the 

electrical interconnection. Provide diagrams 

or schematics as required showing all major 

installed structural, mechanical, and 

electrical components of the system; and 

(5) Describe the project site and address 

issues such as solar access, orientation, 

proximity to the load or the electrical grid, 

unique safety concerns, and whether special 

circumstances exist. 

(e) Project development schedule. Provide 

a project schedule in an appropriate level of 

detail that will demonstrate the project can 

be adequately managed and be able to 

identify impacts of any delays on the project 

completion. The applicant must submit a 

statement certifying that the project will be 

completed within 2 years from the date of 

approval. 

(f) Project economic assessment. Provide 

an analysis of the proposed project to 

demonstrate its financial performance, 

including the calculation of simple payback. 

The analysis should include applicable 

investment incentives, productivity 

incentives, loans and grants, and expected 

energy offsets or sales on a monthly and 

annual basis. In addition, provide other 

information necessary to assess the project’s 

cost effectiveness. 

(g) Equipment procurement. Include a 

statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. The project 

must be installed in accordance with 

applicable local, State, and national building 

and electrical codes and regulations. Include 

a statement from the applicant certifying that 

equipment installation will be made in 

accordance with all applicable safety and 

work rules. Upon successful system 

installation and following established 

operation, the successful applicant must 

deliver invoices and evidence of payment. 

(i) Operations and maintenance. Identify 

any unique operations and maintenance 

requirements of the project necessary for the 

system to operate as designed over the design 

life. State the design life of the system. 

(1) Provide information on all system 

warranties. A minimum 3-year warranty for 

equipment and a 10-year warranty on design 

are expected. 

(2) If the project has any unique operation 

and maintenance issues, describe them. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. 

Section 8. Wind, Small 

The technical requirements specified in 

this section apply to small wind systems, 

which are, as defined in § 4280.103, wind 

energy systems for which the rated power of 

the wind turbine is 100kW or smaller and 

with a generator hub height of 120 feet or 

less. Small wind systems are either standalone or connected to the local electrical 

system at less than 600 volts. 

(a) Qualifications of key project service 

providers. List all key project service 

providers. If one or more licensed 

professionals are involved in the project, 

provide the credentials for each professional. 

(b) Agreements, permits, and certifications. 

(1) Identify all necessary agreements and 

permits required for the project and the 

status and schedule for securing those 

agreements and permits. 

(2) For systems planning to interconnect 

with a utility, describe the utility’s system 

interconnection requirements, power 

purchase agreements, or licenses where 

required and the anticipated schedule for 

meeting those requirements and obtaining 

those agreements. This is required even if the 

system is installed on the customer side of 

the utility meter. For systems planning to 

utilize a local net metering program as their 

interconnection agreement, describe the 

applicable local net metering program. 

(3) Identify all environmental issues, 

including any compliance issues associated 

with or expected as a result of the project on 

Form RD 1940–20, ‘‘Request for 

Environmental Information,’’ and in 

compliance with 7 CFR part 1940, subpart G 

of this title. 

(c) Resources assessment. Provide adequate 

and appropriate data to demonstrate the 

amount of local wind resource where the 

small wind turbine is to be installed. Indicate 

the source of the wind data and assumptions. 

(d) Design and engineering. Applicants 

must certify that their project will be 

designed and engineered so as to meet the 

intended purpose, will ensure public safety, 

and will comply with applicable laws, 

regulations, agreements, permits, codes, and 

standards. In addition, applicants must: 

(1) Provide authoritative evidence that the 

system will be designed and engineered so as 

to meet its intended purpose; 

(2) List possible suppliers and models of 

major pieces of equipment; 

(3) Provide a description of the 

components, materials, or systems to be 

installed. Include the location of the project; 

(4) Provide a one-line diagram for the 

electrical interconnection. Provide diagrams 

or schematics as required showing all major 

installed structural, mechanical, and 

electrical components of the system; and 

(5) Describe the project site and address 

issues such as proximity to the load or the 

electrical grid, unique safety concerns, and 

whether special circumstances exist. 

(e) Project development schedule. Provide 

a project schedule in an appropriate level of 

detail that will demonstrate the project can 

be adequately managed and be able to 

identify impacts of any delays on the project 

completion. The applicant must submit a 

statement certifying that the project will be 

completed within 2 years from the date of 

approval. 

(f) Project economic assessment. Provide 

an analysis of the proposed project to 

demonstrate its financial performance, 

including the calculation of simple payback. 

The analysis should include applicable 

investment incentives, productivity 

incentives, loans and grants, and expected 

energy offsets or sales on a monthly and 

annual basis. In addition, provide other 

information necessary to assess the project’s 

cost effectiveness. 

(g) Equipment procurement. Include a 

statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. The project 

must be installed in accordance with 

applicable local, State, and national building 

and electrical codes and regulations. Include 

a statement from the applicant certifying that 

equipment installation will be made in 

accordance with all applicable safety and 

work rules. Upon successful system 

installation and following established 

operation, the successful applicant must 

deliver invoices and evidence of payment. 

(i) Operations and maintenance. Identify 

any unique operations and maintenance 

requirements of the project necessary for the 

system to operate as designed over the design 

life. State the design life of the system. 

(1) Provide information on all system 

warranties. A minimum 3-year warranty for 

equipment and a 10-year warranty on design 

are expected. 

(2) If the project has any unique operation 

and maintenance issues, describe them. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. 

Section 9. Wind, Large 

The technical requirements specified in 

this section apply to large wind systems, 

which are, as defined in § 4280.103, wind 

energy projects for which the rated power of 

the individual wind turbine(s) is larger than 

100kW. 

(a) Qualifications of key project service 

providers. List all key project service 

providers. If one or more licensed 

professionals are involved in the project, 

provide the credentials for each professional. 

(b) Agreements, permits, and certifications. 

(1) Identify all necessary agreements and 

permits required for the project and the 

status and schedule for securing those 

agreements and permits. 

(2) For systems planning to interconnect 

with a utility, describe the utility’s system 

interconnection requirements, power 

purchase agreements, or licenses where 

required and the anticipated schedule for 

meeting those requirements and obtaining 

those agreements. This is required even if the 

system is installed on the customer side of 

the utility meter. For systems planning to 

utilize a local net metering program as their 

interconnection agreement, describe the 

applicable local net metering program. 

(3) Identify all environmental issues, 

including any compliance issues associated 


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with or expected as a result of the project on 

Form RD 1940–20, ‘‘Request for 

Environmental Information,’’ and in 

compliance with 7 CFR part 1940, subpart G 

of this title. 

(c) Resources assessment. Provide adequate 

and appropriate data to demonstrate the 

amount of local wind resource where the 

large wind turbine is to be installed. Indicate 

the source of the wind data and assumptions. 

Projects greater than 500kW must obtain 

wind data from the proposed project site. For 

such projects, describe the proposed 

measurement setup for the collection of the 

wind resource data. For proposed projects 

with an established wind resource, provide a 

summary of the wind resource and the 

specifications of the measurement setup. 

Large wind systems larger than 500kW in 

size will typically require at least 1 year of 

on-site monitoring. If less than 1 year of data 

is used, the qualified meteorological 

consultant must provide a detailed analysis 

of correlation between the site data and a 

nearby long-term measurement site. 

(d) Design and engineering. Applicants 

must submit a statement certifying that their 

project will be designed and engineered so as 

to meet the intended purpose, will ensure 

public safety, and will comply with 

applicable laws, regulations, agreements, 

permits, codes, and standards. In addition, 

applicants must: 

(1) Provide authoritative evidence that the 

system will be designed and engineered so as 

to meet its intended purpose; 

(2) List possible suppliers and models of 

major pieces of equipment; 

(3) Provide a description of the 

components, materials, or systems to be 

installed. Include the location of the project; 

(4) Provide one-line diagram for the 

electrical interconnection. Provide diagrams 

or schematics as required showing all major 

installed structural, mechanical, and 

electrical components of the system; and 

(5) Describe the project site and address 

issues such as proximity to the load or the 

electrical grid, unique safety concerns, and 

whether special circumstances exist. 

(e) Project development schedule. Provide 

a project schedule in an appropriate level of 

detail that will demonstrate the project can 

be adequately managed and be able to 

identify impacts of any delays on the project 

completion. The applicant must submit a 

statement certifying that the project will be 

completed within 3 years from the date of 

approval. 

(f) Project economic assessment. Provide 

an analysis of the proposed project to 

demonstrate its financial performance, 

including the calculation of simple payback. 

The analysis should include applicable 

investment incentives, productivity 

incentives, loans and grants, and expected 

energy offsets or sales on a monthly and 

annual basis. In addition, provide other 

information necessary to assess the project’s 

cost effectiveness. 

(g) Equipment procurement. Include a 

statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. The project 

must be installed in accordance with 

applicable local, State, and national building 

and electrical codes and regulations. Include 

a statement from the applicant certifying that 

equipment installation will be made in 

accordance with all applicable safety and 

work rules. Upon successful system 

installation and following established 

operation, the successful applicant must 

deliver invoices and evidence of payment. 

(i) Operations and maintenance. Identify 

any unique operations and maintenance 

requirements of the project necessary for the 

system to operate as designed over the design 

life. State the design life of the system. 

(1) Provide information on all system 

warranties. A minimum 3-year warranty for 

equipment and a 10-year warranty on design 

are expected. 

(2) If the project has any unique operation 

and maintenance issues, describe them. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. 

Section 10. Energy Efficiency Improvements 

The technical requirements specified in 

this section apply to energy efficiency 

improvement projects, which are, as defined 

in § 4280.103, improvements to a facility, 

building, or process that reduce energy 

consumption, or reduce energy consumed 

per square foot. 

(a) Qualifications of key project service 

providers. List all key project service 

providers. If one or more licensed 

professionals are involved in the project, 

provide the credentials for each professional. 

For projects with total eligible project costs 

greater than $50,000, also discuss the 

qualifications of the energy auditor, 

including any relevant certifications by 

recognized organizations or bodies. 

(b) Agreements, permits, and certifications. 

(1) The applicant must certify that they 

will comply with all necessary agreements 

and permits required for the project. Indicate 

the status and schedule for securing those 

agreements and permits. 

(2) Identify all environmental issues, 

including any compliance issues associated 

with or expected as a result of the project on 

Form RD 1940–20, ‘‘Request for 

Environmental Information,’’ and in 

compliance with 7 CFR part 1940, subpart G 

of this title. 

(c) Energy assessment and audits. For all 

energy efficiency improvement projects, 

provide adequate and appropriate evidence 

of energy savings expected when the system 

is operated as designed. 

(1) For energy efficiency improvement 

projects with total eligible project costs 

greater than $50,000, an energy audit must be 

conducted. An energy audit is a written 

report by an independent, qualified party 

that documents current energy usage, 

recommended potential improvements and 

their costs, energy savings from these 

improvements, dollars saved per year, and 

simple payback. The methodology of the 

energy audit must meet professional and 

industry standards. 

(2) The energy assessment or energy audit 

must cover the following: 

(i) Situation report. Provide a narrative 

description of the facility or process, its 

energy system(s) and usage, and activity 

profile. Also include price per unit of energy 

(electricity, natural gas, propane, fuel oil, 

renewable energy, etc.,) paid by the customer 

on the date of the assessment or audit. Any 

energy conversion should be based on use 

rather than source. 

(ii) Potential improvements. List specific 

information on all potential energy-saving 

opportunities and the associated costs. 

(iii) Technical analysis. Discuss the 

interactions of the potential improvements 

with existing energy systems. 

(A) Estimate the annual energy and energy 

costs savings expected from each 

improvement identified in the potential 

project. 

(B) Calculate all direct and attendant 

indirect costs of each improvement. 

(C) Rank potential improvement measures 

by cost-effectiveness. 

(iv) Potential improvement description. 

Provide a narrative summary of the potential 

improvement and its ability to provide 

needed benefits, including a discussion of 

non-energy benefits such as project reliability 

and durability. 

(A) Provide preliminary specifications for 

critical components. 

(B) Provide preliminary drawings of project 

layout, including any related structural 

changes. 

(C) Document baseline data compared to 

projected consumption, together with any 

explanatory notes. Provide the actual total 

quantity of energy used (BTU)in the original 

building and/or equipment in the 12 months 

prior to the EEI project and the projected 

energy usage after the EEI project shall be the 

projected total quantity of energy used (BTU) 

on an annual basis for the same size or 

capacity as the original building or 

equipment. For energy efficiency 

improvement to equipment, if the new piece 

of equipment has a different capacity than 

the piece of equipment being replaced, the 

projected total quantity of energy used for the 

new piece of equipment shall be adjusted 

based on the ratio of the capacity of the 

replaced piece of equipment to the capacity 

of the new piece of equipment in accordance 

with the regulation. When appropriate, show 

before-and-after data in terms of 

consumption per unit of production, time or 

area. Include at least 1 year’s bills for those 

energy sources/fuel types affected by this 

project. Also submit utility rate schedules, if 

appropriate. 

(D) Identify significant changes in future 

related operations and maintenance costs. 

(E) Describe explicitly how outcomes will 

be measured. 

(d) Design and engineering. The applicant 

must submit a statement certifying that their 

project will be designed and engineered so as 

to meet the intended purpose, will ensure 

public safety, and will comply with 

applicable laws, regulations, agreements, 

permits, codes, and standards. 

(1) Identify possible suppliers and models 

of major pieces of equipment. 


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(2) Describe the components, materials, or 

systems to be installed. Include the location 

of the project. 

(e) Project development schedule. Provide 

a project schedule in an appropriate level of 

detail that will demonstrate the project can 

be adequately managed. The applicant must 

submit a statement certifying that the project 

will be completed within 2 years from the 

date of approval. 

(f) Project economic assessment. For 

projects with total eligible project costs 

greater than $50,000, provide an analysis of 

the proposed project to demonstrate its 

financial performance, including the 

calculation of simple payback. The analysis 

should include applicable investment 

incentives, productivity incentives, loans and 

grants, and expected energy offsets or sales 

on a monthly and annual basis. In addition, 

provide other information necessary to assess 

the project’s cost effectiveness. 

(g) Equipment procurement. Include a 

statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. The project 

must be installed in accordance with 

applicable local, State, and national building 

and electrical codes and regulations. Include 

a statement from the applicant certifying that 

equipment installation will be made in 

accordance with all applicable safety and 

work rules. Upon successful system 

installation and following established 

operation, the successful applicant must 

deliver invoices and evidence of payment. 

(i) Operations and maintenance. Identify 

any unique operations and maintenance 

requirements of the project necessary for the 

improvement(s) to perform as designed over 

the design life. State the design life of the 

improvement(s). Provide information 

regarding component warranties. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and proper disposal of the project 

components and associated wastes at the end 

of their useful lives. 

Appendix B to Subpart B of Part 4280— 

Technical Reports for Projects With 

Total Eligible Project Costs of Greater 

Than $200,000 

The Technical Report for projects with 

total eligible project costs greater than 

$200,000 (and for any other project that must 

submit a Technical Report under this 

appendix) must demonstrate that the project 

design, procurement, installation, startup, 

operation, and maintenance of the renewable 

energy system or energy efficiency 

improvement will operate or perform as 

specified over its design life in a reliable and 

a cost-effective manner. The Technical 

Report must also identify all necessary 

project agreements, demonstrate that those 

agreements will be in place, and that 

necessary project equipment and services are 

available over the design life. 

All technical information provided must 

follow the format specified in Sections 1 

through 10 of this appendix. Supporting 

information may be submitted in other 

formats. Design drawings and process 

flowcharts are encouraged as exhibits. A 

discussion of each topic is not necessary if 

the topic is not applicable to the specific 

project. Questions identified in the Agency’s 

technical review of the project must be 

answered to the Agency’s satisfaction before 

the application will be approved. The 

applicant must submit the original technical 

report plus one copy to the Rural 

Development State Office. Renewable energy 

projects with total eligible project costs 

greater than $400,000 and for energy 

efficiency improvement projects with total 

eligible project costs greater than $200,000 

require the services of a licensed professional 

engineer (PE) or team of PEs. Depending on 

the level of engineering required for the 

specific project or if necessary to ensure 

public safety, the services of a licensed PE or 

a team of licensed PEs may be required for 

smaller projects. 

Section 1. Bioenergy 

The technical requirements specified in 

this section apply to bioenergy projects, 

which are, as defined in § 4280.103, 

renewable energy systems that produces fuel, 

thermal energy, or electric power from a 

renewable biomass source only, other than an 

anaerobic digester project. 

(a) Qualifications of project team. The 

bioenergy project team will vary according to 

the complexity and scale of the project. For 

engineered systems, the project team should 

consist of a system designer, a project 

manager, an equipment supplier, a project 

engineer, a construction contractor or system 

installer, and a system operator and 

maintainer. One individual or entity may 

serve more than one role. The project team 

must have demonstrated expertise in similar 

bioenergy systems development, engineering, 

installation, and maintenance. Authoritative 

evidence that project team service providers 

have the necessary professional credentials 

or relevant experience to perform the 

required services must be provided. 

Authoritative evidence that vendors of 

proprietary components can provide 

necessary equipment and spare parts for the 

system to operate over its design life must 

also be provided. The application must: 

(1) Discuss the proposed project delivery 

method. Such methods include a design, bid, 

build where a separate engineering firm may 

design the project and prepare a request for 

bids and the successful bidder constructs the 

project at the applicant’s risk, and a design/ 

build method, often referred to as turnkey, 

where the applicant establishes the 

specifications for the project and secures the 

services of a developer who will design and 

build the project at the developer’s risk; 

(2) Discuss the bioenergy system 

equipment manufacturers of major 

components being considered in terms of the 

length of time in business and the number of 

units installed at the capacity and scale being 

considered; 

(3) Discuss the project manager, equipment 

supplier, system designer, project engineer, 

and construction contractor qualifications for 

engineering, designing, and installing 

bioenergy systems, including any relevant 

certifications by recognized organizations. 

Provide a list of the same or similar projects 

designed, installed, or supplied and currently 

operating with references, if available; and 

(4) Describe the system operator’s 

qualifications and experience for servicing, 

operating, and maintaining bioenergy 

renewable energy equipment or projects. 

Provide a list of the same or similar projects 

designed, installed, or supplied and currently 

operating with references, if available. 

(b) Agreements, permits, and certifications. 

Identify all necessary agreements and permits 

required for the project and the status and 

schedule for securing those agreements and 

permits, including the items specified in 

paragraphs (b)(1) through (8). 

(1) Identify zoning and code issues, and 

required permits and the anticipated 

schedule for meeting those requirements and 

securing those permits. 

(2) Identify licenses where required and 

the schedule for obtaining those licenses. 

(3) Identify land use agreements required 

for the project and the anticipated schedule 

for securing the agreements and the term of 

those agreements. 

(4) Identify any permits or agreements 

required for solid, liquid, and gaseous 

emissions or effluents and the schedule for 

securing those permits and agreements. 

(5) Identify available component 

warranties for the specific project location 

and size. 

(6) For systems planning to interconnect 

with a utility, describe the utility’s system 

interconnection requirements, power 

purchase agreements, or licenses where 

required and the anticipated schedule for 

meeting those requirements and obtaining 

those agreements. This is required even if the 

system is installed on the customer side of 

the utility meter. For systems planning to 

utilize a local net metering program as their 

interconnection agreement, describe the 

applicable local net metering program. 

(7) Identify all environmental issues, 

including environmental compliance issues, 

associated with the project on Form RD 

1940–20, ‘‘Request for Environmental 

Information,’’ and in compliance with 7 CFR 

part 1940, subpart G of this title. 

(8) Submit a statement certifying that the 

project will be installed in accordance with 

applicable local, State, and national codes 

and regulations. 

(c) Resources assessment. Provide adequate 

and appropriate data to demonstrate the 

amount of renewable resource available. 

Indicate the type, quantity, quality, and 

seasonality of the biomass resource, 

including harvest and storage, where 

applicable. Where applicable, also indicate 

shipping or receiving method and required 

infrastructure for shipping. For proposed 

projects with an established resource, 

provide a summary of the resource. 

(d) Design and engineering. Provide 

authoritative evidence that the system will be 

designed and engineered so as to meet its 

intended purpose, will ensure public safety, 

and will comply with applicable laws, 

regulations, agreements, permits, codes, and 

standards. Projects shall be engineered by a 

qualified party. Systems must be engineered 

as a complete, integrated system with 

matched components. The engineering must 


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be comprehensive, including site selection, 

system and component selections, and 

system monitoring equipment. Systems must 

be constructed by a qualified party. 

(1) Provide a concise but complete 

description of the bioenergy project, 

including location of the project, resource 

characteristics, system specifications, electric 

power system interconnection, and 

monitoring equipment. Identify possible 

vendors and models of major system 

components. Describe the expected electric 

power, fuel production, or thermal energy 

production of the proposed system as rated 

and as expected in actual field conditions. 

For systems with a capacity of more than 20 

tons per day of biomass, address performance 

on a monthly and annual basis. For small 

projects such as a commercial biomass 

furnace or pelletizer of up to 5 tons daily 

capacity, proven, commercially available 

devices need not be addressed in detail. 

Describe the uses of or the market for 

electricity, heat, or fuel produced by the 

system. Discuss the impact of reduced or 

interrupted biomass availability on the 

system process. 

(2) Describe the project site and address 

issues such as site access, foundations, 

backup equipment when applicable, and 

environmental concerns with emphasis on 

land use, air quality, water quality, soil 

degradation, habitat fragmentation, land use, 

visibility, odor, noise, construction, and 

installation issues. Identify any unique 

construction and installation issues. 

(e) Project development schedule. Identify 

each significant task, its beginning and end, 

and its relationship to the time needed to 

initiate and carry the project through startup 

and shakedown. Provide a detailed 

description of the project timeline, including 

resource assessment, system and site design, 

permits and agreements, equipment 

procurement, and system installation from 

excavation through startup and shakedown. 

(f) Project economic assessment. Provide a 

study that describes the costs and revenues 

of the proposed project to demonstrate the 

financial performance of the project, 

including the calculation of simple payback. 

Provide a detailed analysis and description of 

project costs, including project management, 

resource assessment, project design, project 

permitting, land agreements, equipment, site 

preparation, system installation, startup and 

shakedown, warranties, insurance, financing, 

professional services, and operations and 

maintenance costs. Provide a detailed 

analysis and description of annual project 

revenues and expenses. Provide a detailed 

description of applicable investment 

incentives, productivity incentives, loans, 

and grants. In addition, provide other 

information necessary to assess the project’s 

cost effectiveness. 

(g) Equipment procurement. Demonstrate 

that equipment required by the system is 

available and can be procured and delivered 

within the proposed project development 

schedule. Bioenergy systems may be 

constructed of components manufactured in 

more than one location. Provide a description 

of any unique equipment procurement issues 

such as scheduling and timing of component 

manufacture and delivery, ordering, 

warranties, shipping, receiving, and on-site 

storage or inventory. Identify all the major 

equipment that is proprietary and justify how 

this unique equipment is needed to meet the 

requirements of the proposed design. Include 

a statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. Fully describe 

the management of and plan for site 

development and system installation, 

provide details regarding the scheduling of 

major installation equipment needed for 

project construction, and provide a 

description of the startup and shakedown 

specifications and process and the conditions 

required for startup and shakedown for each 

equipment item individually and for the 

system as a whole. Include a statement from 

the applicant certifying that equipment 

installation will be made in accordance with 

all applicable safety and work rules. 

(i) Operations and maintenance. Identify 

the operations and maintenance 

requirements of the system necessary for the 

system to operate as designed over the design 

life. In addition: 

(1) Provide information regarding available 

system and component warranties and 

availability of spare parts; 

(2) Describe the routine operations and 

maintenance requirements of the proposed 

system, including maintenance schedule for 

the mechanical, piping, and electrical 

systems and system monitoring and control 

requirements. Provide information that 

supports expected design life of the system 

and timing of major component replacement 

or rebuilds. Discuss the costs and labor 

associated with the operation and 

maintenance of the system, and plans for insourcing or out-sourcing. Describe 

opportunities for technology transfer for 

long-term project operations and 

maintenance by a local entity or owner/ 

operator; and 

(3) For systems having a biomass input 

capacity exceeding 10 tons of biomass per 

day, provide and discuss the risk 

management plan for handling large, 

potential failures of major components. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. Describe the budget for and any unique 

concerns associated with the dismantling and 

disposal of project components and their 

wastes. 

Section 2. Anaerobic Digester Projects 

The technical requirements specified in 

this section apply to anaerobic digester 

projects, which are, as defined in § 4280.103, 

renewable energy systems that use animal or 

other waste and may include other organic 

substrates to produce biofuel, biogas, 

thermal, or electrical energy via anaerobic 

digestion. 

(a) Qualifications of project team. The 

anaerobic digester project team should 

consist of a system designer, a project 

manager, an equipment supplier, a project 

engineer, a construction contractor, and a 

system operator or maintainer. One 

individual or entity may serve more than one 

role. The project team must have 

demonstrated commercial-scale expertise in 

anaerobic digester systems development, 

engineering, installation, and maintenance as 

related to the organic materials and operating 

mode of the system. Authoritative evidence 

that project team service providers have the 

necessary professional credentials or relevant 

experience to perform the required services 

must be provided. Authoritative evidence 

that vendors of proprietary components can 

provide necessary equipment and spare parts 

for the system to operate over its design life 

must also be provided. The application must: 

(1) Discuss the proposed project delivery 

method. Such methods include a design, bid, 

build where a separate engineering firm may 

design the project and prepare a request for 

bids and the successful bidder constructs the 

project at the applicant’s risk, and a design/ 

build method, often referred to as turnkey, 

where the applicant establishes the 

specifications for the project and secures the 

services of a developer who will design and 

build the project at the developer’s risk; 

(2) Discuss the anaerobic digester system 

equipment manufacturers of major 

components being considered in terms of the 

length of time in business and the number of 

units installed at the capacity and scale being 

considered; 

(3) Discuss the project manager, equipment 

supplier, system designer, project engineer, 

and construction contractor qualifications for 

engineering, designing, and installing 

anaerobic digester systems, including any 

relevant certifications by recognized 

organizations. Provide a list of the same or 

similar projects designed, installed, or 

supplied and currently operating consistent 

with the substrate material with references, if 

available; and 

(4) For regional or centralized digester 

plants, describe the system operator’s 

qualifications and experience for servicing, 

operating, and maintaining similar projects. 

Farm scale systems may not require operator 

experience as the developer is typically 

required to provide operational training 

during system startup and shakedown. 

Provide a list of the same or similar projects 

designed, installed, or supplied and currently 

operating consistent with the substrate 

material with references, if available. 

(b) Agreements, permits, and certifications. 

Identify all necessary agreements and permits 

required for the project and the status and 

schedule for securing those agreements and 

permits, including the items specified in 

paragraphs (b)(1) through (8). 

(1) Identify zoning and code issues, and 

required permits and the anticipated 

schedule for meeting those requirements and 

securing those permits. 

(2) Identify licenses where required and 

the schedule for obtaining those licenses. 

(3) For regional or centralized digester 

plants, identify feedstock access agreements 

required for the project and the anticipated 

schedule for securing those agreements and 

the term of those agreements. 

(4) Identify any permits or agreements 

required for transport and ultimate waste 

disposal and the schedule for securing those 

agreements and permits. 


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(5) Identify available component 

warranties for the specific project location 

and size. 

(6) For systems planning to interconnect 

with a utility, describe the utility’s system 

interconnection requirements, power 

purchase agreements, or licenses where 

required and the anticipated schedule for 

meeting those requirements and obtaining 

those agreements. This is required even if the 

system is installed on the customer side of 

the utility meter. For systems planning to 

utilize a local net metering program as their 

interconnection agreement, describe the 

applicable local net metering program. 

(7) Identify all environmental issues, 

including environmental compliance issues, 

associated with the project on Form RD 

1940–20, ‘‘Request for Environmental 

Information,’’ and in compliance with 7 CFR 

part 1940, subpart G of this title. 

(8) Submit a statement certifying that the 

project will be installed in accordance with 

applicable local, State, and national codes 

and regulations. 

(c) Resources assessment. Provide adequate 

and appropriate data to demonstrate the 

amount of renewable resource available. 

Indicate the substrates used as digester 

inputs, including animal wastes, food 

processing wastes, or other organic wastes in 

terms of type, quantity, seasonality, and 

frequency of collection. Describe any special 

handling of feedstock that may be necessary. 

Describe the process for determining the 

feedstock resource. Provide either tabular 

values or laboratory analysis of 

representative samples that include 

biodegradability studies to produce gas 

production estimates for the project on daily, 

monthly, and seasonal basis. 

(d) Design and engineering. Provide 

authoritative evidence that the system will be 

designed and engineered so as to meet its 

intended purpose, will ensure public safety, 

and will comply with applicable laws, 

regulations, agreements, permits, codes, and 

standards. Projects shall be engineered by a 

qualified party. Systems must be engineered 

as a complete, integrated system with 

matched components. The engineering must 

be comprehensive, including site selection, 

digester component selection, gas handling 

component selection, and gas use component 

selection. Systems must be constructed by a 

qualified party. 

(1) Provide a concise but complete 

description of the anaerobic digester project, 

including location of the project, farm 

description, feedstock characteristics, a stepby-step flowchart of unit operations, electric 

power system interconnection equipment, 

and any required monitoring equipment. 

Identify possible vendors and models of 

major system components. Provide the 

expected system energy production, heat 

balances, and material balances as part of the 

unit operations flowchart. 

(2) Describe the project site and address 

issues such as site access, foundations, 

backup equipment when applicable, and 

environmental concerns with emphasis on 

land use, air quality, water quality, soil 

degradation, habitat degradation, land use, 

visibility, odor, noise, construction, and 

installation issues. Identify any unique 

construction and installation issues. 

(e) Project development schedule. Identify 

each significant task, its beginning and end, 

and its relationship to the time needed to 

initiate and carry the project through startup 

and shakedown. Provide a detailed 

description of the project timeline, including 

feedstock assessment, system and site 

designs, permits and agreements, equipment 

procurement, system installation from 

excavation through startup and shakedown, 

and operator training. 

(f) Project economic assessment. Provide a 

study that describes the costs and revenues 

of the proposed project to demonstrate the 

financial performance of the project, 

including the calculation of simple payback. 

Provide a detailed analysis and description of 

project costs, including project management, 

feedstock assessment, project design, project 

permitting, land agreements, equipment, site 

preparation, system installation, startup and 

shakedown, warranties, insurance, financing, 

professional services, training and 

operations, and maintenance costs of both 

the digester and the gas use systems. Provide 

a detailed analysis and description of annual 

project revenues and expenses. Provide a 

detailed description of applicable investment 

incentives, productivity incentives, loans, 

and grants. In addition, provide other 

information necessary to assess the project’s 

cost effectiveness. 

(g) Equipment procurement. Demonstrate 

that equipment required by the system is 

available and can be procured and delivered 

within the proposed project development 

schedule. Anaerobic digester systems may be 

constructed of components manufactured in 

more than one location. Provide a description 

of any unique equipment procurement issues 

such as scheduling and timing of component 

manufacture and delivery, ordering, 

warranties, shipping, receiving, and on-site 

storage or inventory. Identify all the major 

equipment that is proprietary and justify how 

this unique equipment is needed to meet the 

requirements of the proposed design. Include 

a statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. Describe fully 

the management of and plan for site 

development and system installation, 

provide details regarding the scheduling of 

major installation equipment needed for 

project construction, and provide a 

description of the startup and shakedown 

specifications and process and the conditions 

required for startup and shakedown for each 

equipment item individually and for the 

system as a whole. Include a statement from 

the applicant certifying that equipment 

installation will be made in accordance with 

all applicable safety and work rules. 

(i) Operations and maintenance. Identify 

the operations and maintenance 

requirements of the system necessary for the 

system to operate as designed over the design 

life. The application must: 

(1) Ensure that systems must have at least 

a 3-year warranty for equipment and a 10- 

year warranty on design. Provide information 

regarding system warranties and availability 

of spare parts; 

(2) Describe the routine operations and 

maintenance requirements of the proposed 

project, including maintenance for the 

digester, the gas handling equipment, and the 

gas use systems. Describe any maintenance 

requirements for system monitoring and 

control equipment; 

(3) Provide information that supports the 

expected design life of the system and the 

timing of major component replacement or 

rebuilds; 

(4) Provide and discuss the risk 

management plan for handling large, 

potential failures of major components. 

Include in the discussion, costs and labor 

associated with the operation and 

maintenance of the system, and plans for insourcing or out-sourcing; and 

(5) Describe opportunities for technology 

transfer for long-term project operations and 

maintenance by a local entity or owner/ 

operator. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. Describe the budget for and any unique 

concerns associated with the dismantling and 

disposal of project components and their 

wastes. 

Section 3. Geothermal, Electric Generation 

The technical requirements specified in 

this section apply to electric generation 

geothermal projects, which are, as defined in 

§ 4280.103, systems that use geothermal 

energy to produce high pressure steam for 

electric power production. 

(a) Qualifications of project team. The 

electric generating geothermal plant project 

team should consist of a system designer, a 

project manager, an equipment supplier, a 

project engineer, a construction contractor, 

and a system operator and maintainer. One 

individual or entity may serve more than one 

role. The project team must have 

demonstrated expertise in geothermal electric 

generation systems development, 

engineering, installation, and maintenance. 

Authoritative evidence that project team 

service providers have the necessary 

professional credentials or relevant 

experience to perform the required services 

must be provided. Authoritative evidence 

that vendors of proprietary components can 

provide necessary equipment and spare parts 

for the system to operate over its design life 

must also be provided. The application must: 

(1) Discuss the proposed project delivery 

method. Such methods include a design, bid, 

build where a separate engineering firm may 

design the project and prepare a request for 

bids and the successful bidder constructs the 

project at the applicant’s risk, and a design/ 

build method, often referred to as turnkey, 

where the applicant establishes the 

specifications for the project and secures the 

services of a developer who will design and 

build the project at the developer’s risk; 

(2) Discuss the geothermal plant equipment 

manufacturers of major components being 

considered in terms of the length of time in 

business and the number of units installed at 

the capacity and scale being considered; 

(3) Discuss the project manager, equipment 

supplier, system designer, project engineer, 


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and construction contractor qualifications for 

engineering, designing, and installing 

geothermal electric generation systems, 

including any relevant certifications by 

recognized organizations. Provide a list of the 

same or similar projects designed, installed, 

or supplied and currently operating with 

references, if available; and 

(4) Describe the system operator’s 

qualifications and experience for servicing, 

operating, and maintaining electric 

generating geothermal projects. Provide a list 

of the same or similar projects designed, 

installed, or supplied and currently operating 

with references, if available. 

(b) Agreements, permits, and certifications. 

Identify all necessary agreements and permits 

required for the project and the status and 

schedule for securing those agreements and 

permits, including the items specified in 

paragraphs (b)(1) through (7). 

(1) Identify zoning and code issues and 

required permits and the anticipated 

schedule for meeting those requirements and 

securing those permits. 

(2) Identify any permits or agreements 

required for well construction and for 

disposal or re-injection of cooled geothermal 

waters and the schedule for securing those 

agreements and permits. 

(3) Identify land use or access to the 

resource agreements required for the project 

and the anticipated schedule for securing the 

agreements and the term of those agreements. 

(4) Identify available component 

warranties for the specific project location 

and size. 

(5) For systems planning to interconnect 

with a utility, describe the utility’s system 

interconnection requirements, power 

purchase agreements, or licenses where 

required and the anticipated schedule for 

meeting those requirements and obtaining 

those agreements. 

(6) Identify all environmental issues, 

including environmental compliance issues, 

associated with the project on Form RD 

1940–20, ‘‘Request for Environmental 

Information,’’ and in compliance with 7 CFR 

part 1940, subpart G of this title. 

(7) Submit a statement certifying that the 

project will be installed in accordance with 

applicable local, State, and national codes 

and regulations. 

(c) Resources assessment. Provide adequate 

and appropriate data to demonstrate the 

amount of renewable resource available. 

Indicate the quality of the geothermal 

resource, including temperature, flow, and 

sustainability and what conversion system is 

to be installed. Describe any special handling 

of cooled geothermal waters that may be 

necessary. Describe the process for 

determining the geothermal resource, 

including measurement setup for the 

collection of the geothermal resource data. 

For proposed projects with an established 

resource, provide a summary of the resource 

and the specifications of the measurement 

setup. 

(d) Design and engineering. Provide 

authoritative evidence that the system will be 

designed and engineered so as to meet its 

intended purpose, will ensure public safety, 

and will comply with applicable laws, 

regulations, agreements, permits, codes, and 

standards. Projects shall be engineered by a 

qualified party. Systems must be engineered 

as a complete, integrated system with 

matched components. The engineering must 

be comprehensive, including site selection, 

system and component selection, conversion 

system component and selection, design of 

the local collection grid, interconnection 

equipment selection, and system monitoring 

equipment. Systems must be constructed by 

a qualified party. 

(1) Provide a concise but complete 

description of the geothermal project, 

including location of the project, resource 

characteristics, thermal system 

specifications, electric power system 

interconnection equipment and project 

monitoring equipment. Identify possible 

vendors and models of major system 

components. Provide the expected system 

energy production on a monthly and annual 

basis. 

(2) Describe the project site and address 

issues such as site access, proximity to the 

electrical grid, environmental concerns with 

emphasis on land use, air quality, water 

quality, habitat fragmentation, visibility, 

noise, construction, and installation issues. 

Identify any unique construction and 

installation issues. 

(e) Project development schedule. Identify 

each significant task, its beginning and end, 

and its relationship to the time needed to 

initiate and carry the project through startup 

and shakedown. Provide a detailed 

description of the project timeline, including 

resource assessment, system and site design, 

permits and agreements, equipment 

procurement, and system installation from 

excavation through startup and shakedown. 

(f) Project economic assessment. Provide a 

study that describes the costs and revenues 

of the proposed project to demonstrate the 

financial performance of the project, 

including the calculation of simple payback. 

Provide a detailed analysis and description of 

project costs, including project management, 

resource assessment, project design, project 

permitting, land agreements, equipment, site 

preparation, system installation, startup and 

shakedown, warranties, insurance, financing, 

professional services, and operations and 

maintenance costs. Provide a detailed 

analysis and description of annual project 

revenues, including electricity sales, 

production tax credits, revenues from green 

tags, and any other production incentive 

programs throughout the life of the project. 

Provide a detailed description of applicable 

investment incentives, productivity 

incentives, loans, and grants. In addition, 

provide other information necessary to assess 

the project’s cost effectiveness. 

(g) Equipment procurement. Demonstrate 

that equipment required by the system is 

available and can be procured and delivered 

within the proposed project development 

schedule. Geothermal systems may be 

constructed of components manufactured in 

more than one location. Provide a description 

of any unique equipment procurement issues 

such as scheduling and timing of component 

manufacture and delivery, ordering, 

warranties, shipping, receiving, and on-site 

storage or inventory. Identify all the major 

equipment that is proprietary and justify how 

this unique equipment is needed to meet the 

requirements of the proposed design. Include 

a statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. Describe fully 

the management of and plan for site 

development and system installation, 

provide details regarding the scheduling of 

major installation equipment needed for 

project construction, and provide a 

description of the startup and shakedown 

specifications and process and the conditions 

required for startup or shakedown for each 

equipment item individually and for the 

system as a whole. Include a statement from 

the applicant certifying that equipment 

installation will be made in accordance with 

all applicable safety and work rules. 

(i) Operations and maintenance. Identify 

the operations and maintenance 

requirements of the system necessary for the 

system to operate as designed over the design 

life. The application must: 

(1) Ensure that systems must have at least 

a 3-year warranty for equipment. Provide 

information regarding turbine warranties and 

availability of spare parts; 

(2) Describe the routine operations and 

maintenance requirements of the proposed 

project, including maintenance for the 

mechanical and electrical systems and 

system monitoring and control requirements; 

(3) Provide information that supports 

expected design life of the system and timing 

of major component replacement or rebuilds; 

(4) Provide and discuss the risk 

management plan for handling large, 

potential failures of major components such 

as the turbine. Include in the discussion, 

costs and labor associated with the operation 

and maintenance of the system, and plans for 

in-sourcing or out-sourcing; and 

(5) Describe opportunities for technology 

transfer for long-term project operations and 

maintenance by a local entity or owner/ 

operator. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. Describe the budget for and any unique 

concerns associated with the dismantling and 

disposal of project components and their 

wastes. 

Section 4. Geothermal, Direct Use 

The technical requirements specified in 

this section apply to direct use geothermal 

projects, which are, as defined in § 4280.103, 

systems that use thermal energy directly from 

a geothermal source. 

(a) Qualifications of project team. The 

geothermal project team should consist of a 

system designer, a project manager, an 

equipment supplier, a project engineer, a 

construction contractor, and a system 

operator and maintainer. One individual or 

entity may serve more than one role. The 

project team must have demonstrated 

expertise in geothermal heating systems 

development, engineering, installation, and 

maintenance. Authoritative evidence that 

project team service providers have the 


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necessary professional credentials or relevant 

experience to perform the required services 

must be provided. Authoritative evidence 

that vendors of proprietary components can 

provide necessary equipment and spare parts 

for the system to operate over its design life 

must also be provided. The application must: 

(1) Discuss the proposed project delivery 

method. Such methods include a design, bid, 

build where a separate engineering firm may 

design the project and prepare a request for 

bids and the successful bidder constructs the 

project at the applicant’s risk, and a design/ 

build method, often referred to as turnkey, 

where the applicant establishes the 

specifications for the project and secures the 

services of a developer who will design and 

build the project at the developer’s risk; 

(2) Discuss the geothermal system 

equipment manufacturers of major 

components being considered in terms of the 

length of time in business and the number of 

units installed at the capacity and scale being 

considered; 

(3) Discuss the project manager, equipment 

supplier, system designer, project engineer, 

and construction contractor qualifications for 

engineering, designing, and installing direct 

use geothermal systems, including any 

relevant certifications by recognized 

organizations. Provide a list of the same or 

similar projects designed, installed, or 

supplied and currently operating with 

references, if available; and 

(4) Describe system operator’s 

qualifications and experience for servicing, 

operating, and maintaining direct use 

generating geothermal projects. Provide a list 

of the same or similar projects designed, 

installed, or supplied and currently operating 

with references, if available. 

(b) Agreements, permits, and certifications. 

Identify all necessary agreements and permits 

required for the project and the status and 

schedule for securing those agreements and 

permits, including the items specified in 

paragraphs (b)(1) through (7). 

(1) Identify zoning and code issues, and 

required permits and the anticipated 

schedule for meeting those requirements and 

securing those permits. 

(2) Identify licenses where required and 

the schedule for obtaining those licenses. 

(3) Identify land use or access to the 

resource agreements required for the project 

and the anticipated schedule for securing the 

agreements and the term of those agreements. 

(4) Identify any permits or agreements 

required for well construction and for 

disposal or re-injection of cooled geothermal 

waters and the anticipated schedule for 

securing those permits and agreements. 

(5) Identify available component 

warranties for the specific project location 

and size. 

(6) Identify all environmental issues, 

including environmental compliance issues, 

associated with the project on Form RD 

1940–20, ‘‘Request for Environmental 

Information,’’ and in compliance with 7 CFR 

part 1940, subpart G of this title. 

(7) Submit a statement certifying that the 

project will be installed in accordance with 

applicable local, State, and national codes 

and regulations. 

(c) Resources assessment. Provide adequate 

and appropriate data to demonstrate the 

amount of renewable resource available. 

Indicate the quality of the geothermal 

resource, including temperature, flow, and 

sustainability and what direct use system is 

to be installed. Describe any special handling 

of cooled geothermal waters that may be 

necessary. Describe the process for 

determining the geothermal resource, 

including measurement setup for the 

collection of the geothermal resource data. 

For proposed projects with an established 

resource, provide a summary of the resource 

and the specifications of the measurement 

setup. 

(d) Design and engineering. Provide 

authoritative evidence that the system will be 

designed and engineered so as to meet its 

intended purpose, will ensure public safety, 

and will comply with applicable laws, 

regulations, agreements, permits, codes, and 

standards. Projects shall be engineered by a 

qualified party. Systems must be engineered 

as a complete, integrated system with 

matched components. The engineering must 

be comprehensive, including site selection, 

system and component selection, thermal 

system component selection, and system 

monitoring equipment. Systems must be 

constructed by a qualified party. 

(1) Provide a concise but complete 

description of the geothermal project, 

including location of the project, resource 

characteristics, thermal system 

specifications, and monitoring equipment. 

Identify possible vendors and models of 

major system components. Provide the 

expected system energy production on a 

monthly and annual basis. 

(2) Describe the project site and address 

issues such as site access, thermal backup 

equipment, environmental concerns with 

emphasis on land use, air quality, water 

quality, habitat fragmentation, visibility, 

noise, construction, and installation issues. 

Identify any unique construction and 

installation issues. 

(e) Project development schedule. Identify 

each significant task, its beginning and end, 

and its relationship to the time needed to 

initiate and carry the project through startup 

and shakedown. Provide a detailed 

description of the project timeline, including 

resource assessment, system and site design, 

permits and agreements, equipment 

procurement, and system installation from 

excavation through startup and shakedown. 

(f) Project economic assessment. Provide a 

study that describes the costs and revenues 

of the proposed project to demonstrate the 

financial performance of the project, 

including the calculation of simple payback. 

Provide a detailed analysis and description of 

project costs, including project management, 

resource assessment, project design, project 

permitting, land agreements, equipment, site 

preparation, system installation, startup and 

shakedown, warranties, insurance, financing, 

professional services, and operations and 

maintenance costs. Provide a detailed 

analysis and description of annual project 

revenues and expenses. Provide a detailed 

description of applicable investment 

incentives, productivity incentives, loans, 

and grants. In addition, provide other 

information necessary to assess the project’s 

cost effectiveness. 

(g) Equipment procurement. Demonstrate 

that equipment required by the system is 

available and can be procured and delivered 

within the proposed project development 

schedule. Geothermal systems may be 

constructed of components manufactured in 

more than one location. Provide a description 

of any unique equipment procurement issues 

such as scheduling and timing of component 

manufacture and delivery, ordering, 

warranties, shipping, receiving, and on-site 

storage or inventory. Identify all the major 

equipment that is proprietary and justify how 

this unique equipment is needed to meet the 

requirements of the proposed design. Include 

a statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. Describe fully 

the management of and plan for site 

development and system installation, 

provide details regarding the scheduling of 

major installation equipment needed for 

project construction, and provide a 

description of the startup and shakedown 

specifications and process and the conditions 

required for startup and shakedown for each 

equipment item individually and for the 

system as a whole. Include a statement from 

the applicant certifying that equipment 

installation will be made in accordance with 

all applicable safety and work rules. 

(i) Operations and maintenance. Identify 

the operations and maintenance 

requirements of the system necessary for the 

system to operate as designed over the design 

life. The application must: 

(1) Ensure that systems must have at least 

a 3-year warranty for equipment. Provide 

information regarding system warranties and 

availability of spare parts; 

(2) Describe the routine operations and 

maintenance requirements of the proposed 

project, including maintenance for the 

mechanical and electrical systems and 

system monitoring and control requirements; 

(3) Provide information that supports 

expected design life of the system and timing 

of major component replacement or rebuilds; 

(4) Provide and discuss the risk 

management plan for handling large, 

potential failures of major components. 

Include in the discussion, costs and labor 

associated with the operation and 

maintenance of the system, and plans for insourcing or out-sourcing; and 

(5) Describe opportunities for technology 

transfer for long-term project operations and 

maintenance by a local entity or owner/ 

operator. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. Describe the budget for and any unique 

concerns associated with the dismantling and 

disposal of project components and their 

wastes. 

Section 5. Hydrogen Projects 

The technical requirements specified in 

this section apply to hydrogen projects, 

which are, as defined in § 4280.103, 

renewable energy systems that produce 


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hydrogen or, a renewable energy system that 

uses mechanical or electric power or thermal 

energy from a renewable resource using 

hydrogen as an energy transport medium. 

(a) Qualifications of project team. The 

hydrogen project team will vary according to 

the complexity and scale of the project. For 

engineered systems, the project team should 

consist of a system designer, a project 

manager, an equipment supplier, a project 

engineer, a construction contractor or system 

installer, and a system operator and 

maintainer. One individual or entity may 

serve more than one role. The project team 

must have demonstrated expertise in similar 

hydrogen systems development, engineering, 

installation, and maintenance. Authoritative 

evidence that project team service providers 

have the necessary professional credentials 

or relevant experience to perform the 

required services must be provided. 

Authoritative evidence that vendors of 

proprietary components can provide 

necessary equipment and spare parts for the 

system to operate over its design life must 

also be provided. The application must: 

(1) Discuss the proposed project delivery 

method. Such methods include a design, bid, 

build where a separate engineering firm may 

design the project and prepare a request for 

bids and the successful bidder constructs the 

project at the applicant’s risk, and a design/ 

build method, often referred to as turnkey, 

where the applicant establishes the 

specifications for the project and secures the 

services of a developer who will design and 

build the project at the developer’s risk; 

(2) Discuss the hydrogen system equipment 

manufacturers of major components for the 

hydrogen system being considered in terms 

of the length of time in the business and the 

number of units installed at the capacity and 

scale being considered; 

(3) Discuss the project manager, equipment 

supplier, system designer, project engineer, 

and construction contractor qualifications for 

engineering, designing, and installing 

hydrogen systems, including any relevant 

certifications by recognized organizations. 

Provide a list of the same or similar projects 

designed, installed, or supplied and currently 

operating with references, if available; and 

(4) Describe the system operator’s 

qualifications and experience for servicing, 

operating, and maintaining hydrogen system 

equipment or projects. Provide a list of the 

same or similar projects designed, installed, 

or supplied and currently operating with 

references, if available. 

(b) Agreements, permits, and certifications. 

Identify all necessary agreements and permits 

required for the project and the status and 

schedule for securing those agreements and 

permits, including the items specified in 

paragraphs (b)(1) through (8). 

(1) Identify zoning and building code 

issues, and required permits and the 

anticipated schedule for meeting those 

requirements and securing those permits. 

(2) Identify licenses where required and 

the schedule for obtaining those licenses. 

(3) Identify land use agreements required 

for the project and the anticipated schedule 

for securing the agreements and the term of 

those agreements. 

(4) Identify any permits or agreements 

required for solid, liquid, and gaseous 

emissions or effluents and the anticipated 

schedule for securing those permits and 

agreements. 

(5) Identify available component 

warranties for the specific project location 

and size. 

(6) For systems planning to interconnect 

with a utility, describe the utility’s system 

interconnection requirements, power 

purchase agreements, or licenses where 

required and the anticipated schedule for 

meeting those requirements and obtaining 

those agreements. This is required even if the 

system is installed on the customer side of 

the utility meter. For systems planning to 

utilize a local net metering program as their 

interconnection agreement, describe the 

applicable local net metering program. 

(7) Identify all environmental issues, 

including environmental compliance issues, 

associated with the project on Form RD 

1940–20, ‘‘Request for Environmental 

Information,’’ and in compliance with 7 CFR 

part 1940, subpart G of this title. 

(8) Submit a statement certifying that the 

project will be installed in accordance with 

applicable local, State, and national codes 

and regulations. 

(c) Resources assessment. Provide adequate 

and appropriate data to demonstrate the 

amount of renewable resource available. 

Indicate the type, quantity, quality, and 

seasonality of the biomass resource. For 

solar, wind, or geothermal sources of energy 

used to generate hydrogen, indicate the local 

renewable resource where the hydrogen 

system is to be installed. Local resource maps 

may be used as an acceptable preliminary 

source of renewable resource data. For 

proposed projects with an established 

renewable resource, provide a summary of 

the resource. 

(d) Design and engineering. Provide 

authoritative evidence that the system will be 

designed and engineered so as to meet its 

intended purpose, will ensure public safety, 

and will comply with applicable laws, 

regulations, agreements, permits, codes, and 

standards. Projects shall be engineered by a 

qualified party. Systems must be engineered 

as a complete, integrated system with 

matched components. The engineering must 

be comprehensive, including site selection, 

system and component selection, and system 

monitoring equipment. Systems must be 

constructed by a qualified party. 

(1) Provide a concise but complete 

description of the hydrogen project, 

including location of the project, resource 

characteristics, system specifications, electric 

power system interconnection equipment, 

and monitoring equipment. Identify possible 

vendors and models of major system 

components. Describe the expected electric 

power, fuel production, or thermal energy 

production of the proposed system. Address 

performance on a monthly and annual basis. 

Describe the uses of or the market for 

electricity, heat, or fuel produced by the 

system. Discuss the impact of reduced or 

interrupted resource availability on the 

system process. 

(2) Describe the project site and address 

issues such as site access, foundations, 

backup equipment when applicable, and any 

environmental and safety concerns with 

emphasis on land use, air quality, water 

quality, and safety hazards. Identify any 

unique construction and installation issues. 

(e) Project development schedule. Identify 

each significant task, its beginning and end, 

and its relationship to the time needed to 

initiate and carry the project through startup 

and shakedown. Provide a detailed 

description of the project timeline, including 

resource assessment, system and site design, 

permits and agreements, equipment 

procurement, and system installation from 

excavation through startup and shakedown. 

(f) Project economic assessment. Provide a 

study that describes the costs and revenues 

of the proposed project to demonstrate the 

financial performance of the project, 

including the calculation of simple payback. 

Provide a detailed analysis and description of 

project costs, including project management, 

resource assessment, project design and 

engineering, project permitting, land 

agreements, equipment, site preparation, 

system installation, startup and shakedown, 

warranties, insurance, financing, professional 

services, and operations and maintenance 

costs. Provide a detailed analysis and 

description of annual project revenues and 

expenses. Provide a detailed description of 

applicable investment incentives, 

productivity incentives, loans, and grants. In 

addition, provide other information 

necessary to assess the project’s cost 

effectiveness. 

(g) Equipment procurement. Demonstrate 

that equipment required by the system is 

available and can be procured and delivered 

within the proposed project development 

schedule. Hydrogen systems may be 

constructed of components manufactured in 

more than one location. Provide a description 

of any unique equipment procurement 

issues, such as scheduling and timing of 

component manufacture and delivery, 

ordering, warranties, shipping, and receiving, 

and on-site storage or inventory. Identify all 

the major equipment that is proprietary and 

justify how this unique equipment is needed 

to meet the requirements of the proposed 

design. Include a statement from the 

applicant certifying that ‘‘open and free’’ 

competition will be used for the procurement 

of project components in a manner consistent 

with the requirements of 7 CFR part 3015 of 

this title. 

(h) Equipment installation. Describe fully 

the management of and plan for site 

development and system installation, 

provide details regarding the scheduling of 

major installation equipment needed for 

project construction, and provide a 

description of the startup and shakedown 

specifications and process and the conditions 

required for startup and shakedown for each 

equipment item individually and for the 

system as a whole. Include a statement from 

the applicant certifying that equipment 

installation will be made in accordance with 

all applicable safety and work rules. 

(i) Operations and maintenance. Identify 

the operations and maintenance 

requirements of the system necessary for the 

system to operate as designed over the design 

life. The application must: 

(1) Provide information regarding system 

warranties and availability of spare parts; 


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(2) Describe the routine operations and 

maintenance requirements of the proposed 

project, including maintenance of the 

reformer, electrolyzer, or fuel cell as 

appropriate, and other mechanical, piping, 

and electrical systems and system monitoring 

and control requirements; 

(3) Provide information that supports 

expected design life of the system and timing 

of major component replacement or rebuilds; 

(4) Provide and discuss the risk 

management plan for handling large, 

potential failures of major components. 

Include in the discussion, costs and labor 

associated with the operation and 

maintenance of the system, and plans for insourcing or out-sourcing; and 

(5) Describe opportunities for technology 

transfer for long-term project operations and 

maintenance by a local entity or owner/ 

operator. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. Describe the budget for and any unique 

concerns associated with the dismantling and 

disposal of project components and their 

wastes. 

Section 6. Solar, Small 

The technical requirements specified in 

this section apply to small solar electric 

projects and small solar thermal projects, as 

defined in § 4280.103. 

Small solar electric projects are those for 

which the rated power of the system is 10kW 

or smaller. Small solar electric projects are 

either stand-alone (off grid) or interconnected 

to the grid at less than 600 volts (on grid). 

Small solar thermal projects are those for 

which the rated storage volume of the system 

is 240 gallons or smaller, or which have a 

collector area of 1,000 square feet or less. 

(a) Qualifications of project team. The 

small solar project team should consist of a 

system designer, a project manager or general 

contractor, an equipment supplier of major 

components, a system installer, a system 

maintainer, and, in some cases, the owner of 

the application or load served by the system. 

One individual or entity may serve more than 

one role. Authoritative evidence that project 

team service providers have the necessary 

professional credentials or relevant 

experience to perform the required services 

must be provided. Authoritative evidence 

that vendors of proprietary components can 

provide necessary equipment and spare parts 

for the system to operate over its design life 

must also be provided. The application must: 

(1) Discuss the qualifications of the 

suppliers of major components being 

considered; 

(2) Describe the knowledge, skills, and 

abilities needed to service, operate, and 

maintain the system for the proposed 

application; and 

(3) Discuss the project manager, system 

designer, and system installer qualifications 

for engineering, designing, and installing 

small solar systems, including any relevant 

certifications by recognized organizations. 

Provide a list of the same or similar systems 

designed or installed by the design and 

installation team and currently operating 

with references, if available. 

(b) Agreements, permits, and certifications. 

Identify all necessary agreements and permits 

required for the project and the status and 

schedule for securing those agreements and 

permits, including the items specified in 

paragraphs (b)(1) through (5). 

(1) Identify zoning, building, and electrical 

code issues, and required permits and the 

anticipated schedule for meeting those 

requirements and securing those permits. 

(2) Identify available component 

warranties for the specific project location 

and size. 

(3) For systems planning to interconnect 

with a utility, describe the utility’s system 

interconnection requirements, power 

purchase agreements, or licenses where 

required and the anticipated schedule for 

meeting those requirements and obtaining 

those agreements. This is required even if the 

system is installed on the customer side of 

the utility meter. For systems planning to 

utilize a local net metering program as their 

interconnection agreement, describe the 

applicable local net metering program. 

(4) Identify all environmental issues, 

including environmental compliance issues, 

associated with the project on Form RD 

1940–20, ‘‘Request for Environmental 

Information,’’ and in compliance with 7 CFR 

part 1940, subpart G of this title. 

(5) Submit a statement certifying that the 

project will be installed in accordance with 

applicable local, State, and national codes 

and regulations. 

(c) Resources assessment. Provide adequate 

and appropriate data to demonstrate the 

amount of renewable resource available. 

Indicate the source of the solar data and 

assumptions. 

(d) Design and engineering. Provide 

authoritative evidence that the system will be 

designed and engineered so as to meet its 

intended purpose, will ensure public safety, 

and will comply with applicable laws, 

regulations, agreements, permits, codes, and 

standards. For small solar electric systems, 

the engineering must be comprehensive, 

including solar collector design and 

selection, support structure design and 

selection, power conditioning design and 

selection, surface or submersible water 

pumps and energy storage requirements as 

applicable, and selection of cabling, 

disconnects and interconnection equipment. 

For small solar thermal systems, the 

engineering must be comprehensive, 

including solar collector design and 

selection, support structure design and 

selection, pump and piping design and 

selection, and energy storage design and 

selection. 

(1) Provide a concise but complete 

description of the small solar system, 

including location of the project and 

proposed equipment specifications. Identify 

possible vendors and models of major system 

components. Provide the expected system 

energy production based on available solar 

resource data on a monthly (when possible) 

and annual basis and how the energy 

produced by the system will be used. 

(2) Describe the project site and address 

issues such as solar access, orientation, 

proximity to the load or the electrical grid, 

environmental concerns such as water 

quality and land use, unique safety concerns 

such as hazardous materials handling, 

construction, and installation issues, and 

whether special circumstances exist. 

(e) Project development schedule. Identify 

each significant task, its beginning and end, 

and its relationship to the time needed to 

initiate and carry the project through startup 

and shakedown. Provide a detailed 

description of the project timeline, including 

system and site design, permits and 

agreements, equipment procurement, and 

system installation from excavation through 

startup and shakedown. 

(f) Project economic assessment. Provide a 

study that describes the costs and revenues 

of the proposed project to demonstrate the 

financial performance of the project, 

including the calculation of simple payback. 

Provide a detailed analysis and description of 

project costs, including design, permitting, 

equipment, site preparation, system 

installation, system startup and shakedown, 

warranties, insurance, financing, professional 

services, and operations and maintenance 

costs. Provide a detailed description of 

applicable investment incentives, 

productivity incentives, loans, and grants. 

Provide a detailed description of historic or 

expected energy use and expected energy 

offsets or sales on a monthly and annual 

basis. In addition, provide other information 

necessary to assess the project’s cost 

effectiveness. 

(g) Equipment procurement. Demonstrate 

that equipment required by the system is 

available and can be procured and delivered 

within the proposed project development 

schedule. Small solar systems may be 

constructed of components manufactured in 

more than one location. Provide a description 

of any unique equipment procurement issues 

such as scheduling and timing of component 

manufacture and delivery, ordering, 

warranties, shipping, receiving, and on-site 

storage or inventory. Provide a detailed 

description of equipment certification. 

Identify all the major equipment that is 

proprietary and justify how this unique 

equipment is needed to meet the 

requirements of the proposed design. Include 

a statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. Describe fully 

the management of and plan for site 

development and system installation, 

provide details regarding the scheduling of 

major installation equipment needed for 

project construction, and provide a 

description of the startup and shakedown 

specifications and process and the conditions 

required for startup and shakedown for each 

equipment item individually and for the 

system as a whole. Include a statement from 

the applicant certifying that equipment 

installation will be made in accordance with 

all applicable safety and work rules. 

(i) Operations and maintenance. Identify 

the operations and maintenance 

requirements of the system necessary for the 

system to operate as designed over the design 

life. The application must: 

(1) Ensure that systems must have at least 

a 5-year warranty for equipment. Provide 


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21160 Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Rules and Regulations 

information regarding system warranty and 

availability of spare parts; 

(2) Describe the routine operations and 

maintenance requirements of the proposed 

system, including maintenance schedules for 

the mechanical and electrical and software 

systems; 

(3) For owner maintained portions of the 

system, describe any unique knowledge, 

skills, or abilities needed for service 

operations or maintenance; and 

(4) Provide information regarding expected 

system design life and timing of major 

component replacement or rebuilds. Include 

in the discussion, costs and labor associated 

with the operation and maintenance of the 

system, and plans for in-sourcing or outsourcing. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. Describe the budget for and any unique 

concerns associated with the dismantling and 

disposal of project components and their 

wastes. Describe any environmental 

compliance requirements such as proper 

disposal or recycling procedures to reduce 

potential impact from any hazardous 

chemicals. 

Section 7. Solar, Large 

The technical requirements specified in 

this section apply to large solar electric 

projects and large solar thermal projects, as 

defined in § 4280.103. 

Large solar electric systems are those for 

which the rated power of the system is larger 

than 10kW. Large solar electric systems are 

either stand-alone (off grid) or interconnected 

to the grid (on grid). 

Large solar thermal systems are those for 

which the rated storage volume of the system 

is greater than 240 gallons or that have a 

collector area of more than 1,000 square feet. 

(a) Qualifications of project team. The large 

solar project team should consist of an 

equipment supplier of major components, a 

project manager, general contractor, system 

engineer, system installer, and system 

maintainer. One individual or entity may 

serve more than one role. Authoritative 

evidence that project team service providers 

have the necessary professional credentials 

or relevant experience to perform the 

required services must be provided. 

Authoritative evidence that vendors of 

proprietary components can provide 

necessary equipment and spare parts for the 

system to operate over its design life must 

also be provided. The application must: 

(1) Discuss the proposed project delivery 

method. Such methods include a design, bid, 

build where a separate engineering firm may 

design the project and prepare a request for 

bids and the successful bidder constructs the 

project at the applicant’s risk, and a design/ 

build method, often referred to as turnkey, 

where the applicant establishes the 

specifications for the project and secures the 

services of a developer who will design and 

build the project at the developer’s risk; 

(2) Discuss the qualifications of the 

suppliers of major components being 

considered; 

(3) Discuss the project manager, general 

contractor, system engineer, and system 

installer qualifications for engineering, 

designing, and installing large solar systems, 

including any relevant certifications by 

recognized organizations. Provide a list of the 

same or similar systems designed or installed 

by the design, engineering, and installation 

team and currently operating with references, 

if available; and 

(4) Describe the system operator’s 

qualifications and experience for servicing, 

operating, and maintaining the system for the 

proposed application. Provide a list of the 

same or similar systems designed or installed 

by the design, engineering, and installation 

team and currently operating with references, 

if available. 

(b) Agreements, permits, and certifications. 

Identify all necessary agreements and permits 

required for the project and the status and 

schedule for securing those agreements and 

permits, including the items specified in 

paragraphs (b)(1) through (5). 

(1) Identify zoning, building, and electrical 

code issues, and required permits and the 

anticipated schedule for meeting those 

requirements and securing those permits. 

(2) Identify available component 

warranties for the specific project location 

and size. 

(3) For systems planning to interconnect 

with a utility, describe the utility’s system 

interconnection requirements, power 

purchase agreements, or licenses where 

required and the anticipated schedule for 

meeting those requirements and obtaining 

those agreements. This is required even if the 

system is installed on the customer side of 

the utility meter. For systems planning to 

utilize a local net metering program as their 

interconnection agreement, describe the 

applicable local net metering program. 

(4) Identify all environmental issues, 

including environmental compliance issues, 

associated with the project on Form RD 

1940–20, ‘‘Request for Environmental 

Information,’’ and in compliance with 7 CFR 

part 1940, subpart G of this title. 

(5) Submit a statement certifying that the 

project will be installed in accordance with 

applicable local, State, and national codes 

and regulations. 

(c) Resources assessment. Provide adequate 

and appropriate data to demonstrate the 

amount of renewable resource available. 

Indicate the source of the solar data and 

assumptions. 

(d) Design and engineering. Provide 

authoritative evidence that the system will be 

designed and engineered so as to meet its 

intended purpose, will ensure public safety, 

and will comply with applicable laws, 

regulations, agreements, permits, codes, and 

standards. 

(1) For large solar electric systems, the 

engineering must be comprehensive, 

including solar collector design and 

selection, support structure design and 

selection, power conditioning design and 

selection, surface or submersible water 

pumps and energy storage requirements as 

applicable, and selection of cabling, 

disconnects, and interconnection equipment. 

A complete set of engineering drawings, 

stamped by a professional engineer, must be 

provided. 

(2) For large solar thermal systems, the 

engineering must be comprehensive, 

including solar collector design and 

selection, support structure design and 

selection, pump and piping design and 

selection, and energy storage design and 

selection. Provide a complete set of 

engineering drawings stamped by a 

professional engineer. 

(3) For either type of system, provide a 

concise but complete description of the large 

solar system, including location of the project 

and proposed equipment and system 

specifications. Identify possible vendors and 

models of major system components. Provide 

the expected system energy production based 

on available solar resource data on a monthly 

(when possible) and annual basis and how 

the energy produced by the system will be 

used. 

(4) For either type of system, provide a 

description of the project site and address 

issues such as solar access, orientation, 

proximity to the load or the electrical grid, 

environmental concerns such as land use, 

water quality, habitat fragmentation, and 

aesthetics, unique safety concerns, 

construction, and installation issues, and 

whether special circumstances exist. 

(e) Project development schedule. Identify 

each significant task, its beginning and end, 

and its relationship to the time needed to 

initiate and carry the project through startup 

and shakedown. Provide a detailed 

description of the project timeline, including 

system and site design, permits and 

agreements, equipment procurement, and 

system installation from excavation through 

startup and shakedown. 

(f) Project economic assessment. Provide a 

study that describes the costs and revenues 

of the proposed project to demonstrate the 

financial performance of the project, 

including the calculation of simple payback. 

Provide a detailed analysis and description of 

project costs, including Design and 

engineering, permitting, equipment, site 

preparation, system installation, system 

startup and shakedown, warranties, 

insurance, financing, professional services, 

and operations and maintenance costs. 

Provide a detailed description of applicable 

investment incentives, productivity 

incentives, loans, and grants. Provide a 

detailed description of historic or expected 

energy use and expected energy offsets or 

sales on a monthly and annual basis. In 

addition, provide other information 

necessary to assess the project’s cost 

effectiveness. 

(g) Equipment procurement. Demonstrate 

that equipment required by the system is 

available and can be procured and delivered 

within the proposed project development 

schedule. Large solar systems may be 

constructed of components manufactured in 

more than one location. Provide a description 

of any unique equipment procurement issues 

such as scheduling and timing of component 

manufacture and delivery, ordering, 

warranties, shipping, receiving, and on-site 

storage or inventory. Provide a detailed 

description of equipment certification. 

Identify all the major equipment that is 

proprietary and justify how this unique 

equipment is needed to meet the 

requirements of the proposed design. Include 

a statement from the applicant certifying that 


sroberts on DSK69SOYB1PROD with RULES
Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Rules and Regulations 21161 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. Describe fully 

the management of and plan for site 

development and system installation, 

provide details regarding the scheduling of 

major installation equipment, including 

cranes and other devices needed for project 

construction, and provide a description of 

the startup and shakedown specifications 

and process and the conditions required for 

startup and shakedown for each equipment 

item individually and for the system as a 

whole. Include a statement from the 

applicant certifying that equipment 

installation will be made in accordance with 

all applicable safety and work rules. 

(i) Operations and maintenance. Identify 

the operations and maintenance 

requirements of the system necessary for the 

system to operate as designed over the design 

life. The application must: 

(1) Ensure that systems must have at least 

a 5-year warranty for equipment. Provide 

information regarding system warranty and 

availability of spare parts; 

(2) Describe the routine operations and 

maintenance requirements of the proposed 

system, including maintenance schedules for 

the mechanical, electrical, and software 

systems; 

(3) For owner maintained portions of the 

system, describe any unique knowledge, 

skills, or abilities needed for service 

operations or maintenance; and 

(4) Provide information regarding expected 

system design life and timing of major 

component replacement or rebuilds. Include 

in the discussion, costs and labor associated 

with the operation and maintenance of the 

system, and plans for in-sourcing or outsourcing. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. Describe the budget for and any unique 

concerns associated with the dismantling and 

disposal of project components and their 

wastes. Describe any environmental 

compliance requirements such as proper 

disposal or recycling procedures to reduce 

any potential impact from hazardous 

chemicals. 

Section 8. Wind, Small 

The technical requirements specified in 

this section apply to small wind systems, 

which are, as defined in § 4280.103, wind 

energy systems for which the rated power of 

the wind turbine is 100kW or smaller and 

with a generator hub height of 120 ft or less. 

Small wind systems are either stand-alone or 

connected to the local electrical system at 

less than 600 volts. 

(a) Qualifications of project team. The 

small wind project team should consist of a 

system designer, a project manager or general 

contractor, an equipment supplier of major 

components, a system installer, a system 

maintainer, and, in some cases, the owner of 

the application or load served by the system. 

One individual or entity may serve more than 

one role. Authoritative evidence that project 

team service providers have the necessary 

professional credentials or relevant 

experience to perform the required services 

must be provided. Authoritative evidence 

that vendors of proprietary components can 

provide necessary equipment and spare parts 

for the system to operate over its design life 

must also be provided. The application must: 

(1) Discuss the small wind turbine 

manufacturers and other equipment 

suppliers of major components being 

considered in terms of their length of time in 

business and the number of units installed at 

the capacity and scale being considered; 

(2) Describe the knowledge, skills, and 

abilities needed to service, operate, and 

maintain the system for the proposed 

application; and 

(3) Discuss the project manager, system 

designer, and system installer qualifications 

for engineering, designing, and installing 

small wind systems, including any relevant 

certifications by recognized organizations. 

Provide a list of the same or similar systems 

designed, installed, or supplied and currently 

operating with references, if available. 

(b) Agreements, permits, and certifications. 

Identify all necessary agreements and permits 

required for the project and the status and 

schedule for securing those agreements and 

permits, including the items specified in 

paragraphs (b)(1) through (5). 

(1) Identify zoning, building, and electrical 

code issues, and required permits and the 

anticipated schedule for meeting those 

requirements and securing those permits. 

(2) Identify available component 

warranties for the specific project location 

and size. 

(3) For systems planning to interconnect 

with a utility, describe the utility’s system 

interconnection requirements, power 

purchase agreements, or licenses, where 

required, and the anticipated schedule for 

meeting those requirements and obtaining 

those agreements. This is required even if the 

system is installed on the customer side of 

the utility meter. For systems planning to 

utilize a local net metering program as their 

interconnection agreement, describe the 

applicable local net metering program. 

(4) Identify all environmental issues, 

including environmental compliance issues, 

associated with the project on Form RD 

1940–20, ‘‘Request for Environmental 

Information,’’ and in compliance with 7 CFR 

part 1940, subpart G of this title. 

(5) Submit a statement certifying that the 

project will be installed in accordance with 

applicable local, State, and national codes 

and regulations. 

(c) Resources assessment. Provide adequate 

and appropriate data to demonstrate the 

amount of renewable resource available. 

Indicate the source of the wind data and the 

conditions of the wind monitoring when 

collected at the site or assumptions made 

when applying nearby wind data to the site. 

(d) Design and engineering. Provide 

authoritative evidence that the system will be 

designed and engineered so as to meet its 

intended purpose, will ensure public safety, 

and will comply with applicable laws, 

regulations, agreements, permits, codes, and 

standards. Small wind systems must be 

engineered by either the wind turbine 

manufacturer or other qualified party. 

Systems must be offered as a complete, 

integrated system with matched components. 

The engineering must be comprehensive, 

including turbine design and selection, tower 

design and selection, specification of guy 

wire anchors and tower foundation, inverter/ 

controller design and selection, energy 

storage requirements as applicable, and 

selection of cabling, disconnects, and 

interconnection equipment, as well as the 

engineering data needed to match the wind 

system output to the application load, if 

applicable. 

(1) Provide a concise but complete 

description of the small wind system, 

including location of the project, proposed 

turbine specifications, tower height and type 

of tower, type of energy storage and location 

of storage if applicable, proposed inverter 

manufacturer and model, electric power 

system interconnection equipment, and 

application load and load interconnection 

equipment as applicable. Identify possible 

vendors and models of major system 

components. Provide the expected system 

energy production based on available wind 

resource data on a monthly (when possible) 

and annual basis and how the energy 

produced by the system will be used. 

(2) Describe the project site and address 

issues such as access to the wind resource, 

proximity to the electrical grid or application 

load, environmental concerns with emphasis 

on historic properties, visibility, noise, bird 

and bat populations, and wildlife habitat 

destruction and/or fragmentation, 

construction, and installation issues and 

whether special circumstances such as 

proximity to airports exist. Provide a 360- 

degree panoramic photograph of the 

proposed site, including indication of 

prevailing winds when possible. 

(e) Project development schedule. Identify 

each significant task, its beginning and end, 

and its relationship to the time needed to 

initiate and carry the project through startup 

and shakedown. Provide a detailed 

description of the project timeline, including 

system and site design, permits and 

agreements, equipment procurement, and 

system installation from excavation through 

startup and shakedown. 

(f) Project economic assessment. Provide a 

study that describes the costs and revenues 

of the proposed project to demonstrate the 

financial performance of the project, 

including the calculation of simple payback. 

Provide a detailed analysis and description of 

project costs, including design, permitting, 

equipment, site preparation, system 

installation, system startup and shakedown, 

warranties, insurance, financing, professional 

services, and operations and maintenance 

costs. Provide a detailed description of 

applicable investment incentives, 

productivity incentives, loans, and grants. 

Provide a detailed description of historic or 

expected energy use and expected energy 

offsets or sales on a monthly and annual 

basis. In addition, provide other information 

necessary to assess the project’s cost 

effectiveness. 

(g) Equipment procurement. Demonstrate 

that equipment required by the system is 

available and can be procured and delivered 


sroberts on DSK69SOYB1PROD with RULES
21162 Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Rules and Regulations 

within the proposed project development 

schedule. Small wind systems may be 

constructed of components manufactured in 

more than one location. Provide a description 

of any unique equipment procurement issues 

such as scheduling and timing of component 

manufacture and delivery, ordering, 

warranties, shipping, receiving, and on-site 

storage or inventory. Provide a detailed 

description of equipment certification. 

Identify all the major equipment that is 

proprietary and justify how this unique 

equipment is needed to meet the 

requirements of the proposed design. Include 

a statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. Describe fully 

the management of and plan for site 

development and system installation, 

provide details regarding the scheduling of 

major installation equipment, including 

cranes and other devices needed for project 

construction, and provide a description of 

the startup and shakedown specifications 

and process and the conditions required for 

startup and shakedown for each equipment 

item individually and for the system as a 

whole. Include a statement from the 

applicant certifying that equipment 

installation will be made in accordance with 

all applicable safety and work rules. 

(i) Operations and maintenance. Identify 

the operations and maintenance 

requirements of the system necessary for the 

system to operate as designed over the design 

life. The application must: 

(1) Ensure that systems must have at least 

a 5-year warranty for equipment and a 

commitment from the supplier to have spare 

parts available. Provide information 

regarding system warranty and availability of 

spare parts; 

(2) Describe the routine operations and 

maintenance requirements of the proposed 

system, including maintenance schedules for 

the mechanical, electrical, and software 

systems; 

(3) Provide historical or engineering 

information that supports expected design 

life of the system and timing of major 

component replacement or rebuilds. Include 

in the discussion, costs and labor associated 

with the operation and maintenance of the 

system, and plans for in-sourcing or outsourcing; and 

(4) For owner maintained portions of the 

system, describe any unique knowledge, 

skills, or abilities needed for service 

operations or maintenance. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. Describe the budget for and any unique 

concerns associated with the dismantling and 

disposal of project components and their 

wastes. 

Section 9. Wind, Large 

The technical requirements specified in 

this section apply to wind energy systems, 

which are, as defined in § 4280.103, wind 

energy projects for which the rated power of 

the individual wind turbine(s) is larger than 

100kW. 

(a) Qualifications of project team. The large 

wind project team should consist of a project 

manager, a meteorologist, an equipment 

supplier, a project engineer, a primary or 

general contractor, construction contractor, 

and a system operator and maintainer and, in 

some cases, the owner of the application or 

load served by the system. One individual or 

entity may serve more than one role. 

Authoritative evidence that project team 

service providers have the necessary 

professional credentials or relevant 

experience to perform the required services 

must be provided. Authoritative evidence 

that vendors of proprietary components can 

provide necessary equipment and spare parts 

for the system to operate over its design life 

must also be provided. The application must: 

(1) Discuss the proposed project delivery 

method. Such methods include a design, bid, 

build where a separate engineering firm may 

design the project and prepare a request for 

bids and the successful bidder constructs the 

project at the applicant’s risk, and a design/ 

build method, often referred to as turnkey, 

where the applicant establishes the 

specifications for the project and secures the 

services of a developer who will design and 

build the project at the developer’s risk; 

(2) Discuss the large wind turbine 

manufacturers and other equipment 

suppliers of major components being 

considered in terms of the length of time in 

business and the number of units installed at 

the capacity and scale being considered; 

(3) Discuss the project manager, equipment 

supplier, project engineer, and construction 

contractor qualifications for engineering, 

designing, and installing large wind systems, 

including any relevant certifications by 

recognized organizations. Provide a list of the 

same or similar projects designed, installed, 

or supplied and currently operating with 

references, if available; 

(4) Discuss the qualifications of the 

meteorologist, including references; and 

(5) Describe system operator’s 

qualifications and experience for servicing, 

operating, and maintaining the system for the 

proposed application. Provide a list of the 

same or similar projects designed, installed, 

or supplied and currently operating with 

references, if available. 

(b) Agreements, permits, and certifications. 

Identify all necessary agreements and permits 

required for the project and the status and 

schedule for securing those agreements and 

permits, including the items specified in 

paragraphs (b)(1) through (6). 

(1) Identify zoning, building, and electrical 

code issues, and required permits and the 

anticipated schedule for meeting those 

requirements and securing those permits. 

(2) Identify land use agreements required 

for the project and the anticipated schedule 

for securing the agreements and the term of 

those agreements. 

(3) Identify available component 

warranties for the specific project location 

and size. 

(4) For systems planning to interconnect 

with a utility, describe the utility’s system 

interconnection requirements, power 

purchase agreements, or licenses where 

required and the anticipated schedule for 

meeting those requirements and obtaining 

those agreements. 

(5) Identify all environmental issues, 

including environmental compliance issues, 

associated with the project on Form RD 

1940–20, ‘‘Request for Environmental 

Information,’’ and in compliance with 7 CFR 

part 1940, subpart G of this title. 

(6) Submit a statement certifying that the 

project will be installed in accordance with 

applicable local, State, and national codes 

and regulations. 

(c) Resources assessment. Provide adequate 

and appropriate data to demonstrate the 

amount of renewable resource available. 

Projects greater than 500kW must obtain 

wind data from the proposed project site. For 

such projects, describe the proposed 

measurement setup for the collection of the 

wind resource data. For proposed projects 

with an established wind resource, provide a 

summary of the wind resource and the 

specifications of the measurement setup. 

Large wind systems larger than 500kW in 

size will typically require at least 1 year of 

on-site monitoring. If less than 1 year of data 

is used, the qualified meteorological 

consultant must provide a detailed analysis 

of the correlation between the site data and 

a nearby, long-term measurement site. 

(d) Design and engineering. Provide 

authoritative evidence that the system will be 

designed and engineered so as to meet its 

intended purpose, will ensure public safety, 

and will comply with applicable laws, 

regulations, agreements, permits, codes, and 

standards. Large wind systems must be 

engineered by a qualified party. Systems 

must be engineered as complete, integrated 

systems with matched components. The 

engineering must be comprehensive, 

including site selection, turbine selection, 

tower selection, tower foundation, design of 

the local collection grid, interconnection 

equipment selection, and system monitoring 

equipment. For stand-alone, non-grid 

applications, engineering information must 

be provided that demonstrates appropriate 

matching of wind turbine and load. 

(1) Provide a concise, but complete, 

description of the large wind project, 

including location of the project, proposed 

turbine specifications, tower height and type 

of tower, the collection grid, interconnection 

equipment, and monitoring equipment. 

Identify possible vendors and models of 

major system components. Provide the 

expected system energy production based on 

available wind resource data on a monthly 

and annual basis. For wind projects larger 

than 500kW in size, provide the expected 

system energy production over the life of the 

project, including a discussion on interannual variation using a comparison of the 

on-site monitoring data with long-term 

meteorological data from a nearby monitored 

site. 

(2) Describe the project site and address 

issues such as site access, proximity to the 

electrical grid or application load, 

environmental concerns with emphasis on 

historic properties, visibility, noise, bird and 

bat populations, and wildlife habitat 

destruction and/or fragmentation, 

construction, and installation issues and 


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whether special circumstances such as 

proximity to airports exist. 

(e) Project development schedule. Identify 

each significant task, its beginning and end, 

and its relationship to the time needed to 

initiate and carry the project through startup 

and shakedown. Provide a detailed 

description of the project timeline, including 

resource assessment, system and site design, 

permits and agreements, equipment 

procurement, and system installation from 

excavation through startup and shakedown. 

(f) Project economic assessment. Provide a 

study that describes the costs and revenues 

of the proposed project to demonstrate the 

financial performance of the proposed 

project. Provide a detailed analysis and 

description of project costs, including project 

management, resource assessment, project 

design, project permitting, land agreements, 

equipment, site preparation, system 

installation, startup and shakedown, 

warranties, insurance, financing, professional 

services, and operations and maintenance 

costs. Provide a detailed description of 

applicable investment incentives, 

productivity incentives, loans, and grants. 

Provide a detailed analysis and description of 

annual project revenues, including electricity 

sales, production tax credits, revenues from 

green tags, and any other production 

incentive programs throughout the life of the 

project. Provide a description of planned 

contingency fees or reserve funds to be used 

for unexpected large component replacement 

or repairs and for low productivity periods. 

In addition, provide other information 

necessary to assess the project’s cost 

effectiveness. 

(g) Equipment procurement. Demonstrate 

that equipment required by the system is 

available and can be procured and delivered 

within the proposed project development 

schedule. Large wind turbines may be 

constructed of components manufactured in 

more than one location. Provide a description 

of any unique equipment procurement issues 

such as scheduling and timing of component 

manufacture and delivery, ordering, 

warranties, shipping, receiving, and on-site 

storage or inventory. Provide a detailed 

description of equipment certification. 

Identify all the major equipment that is 

proprietary and justify how this unique 

equipment is needed to meet the 

requirements of the proposed design. Include 

a statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. Describe fully 

the management of and plan for site 

development and system installation, 

provide details regarding the scheduling of 

major installation equipment, including 

cranes or other devices, needed for project 

construction, and provide a description of 

the startup and shakedown specifications 

and process and the conditions required for 

startup and shakedown for each equipment 

item individually and for the system as a 

whole. Include a statement from the 

applicant certifying that equipment 

installation will be made in accordance with 

all applicable safety and work rules. 

(i) Operations and maintenance. Identify 

the operations and maintenance 

requirements of the system necessary for the 

system to operate as designed over the design 

life. The application must: 

(1) Ensure that systems must have at least 

a 3-year warranty for equipment. Provide 

information regarding turbine warranties and 

availability of spare parts; 

(2) Describe the routine operations and 

maintenance requirements of the proposed 

project, including maintenance schedules for 

the mechanical and electrical systems and 

system monitoring and control requirements; 

(3) Provide information that supports 

expected design life of the system and timing 

of major component replacement or rebuilds; 

(4) Provide and discuss the risk 

management plan for handling large, 

potential failures of major components such 

as the turbine gearbox or rotor. Include in the 

discussion, costs and labor associated with 

the operation and maintenance of the system, 

and plans for in-sourcing or out-sourcing; 

(5) Describe opportunities for technology 

transfer for long-term project operations and 

maintenance by a local entity or owner/ 

operator; and 

(6) For owner maintained portions of the 

system, describe any unique knowledge, 

skills, or abilities needed for service 

operations or maintenance. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. Describe the budget for and any unique 

concerns associated with the dismantling and 

disposal of project components and their 

wastes. 

Section 10. Energy Efficiency Improvements 

The technical requirements specified in 

this section apply to projects that involve 

energy efficiency improvements, which are, 

as defined in § 4280.103, improvements to a 

facility, building, or process that reduce 

energy consumption, or reduce energy 

consumed per square foot. The system 

engineering for such projects must be 

performed by a qualified party or certified 

Professional Engineer. 

(a) Qualifications of project team. The 

energy efficiency project team is expected to 

consist of an energy auditor or other service 

provider, a project manager, an equipment 

supplier of major components, a project 

engineer, and a construction contractor or 

system installer. One individual or entity 

may serve more than one role. Authoritative 

evidence that project team service providers 

have the necessary professional credentials 

or relevant experience to perform the 

required services must be provided. 

Authoritative evidence that vendors of 

proprietary components can provide 

necessary equipment and spare parts for the 

system to operate over its design life must 

also be provided. The application must: 

(1) Discuss the qualifications of the various 

project team members, including any 

relevant certifications by recognized 

organizations; 

(2) Describe qualifications or experience of 

the team as related to installation, service, 

operation and maintenance of the project; 

(3) Provide a list of the same or similarly 

engineered projects designed, installed, or 

supplied by the team or by team members 

and currently operating. Provide references if 

available; and 

(4) Discuss the manufacturers of major 

energy efficiency equipment being 

considered, including length of time in 

business. 

(b) Agreements, permits, and certifications. 

Identify all necessary agreements and permits 

required for the energy efficiency 

improvement(s) and the status and 

anticipated schedule for securing those 

agreements and permits, including the items 

specified in paragraphs (b)(1) through (4). 

The applicant must also submit a statement 

certifying that the applicant will comply with 

all necessary agreements and permits for the 

energy efficiency improvement(s). 

(1) Identify building code, electrical code, 

and zoning issues and required permits, and 

the anticipated schedule for meeting those 

requirements and securing those permits. 

(2) Identify available component 

warranties for the specific project location 

and size. 

(3) Identify all environmental issues, 

including environmental compliance issues, 

associated with the project on Form RD 

1940–20, ‘‘Request for Environmental 

Information,’’ and in compliance with 7 CFR 

part 1940, subpart G of this title. 

(4) Submit a statement certifying that the 

project will be installed in accordance with 

applicable local, State, and national codes 

and regulations. 

(c) Energy audits. For all energy efficiency 

improvement projects, provide adequate and 

appropriate evidence of energy savings 

expected when the system is operated as 

designed. 

(1) An energy audit is a written report by 

an independent, qualified party that 

documents current energy usage, 

recommended potential improvements and 

their costs, energy savings from these 

improvements, dollars saved per year, and 

simple payback. The methodology of the 

energy audit must meet professional and 

industry standards. 

(2) The energy audit must cover the 

following: 

(i) Situation report. Provide a narrative 

description of the facility or process, its 

energy system(s) and usage, and activity 

profile. Also include price per unit of energy 

(electricity, natural gas, propane, fuel oil, 

renewable energy, etc.,) paid by the customer 

on the date of the audit. Any energy 

conversion should be based on use rather 

than source. 

(ii) Potential improvements. List specific 

information on all potential energy-saving 

opportunities and the associated costs. 

(iii) Technical analysis. Discuss the 

interactions of the potential improvements 

with existing energy systems. 

(A) Estimate the annual energy and energy 

costs savings expected from each 

improvement identified in the potential 

project. 

(B) Calculate all direct and attendant 

indirect costs of each improvement. 

(C) Rank potential improvement measures 

by cost-effectiveness. 


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(iv) Potential improvement description. 

Provide a narrative summary of the potential 

improvement and its ability to provide 

needed benefits, including a discussion of 

non-energy benefits such as project reliability 

and durability. 

(A) Provide preliminary specifications for 

critical components. 

(B) Provide preliminary drawings of project 

layout, including any related structural 

changes. 

(C) Document baseline data compared to 

projected consumption, together with any 

explanatory notes. Provide the actual total 

quantity of energy used (BTU) in the original 

building and/or equipment in the 12 months 

prior to the EEI project and the projected 

energy usage after the EEI project shall be the 

projected total quantity of energy used (BTU) 

on an annual basis for the same size or 

capacity as the original building or 

equipment. For energy efficiency 

improvement to equipment, if the new piece 

of equipment has a different capacity than 

the piece of equipment being replaced, the 

projected total quantity of energy used for the 

new piece of equipment shall be adjusted 

based on the ratio of the capacity of the 

replaced piece of equipment to the capacity 

of the new piece of equipment in accordance 

with the regulation. When appropriate, show 

before-and-after data in terms of 

consumption per unit of production, time or 

area. Include at least 1 year’s bills for those 

energy sources/fuel types affected by this 

project. Also submit utility rate schedules, if 

appropriate. 

(D) Identify significant changes in future 

related operations and maintenance costs. 

(E) Describe explicitly how outcomes will 

be measured. 

(d) Design and engineering. Provide 

authoritative evidence that the energy 

efficiency improvement(s) will be designed 

and engineered so as to meet its intended 

purpose, will ensure public safety, and will 

comply with applicable laws, regulations, 

agreements, permits, codes, and standards. 

(1) Energy efficiency improvement projects 

in excess of $50,000 must be engineered by 

a qualified party. Systems must be 

engineered as a complete, integrated system 

with matched components. 

(2) For all energy efficiency improvement 

projects, identify and itemize major energy 

efficiency improvements, including 

associated project costs. Specifically 

delineate which costs of the project are 

directly associated with energy efficiency 

improvements. Describe the components, 

materials or systems to be installed and how 

they improve the energy efficiency of the 

process or facility being modified. Discuss 

passive improvements that reduce energy 

loads, such as improving the thermal 

efficiency of a storage facility, and active 

improvements that directly reduce energy 

consumption, such as replacing existing 

energy consuming equipment with high 

efficiency equipment, as separate topics. 

Discuss any anticipated synergy between 

active and passive improvements or other 

energy systems. Include in the discussion 

any change in on-site effluents, pollutants, or 

other by-products. 

(3) Identify possible suppliers and models 

of major pieces of equipment. 

(e) Project development schedule. Identify 

each significant task, its beginning and end, 

and its relationship to the time needed to 

initiate and carry the project through startup 

and shakedown. Provide a detailed 

description of the project timeline, including 

energy audit (if applicable), system and site 

design, permits and agreements, equipment 

procurement, and system installation from 

site preparation through startup and 

shakedown. 

(f) Project economic assessment. For 

projects whose total eligible costs are greater 

than $50,000, provide an analysis of the 

proposed project to demonstrate its financial 

performance, including the calculation of 

simple payback. The analysis should include 

applicable investment incentives, 

productivity incentives, loans and grants, 

and expected energy offsets or sales on a 

monthly and annual basis. In addition, 

provide other information necessary to assess 

the project’s cost effectiveness. 

(g) Equipment procurement. Demonstrate 

that equipment required for the energy 

efficiency improvement(s) is available and 

can be procured and delivered within the 

proposed project development schedule. 

Energy efficiency improvements may be 

constructed of components manufactured in 

more than one location. Provide a description 

of any unique equipment procurement issues 

such as scheduling and timing of component 

manufacture and delivery, ordering, 

warranties, shipping, receiving, and on-site 

storage or inventory. Provide a detailed 

description of equipment certification. 

Identify all the major equipment that is 

proprietary and justify how this unique 

equipment is needed to meet the 

requirements of the proposed design. Include 

a statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. Describe fully 

the management of and plan for installation 

of the energy efficiency improvement(s), 

identify specific issues associated with 

installation, provide details regarding the 

scheduling of major installation equipment 

needed for project discussion, and provide a 

description of the startup and shakedown 

specifications and process and the conditions 

required for startup and shakedown for each 

equipment item individually and for the 

system as a whole. Include in this discussion 

any unique concerns, such as the effects of 

energy efficiency improvements on system 

power quality. Include a statement from the 

applicant certifying that equipment 

installation will be made in accordance with 

all applicable safety and work rules. 

(i) Operations and maintenance. Identify 

the operations and maintenance 

requirements of the energy efficiency 

improvement(s) necessary for the energy 

efficiency improvement(s) to perform as 

designed over the design life. The application 

must: 

(1) Provide information regarding 

component warranties and the availability of 

spare parts; 

(2) Describe the routine operation and 

maintenance requirements of the proposed 

project, including maintenance schedules for 

the mechanical and electrical systems and 

system monitoring and control requirements; 

(3) Provide information that supports 

expected design life of the improvement(s) 

and timing of major component replacement 

or rebuilds; 

(4) Provide and discuss the risk 

management plan for handling large, 

potential failures of major components. 

Include in the discussion, costs and labor 

associated with the operation and 

maintenance of the improvement(s), and 

plans for in-sourcing or out-sourcing; and 

(5) For owner maintained portions of the 

improvement(s), describe any unique 

knowledge, skills, or abilities needed for 

service operations or maintenance. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. Describe the budget for and any unique 

concerns associated with the dismantling and 

disposal of project components and their 

wastes. 

Appendix C to Subpart B of Part 4280— 

Technical Report for Hydropower 

Projects 

The technical requirements specified in 

this appendix apply to all hydropower 

projects. Hydropower projects are those 

projects that create hydroelectric or ocean 

energy. 

The Technical Report for hydropower 

projects must demonstrate that the project 

design, procurement, installation, startup, 

operation, and maintenance of the renewable 

energy system will operate or perform as 

specified over its design life in a reliable and 

a cost-effective manner. The Technical 

Report must also identify all necessary 

project agreements, demonstrate that those 

agreements will be in place, and that 

necessary project equipment and services are 

available over the design life. 

All technical information provided must 

follow the format specified in this appendix. 

Supporting information may be submitted in 

other formats. Design drawings and process 

flowcharts are encouraged as exhibits. A 

discussion of each topic is not necessary if 

the topic is not applicable to the specific 

project. Questions identified in the Agency’s 

technical review of the project must be 

answered to the Agency’s satisfaction before 

the application will be approved. The 

applicant must submit the original Technical 

Report plus one copy to the Rural 

Development State Office. Hydropower 

projects with total eligible project costs 

greater than $400,000 require the services of 

a licensed professional engineer (PE) or team 

of PEs. Depending on the level of engineering 

required for the specific project or if 

necessary to ensure public safety, the 

services of a licensed PE or a team of licensed 

PEs may be required for smaller projects. 

(a) Qualifications of project team. The 

hydropower project team should consist of a 

system designer, a project manager, an 

equipment supplier, a project engineer, a 

construction contractor, and a system 

operator and maintainer. One individual or 

entity may serve more than one role. The 


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project team must have demonstrated 

expertise in hydropower development, 

engineering, installation, and maintenance. 

Authoritative evidence that project team 

service providers have the necessary 

professional credentials or relevant 

experience to perform the required services 

must be provided. Authoritative evidence 

that vendors of proprietary components can 

provide necessary equipment and spare parts 

for the system to operate over its design life 

must also be provided. The application must: 

(1) Discuss the proposed project delivery 

method. Such methods include a design, bid, 

build where a separate engineering firm may 

design the project and prepare a request for 

bids and the successful bidder constructs the 

project at the applicant’s risk, and a design/ 

build method, often referred to as turnkey, 

where the applicant establishes the 

specifications for the project and secures the 

services of a developer who will design and 

build the project at the developer’s risk; 

(2) Discuss the hydropower equipment 

manufacturers of major components being 

considered in terms of the length of time in 

business and the number of units installed at 

the capacity and scale being considered; 

(3) Discuss the project manager, equipment 

supplier, system designer, project engineer, 

and construction contractor qualifications for 

engineering, designing, and installing 

hydropower systems, including any relevant 

certifications by recognized organizations. 

Provide a list of the same or similar projects 

designed, installed, or supplied and currently 

operating with references, if available; and 

(4) Describe the system operator’s 

qualifications and experience for servicing, 

operating, and maintaining hydropower 

projects. Provide a list of the same or similar 

projects designed, installed, or supplied and 

currently operating with references, if 

available. 

(b) Agreements, permits, and certifications. 

Identify all necessary agreements and permits 

required for the project and the status and 

schedule for securing those agreements and 

permits, including the items specified in 

paragraphs (b)(1) through (b)(6). 

(1) Identify zoning and code issues and 

required permits and the anticipated 

schedule for meeting those requirements and 

securing those permits. This list should 

include all local, state, and federal permits 

required, estimated timeline for each permit 

and current status of acquiring each permit. 

(2) Identify land use agreements required 

for the project and the anticipated schedule 

for securing the agreements and the term of 

those agreements. 

(3) Identify available component 

warranties for the specific project location 

and size. 

(4) For systems planning to interconnect 

with a utility, describe the utility’s system 

interconnection requirements, power 

purchase agreements, or licenses where 

required and the anticipated schedule for 

meeting those requirements and obtaining 

those agreements. 

(5) Identify all environmental issues, 

including environmental compliance issues, 

associated with the project on Form RD 

1940–20, ‘‘Request for Environmental 

Information,’’ and in compliance with 7 CFR 

part 1940, subpart G. (Note: The 

environmental review process, including all 

required publications, must be completed 

prior to approval of any Rural Development 

funding.) The applicant may want to work 

with all Federal organizations involved with 

the project to promulgate a single 

environmental review document. 

(6) Submit a statement certifying that the 

project will be installed in accordance with 

applicable local, State, and national codes, 

regulations, and permits. 

(c) Resource assessment. Provide adequate 

and appropriate data to demonstrate the 

amount of renewable resource available. 

Indicate the quality of the resource, including 

temperature (if applicable), flow, and 

sustainability of the resource, including a 

summary of the resource evaluation process 

and the specifications of the measurement 

setup and the date and duration of the 

evaluation process and proximity to the 

proposed site. If less than 1 year of data is 

used, a qualified consultant must provide a 

detailed analysis of the correlation between 

the site data and a nearby, long-term 

measurement site. 

(d) Design and engineering. Provide 

authoritative evidence that the system will be 

designed and engineered so as to meet its 

intended purpose, will ensure public safety, 

and will comply with applicable laws, 

regulations, agreements, permits, codes, and 

standards. Projects shall be engineered by a 

qualified party. Systems must be engineered 

as a complete, integrated system with 

matched components. The engineering must 

be comprehensive, including site selection, 

system and component selection, conversion 

system component selection, design of the 

local collection grid, interconnection 

equipment selection, and system monitoring 

equipment. Systems must be constructed by 

a qualified party. 

(1) Provide a concise but complete 

description of the hydropower project, 

including location of the project, resource 

characteristics, system specifications, electric 

power system interconnection equipment 

and project monitoring equipment. Identify 

possible vendors and models of major system 

components. Provide the expected system 

energy production on a monthly and annual 

basis. 

(2) Describe the project site and address 

issues such as site access, proximity to the 

electrical grid, environmental concerns with 

emphasis on land use, air quality, water 

quality, habitat fragmentation, visibility, 

noise, construction, and installation issues. 

Identify any unique construction and 

installation issues. 

(e) Project development schedule. Identify 

each significant task, its beginning and end, 

and its relationship to the time needed to 

initiate and carry the project through startup 

and shakedown. Provide a detailed 

description of the project timeline, including 

resource assessment, system and site design, 

permits and agreements, equipment 

procurement, and system installation from 

excavation through startup and shakedown. 

(f) Project economic assessment. Provide a 

study that describes the costs and revenues 

of the proposed project to demonstrate the 

financial performance of the proposed 

project. Provide a detailed analysis and 

description of project costs, including project 

management, resource assessment, project 

design, project permitting, land agreements, 

equipment, site preparation, system 

installation, startup and shakedown, 

warranties, insurance, financing, professional 

services, and operations and maintenance 

costs. Provide a detailed description of 

applicable investment incentives, 

productivity incentives, loans, and grants. 

Provide a detailed analysis and description of 

annual project revenues, including electricity 

sales, production tax credits, revenues from 

green tags, and any other production 

incentive programs throughout the life of the 

project. Provide a description of planned 

contingency fees or reserve funds to be used 

for unexpected large component replacement 

or repairs and for low productivity periods. 

In addition, provide other information 

necessary to assess the project’s cost 

effectiveness. 

(g) Equipment procurement. Demonstrate 

that equipment required by the system is 

available and can be procured and delivered 

within the proposed project development 

schedule. Hydropower systems may be 

constructed of components manufactured in 

more than one location. Provide a description 

of any unique equipment procurement issues 

such as scheduling and timing of component 

manufacture and delivery, ordering, 

warranties, shipping, receiving, and on-site 

storage or inventory. Provide a detailed 

description of equipment certification. 

Identify all the major equipment that is 

proprietary and justify how this unique 

equipment is needed to meet the 

requirements of the proposed design. Include 

a statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015 of this title. 

(h) Equipment installation. Describe fully 

the management of and plan for site 

development and system installation, 

provide details regarding the scheduling of 

major installation equipment, including 

cranes, barges or other devices, needed for 

project construction, and provide a 

description of the startup and shakedown 

specifications and process and the conditions 

required for startup and shakedown for each 

equipment item individually and for the 

system as a whole. Include a statement from 

the applicant certifying that equipment 

installation will be made in accordance with 

all applicable safety and work rules. 

(i) Operations and maintenance. Identify 

the operations and maintenance 

requirements of the system necessary for the 

system to operate as designed over the design 

life. The application must: 

(1) Ensure that systems must have at least 

a 3-year warranty for equipment. Provide 

information regarding turbine warranties and 

availability of spare parts; 

(2) Describe the routine operations and 

maintenance requirements of the proposed 

project, including maintenance schedules for 

the mechanical and electrical systems and 

system monitoring and control requirements; 

(3) Provide information that supports 

expected design life of the system and timing 

of major component replacement or rebuilds; 


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(4) Provide and discuss the risk 

management plan for handling large, 

potential failures of major components such 

as the turbine gearbox or rotor. Include in the 

discussion, costs and labor associated with 

the operation and maintenance of the system, 

and plans for in-sourcing or out-sourcing; 

(5) Describe opportunities for technology 

transfer for long-term project operations and 

maintenance by a local entity or owner/ 

operator; and 

(6) For owner maintained portions of the 

system, describe any unique knowledge, 

skills, or abilities needed for service 

operations or maintenance. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. Describe the budget for and any unique 

concerns associated with the dismantling and 

disposal of project components and their 

wastes. 

Appendix D to Subpart B of Part 4280— 

Technical Report for Flexible Fuel 

Pumps 

The technical requirements specified in 

this appendix apply to flexible fuel pump 

projects, as defined in § 4280.103. 

(a) Qualifications of project team. The 

flexible fuel pump project team is expected 

to consist of a project manager, an equipment 

supplier of major components, a project 

engineer, and a construction contractor or 

system installer. One individual or entity 

may serve more than one role. Authoritative 

evidence that project team service providers 

have the necessary professional credentials 

or relevant experience to perform the 

required services must be provided. 

Authoritative evidence that vendors of 

proprietary components can provide 

necessary equipment and spare parts for the 

system to operate over its design life must 

also be provided. The application must: 

(1) Discuss the proposed project delivery 

method. Such methods include a design, bid, 

build where a separate engineering firm may 

design the project and prepare a request for 

bids and the successful bidder constructs the 

project at the applicant’s risk, and a design/ 

build method, often referred to as turnkey, 

where the applicant establishes the 

specifications for the project and secures the 

services of a developer who will design and 

build the project at the developer’s risk; 

(2) Discuss the flexible fuel system 

equipment, manufacturers of major 

components being considered in terms of the 

length of time in business and the number of 

units installed at the capacity and scale being 

considered; 

(3) Discuss the project manager, equipment 

supplier, system designer, project engineer, 

and construction contractor qualifications for 

engineering, designing, and installing fuel 

dispensing systems, including any relevant 

certifications by recognized organizations. 

Provide a list of the same or similar projects 

designed, installed, or supplied and currently 

operating with references, if available; and 

(4) Describe the system operator’s 

qualifications and experience for servicing, 

operating, and maintaining fuel dispensing 

equipment or projects. Provide a list of the 

same or similar projects designed, installed, 

or supplied and currently operating with 

references, if available. 

(b) Agreements, permits, and certifications. 

Identify all necessary agreements and permits 

required for the project and the status and 

schedule for securing those agreements and 

permits, including the items specified in 

paragraphs (b)(1) through (b)(8). 

(1) Include Underwriters Laboratory 

certifications for installed flexible fuel 

pumps. 

(2) Identify zoning and code issues and 

required permits and the anticipated 

schedule for meeting those requirements and 

securing those permits. 

(3) Identify licenses where required and 

the schedule for obtaining those licenses. 

(4) Identify land use agreements required 

for the project and the anticipated schedule 

for securing the agreements and the term of 

those agreements. 

(5) Identify any permits or agreements 

required for solid, liquid, and gaseous 

emissions or effluents and the schedule for 

securing those permits and agreements. 

(6) Identify available component 

warranties for the specific project location 

and size. 

(7) Identify all environmental issues, 

including environmental compliance issues, 

associated with the project on Form RD 

1940–20, ‘‘Request for Environmental 

Information,’’ and in compliance with 7 CFR 

part 1940, subpart G of this title. 

(8) Submit a statement certifying that the 

project will be installed in accordance with 

applicable local, State, and national codes 

and regulations. 

(c) Resource assessment. Provide adequate 

and appropriate data to demonstrate the 

amount of renewable fuels available. Indicate 

the type, quantity, and quality and the 

demand for that fuel in its service area. 

(d) Design and engineering. Provide 

authoritative evidence that the system will be 

designed and engineered so as to meet its 

intended purpose, will ensure public safety, 

and will comply with applicable laws, 

regulations, agreements, permits, codes, and 

standards. Projects shall be engineered by a 

qualified party. Systems must be engineered 

as a complete, integrated system with 

matched components. The engineering must 

be comprehensive, including site selection, 

system and component selections, and 

system monitoring equipment. Systems must 

be constructed by a qualified party. 

(1) Provide a concise but complete 

description of the flexible fuel pump project, 

including location of the project, resource 

characteristics, system specifications, electric 

power system, fire suppression systems, and 

monitoring equipment. Identify possible 

vendors and models of major system 

components. Describe the system capacity, 

storage tank(s), and dispensing apparatus of 

the proposed system as rated and as expected 

in actual field conditions. 

(2) Describe the project site and address 

issues such as site access, foundations, 

backup equipment when applicable, and 

environmental concerns with emphasis on 

land use, air quality, water quality, soil 

degradation, habitat fragmentation, land use, 

visibility, odor, noise, construction, and 

installation issues. Identify any unique 

construction and installation issues. 

(e) Project development schedule. Identify 

each significant task, its beginning and end, 

and its relationship to the time needed to 

initiate and carry the project through startup 

and shakedown. Provide a detailed 

description of the project timeline, including 

resource assessment, system and site design, 

permits and agreements, equipment 

procurement, and system installation from 

excavation through startup and shakedown. 

(f) Project economic assessment. Provide a 

report that describes the costs and revenues 

of the proposed project to demonstrate the 

financial performance of the project (the 

projected increase in annual net income 

resulting by the installation of the project) 

and include the calculation of simple 

payback. Provide a detailed analysis and 

description of project costs, including project 

management, resource assessment, project 

design, project permitting, equipment, site 

preparation, system installation, startup and 

shakedown, warranties, insurance, financing, 

professional services, and operations and 

maintenance costs. Provide a detailed 

analysis and description of annual project 

revenues and expenses. Provide a detailed 

description of applicable investment 

incentives, productivity incentives, loans, 

and grants. In addition, provide other 

information necessary to assess the project’s 

cost effectiveness. 

(g) Equipment procurement. Demonstrate 

that equipment required by the system is 

available and can be procured and delivered 

within the proposed project development 

schedule. Flexible fuel systems may be 

constructed of components manufactured in 

more than one location. Provide a description 

of any unique equipment procurement issues 

such as scheduling and timing of component 

manufacture and delivery, ordering, 

warranties, shipping, receiving, and on-site 

storage or inventory. Identify all the major 

equipment that is proprietary and justify how 

this unique equipment is needed to meet the 

requirements of the proposed design. Include 

a statement from the applicant certifying that 

‘‘open and free’’ competition will be used for 

the procurement of project components in a 

manner consistent with the requirements of 

7 CFR part 3015. 

(h) Equipment installation. Fully describe 

the management of and plan for site 

development and system installation, 

provide details regarding the scheduling of 

major installation equipment needed for 

project construction, and provide a 

description of the startup and shakedown 

specifications and process and the conditions 

required for startup and shakedown for each 

equipment item individually and for the 

system as a whole. Include a statement from 

the applicant certifying that equipment 

installation will be made in accordance with 

all applicable safety and work rules. 

(i) Operations and maintenance. Identify 

the operations and maintenance 

requirements of the system necessary for the 

system to operate as designed over the design 

life. In addition: 

(1) Provide information regarding available 

system and component warranties and 

availability of spare parts; 


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Federal Register / Vol. 76, No. 72 / Thursday, April 14, 2011 / Rules and Regulations 21167 

(2) Describe the routine operations and 

maintenance requirements of the proposed 

system, including maintenance schedule for 

the mechanical, piping, and electrical 

systems and system monitoring and control 

requirements. Provide information that 

supports expected design life of the system 

and timing of major component replacement 

or rebuilds. Discuss the costs and labor 

associated with the operation and 

maintenance of the system, and plans for insourcing or out-sourcing. Water infiltration 

should be checked daily. Replace filters if 

pump/dispenser is running slowly. 

Check/calibrate pump two weeks after initial 

load conversion. 

(j) Dismantling and disposal of project 

components. Describe a plan for dismantling 

and disposing of project components and 

associated wastes at the end of their useful 

lives. Describe the budget for and any unique 

concerns associated with the dismantling and 

disposal of project components and their 

wastes. 

Appendix E to Subpart B of Part 4280— 

Feasibility Study Content 

Elements in an acceptable feasibility study 

include, but are not necessarily limited to, 

the elements specified in Sections A through 

G, as applicable, of this Appendix. Both a 

technical report for the project and an 

economic analysis of the project are required 

as part of the feasibility study. The technical 

report to be provided must conform to that 

required under Appendix A, B, C, or D of this 

subpart, as applicable. 

Section A. Executive Summary. Provide an 

introduction and overview of the project. In 

the overview, describe the nature and scope 

of the proposed project, including purpose, 

project location, design features, capacity, 

and estimated total capital cost. Include a 

summary of each of the elements of the 

feasibility study, including: 

(1) Economic feasibility determinations; 

(2) Market feasibility determinations; 

(3) Technical feasibility determinations; 

(4) Financial feasibility determinations; 

(5) Management feasibility determinations; 

and 

(6) Recommendations for implementation 

of the proposed project. 

Section B. Economic Feasibility. Provide 

information regarding project site; the 

availability of trained or trainable labor; and 

the availability of infrastructure, including 

utilities, and rail, air and road service to the 

site. Discuss feedstock source management, 

including feedstock collection, pre-treatment, 

transportation, and storage, and provide 

estimates of feedstock volumes and costs. 

Discuss the proposed project’s potential 

impacts on existing manufacturing plants or 

other facilities that use similar feedstock if 

the proposed technology is adopted. Provide 

projected impacts of the proposed project on 

resource conservation, public health, and the 

environment. Provide an overall economic 

impact of the project including any 

additional markets created (e.g., for 

agricultural and forestry products and 

agricultural waste material) and potential for 

rural economic development. Provide 

feasibility/plans of project to work with 

producer associations or cooperatives 

including estimated amount of annual 

feedstock and biofuel and byproduct dollars 

from producer associations and cooperatives. 

Section C. Market Feasibility. Provide 

information on the sales organization and 

management. Discuss the nature and extent 

of market and market area and provide 

marketing plans for sale of projected output, 

including both the principal products and 

the by-products. Discuss the extent of 

competition including other similar facilities 

in the market area. Provide projected total 

supply of and projected competitive demand 

for raw materials. Describe the procurement 

plan, including projected procurement costs 

and the form of commitment of raw materials 

(e.g., marketing agreements, etc.). Identify 

commitments from customers or brokers for 

both the principal products and the byproducts. Discuss all risks related to the 

industry, including industry status. 

Section D. Technical Feasibility. The 

technical feasibility report shall be based 

upon verifiable data and contain sufficient 

information and analysis so that a 

determination may be made on the technical 

feasibility of achieving the levels of income 

or production that are projected in the 

financial statements. The project engineer or 

architect is considered an independent party 

provided neither the principals of the firm 

nor any individual of the firm who 

participates in the technical feasibility report 

has a financial interest in the project. If no 

other individual or firm with the expertise 

necessary to make such a determination is 

reasonably available to perform the function, 

an individual or firm that is not independent 

may be used. 

(1) Identify any constraints or limitations 

in the financial projections and any other 

facility or design-related factors that might 

affect the success of the enterprise. Identify 

and estimate project operation and 

development costs and specify the level of 

accuracy of these estimates and the 

assumptions on which these estimates have 

been based. 

(2) Discuss all risks related to construction 

of the project and regulation and 

governmental action as they affect the 

technical feasibility of the project. 

Section E. Financial Feasibility. Discuss 

the reliability of the financial projections and 

assumptions on which the financial 

statements are based including all sources of 

project capital both private and public, such 

as Federal funds. Provide 3 years (minimum) 

projected Balance Sheets and Income 

Statements and cash flow projections for the 

life of the project. Discuss the ability of the 

business to achieve the projected income and 

cash flow. Provide an assessment of the cost 

accounting system. Discuss the availability of 

short-term credit or other means to meet 

seasonable business costs and the adequacy 

of raw materials and supplies. Provide a 

sensitivity analysis, including feedstock and 

energy costs. Discuss all risks related to the 

project, financing plan, the operational units, 

and tax issues. 

Section F. Management Feasibility. Discuss 

the continuity and adequacy of management. 

Identify applicant and/or management’s 

previous experience concerning the receipt of 

federal financial assistance, including 

amount of funding, date received, purpose, 

and outcome. Discuss all risks related to the 

applicant as a company (e.g., applicant is at 

the Development-Stage) and conflicts of 

interest, including appearances of conflicts of 

interest. 

Section G. Qualifications. Provide a 

resume or statement of qualifications of the 

author of the feasibility study, including 

prior experience. 

Appendixes A and B to Part 4280 

[Removed] 

■ 3. Appendixes A and B to part 4280 

are removed. 

Dated: April 1, 2011. 

Dallas Tonsager, 

Under Secretary, Rural Development. 

[FR Doc. 2011–8460 Filed 4–13–11; 8:45 am] 

BILLING CODE 3410–XY–P 


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