330-270-0040 Use of funds (1) A minimum of 85 percent of the awarded grant funds must be reserved for use by an eligible entity to provide financial assistance to individuals who reside within the entity’s region or who are members of that tribe for the purchase and installation of heat pumps and related upgrades. An eligible entity may use a percentage, as specified in a performance agreement, not to exceed 15 percent, of the awarded grant funds for program related administrative expenses and marketing costs. (2) Eligible administrative and marketing costs include the following costs if they are necessary to administer and market the program: (a) Direct costs to establish, implement, and monitor the program including staffing, materials, supplies, and travel. (b) Other costs the department determines should be eligible because they are necessary to administer or market the program. (3) Ineligible administrative and marketing costs include the following: (a) Existing indirect costs including rent and utility costs. (b) Other costs the department determines should be ineligible. (4) An individual who benefits from the financial assistance must be the owner-occupant of a residential dwelling in Oregon where the heat pump will be installed. (5) Financial assistance may be provided in the following forms: (a) Loans, which must be zero-percent interest. (b) Grants. (c) Rebates. (d) Incentives. (6) To be eligible for financial assistance for its purchase and installation, a heat pump must meet, or exceed, the following minimum requirements and meet the requirements in 330-270-0040(11): (a) A split-system heat pump that has an HSPF2 of 7.5 and a SEER2 of 14.3, or equivalent HSPF and SEER value. (b) A single-package heat pump that has an HSPF2 of 6.7 and a SEER2 of 13.4, or equivalent HSPF and SEER value. (c) A closed loop water-to-air heat pump that has an EER of 17.1 and a COP of 3.6. (d) A open loop water-to-air heat pump that has an EER of 21.1 and a COP of 4.1. (e) A closed loop water-to-water heat pump that has an EER of 16.1 and a COP of 3.1. (f) A open loop water-to-water heat pump that has an EER of 20.1 and a COP of 3.5. (g) A direct geoexchange heat pump that has an EER of 16.0 and a COP of 3.6. (7) The maximum amount per dwelling that may be payable toward the purchase and installation of a heat pump that meets or exceeds the minimum requirements in 330-270-0040(6) but does not meet the minimum requirements in 330-270-0040(8) is $5000, not to exceed 100 percent of the purchase and installation costs of a heat pump. (8) An eligible entity may propose a financial assistance offering higher than that specified in 330-270-0040(7) for a higher efficiency heat pump up to the maximum amount specified in 330-270-0040(9). To be eligible for financial assistance for its purchase and installation, a higher efficiency heat pump must meet or exceed the following requirements and meet the requirements in 330-270-0040(11): (a) A split-system air source heat pump that has an HSPF2 of 8.1 or greater and a SEER2 of 16 or greater, or equivalent HSPF and SEER value. (b) A single-package air source heat pump that has an HSPF2 of 8 or greater and a SEER2 of 16 or greater, or equivalent HSPF and SEER value. (c) A ducted air source heat pump, either packaged or split system that has an HSPF2 of 8.55 or greater and a SEER2 of 16 or greater, or equivalent HSPF and SEER value. (d) A closed loop water-to-air heat pump that has an EER of 18 or greater and a COP of 3.8 or greater. (e) An open loop water-to-air heat pump that has an EER of 22 or greater and a COP of 4.3 or greater. (f) A closed loop water-to-water heat pump that has an EER of 17 or greater and a COP of 3.3 or greater. (g) An open loop water-to-water heat pump that has an EER of 21 or greater and a COP of 3.7 or greater. (h) A direct geoexchange heat pump that has an EER of 17 or greater and a COP of 3.8 or greater (9) The maximum amount per dwelling that may be payable toward the purchase and installation of a heat pump that meets or exceeds the minimum requirements in 330-270-0040(8) is $7000, not to exceed 100 percent of the purchase and installation costs of a heat pump. (10) An eligible entity may propose in their application financial assistance offerings lower than the maximum amounts established in these rules and may propose different levels of financial assistance for different types of heat pumps. (11) To be eligible for financial assistance, the installation of the heat pump must meet the following requirements: (a) The indoor and outdoor units must be designed to be compatible with one another according to the manufacturer’s product specifications, and the proposed system must match the efficiency rating test conditions. The heat pump must be Air-Conditioning, Heating, and Refrigeration Institute (AHRI) certified. (b) The heat pump must be appropriately sized to the space or structure. (c) The heat pump must be installed to heat and cool a living area in a residential dwelling, a space such as a garage is not eligible. (d) The heat pump system must be installed in accordance with the manufacturer’s specifications. (e) The heat pump system must receive all applicable electrical, mechanical or structural permits from the local jurisdiction and pass all final inspections conducted by the authority having jurisdiction. (f) The heat pump’s auxiliary heat control must be set at or below a temperature of 35 degrees Fahrenheit, unless the eligible entity permits a higher temperature setting or in situations when supplemental heating is required during a defrost cycle or system failure. An eligible entity must propose situations in which a higher temperature would be permitted in their application to the program. (g) The heat pump system must be installed by a contractor. A contractor that installs a heat pump, or a subcontractor that installs a heat pump on behalf of a contractor that offers heat pumps for sale, must hold any license, bond, insurance or permit required to sell and install the heat pump. The contractor or any subcontractor performing the installation must maintain all applicable licenses, bonds, insurance or permits required throughout the installation period until the installation of the heat pump is complete. (h) The heat pump system must include at least a five-year warranty against manufacturer defects. (i) The installation of the heat pump system must include at least a one-year labor warranty covering the system. (12) An eligible entity may propose additional project eligibility or higher efficiency requirements for heat pump installations in their application. (13) An eligible entity may propose in their application financial assistance offerings for the purchase and installation of a heating or cooling device that has an efficiency rating similar to or higher than that of a heat pump and that provides additional benefits such as improving indoor air quality or lowering an individual’s energy burden. The proposal must outline the efficiency requirements and required additional benefits of a heating or cooling device that would be required for it to be eligible. The maximum amount per dwelling that may be payable toward the purchase and installation of a heating or cooling device is $4000, not to exceed 100 percent of the purchase and installation costs of a heating or cooling device. (14) The grantee shall reduce the amount payable toward the purchase and installation if the amount combined with other incentives received for the purchase and installation of a heat pump, or heating or cooling device, exceeds 100 percent of the purchase and installation cost. (15) The grantee may use grant funds to cover $4000 per dwelling, up to 100 percent of the costs, for eligible related upgrades that support or enable the use of a heat pump. Eligible related upgrades that support or enable the use of a heat pump include the following: (a) A new electrical panel or other upgrades to the electrical system of a home or building. (b) Weatherization or other structural repairs that reduce home or building heat and cooling loss. (c) Upgrades to improve the airflow of a home or building. (16) The grantee shall reduce the amount payable toward the related eligible upgrades if the amount combined with other incentives received that are related to the upgrades exceeds 100 percent of the cost of the upgrades. (17) A grantee shall prioritize the provision of financial assistance to: (a) Environmental justice communities as defined in ORS 469A.400. The following outlines how an individual qualifies as a member of an environmental justice community, unless an eligible entity proposes an alternative method for a region or tribe that the Department accepts. If the Department does not accept the proposed alternative method, it shall default to the method outlined below: (A) Community of color: an individual who self identifies as an ethnicity and/or racial heritage other than white alone. (B) Community experiencing lower incomes: an individual whose household income is equal to or below the highest of the following: (i) 200 percent of the federal poverty level. (ii) 60 percent of the state median income. (C) Tribal communities: an individual who is a member of a federally recognized Indian tribe in Oregon. (D) Rural communities: an individual whose primary residence is in a community with a population of less than 50,000 people. (E) Coastal communities: an individual whose primary residence is located within the area between the Oregon coast to the crest of the coast range. (F) Communities with limited infrastructure: an individual whose primary residence is in a place with limited access to public works and services such as roads, transportation, power, water, or schools. (G) Seniors: an individual who is aged 60 years or older. (H) Youth: an individual whose age is equal to or between 15 and 24 years. (I) Persons with disabilities: an individual who has a physical or mental impairment that substantially limits one or more major life activities. (b) Individuals who rely on bulk fuels or electric resistance heating. (c) Individuals who reside in a home or structure that does not have a functioning heating or cooling system. (18) An eligible entity shall use an attestation by the individual to determine which, if any, prioritized categories the individual qualifies for, unless the entity is proposing to prioritize through outreach or marketing, in which case the entity may attest whether an individual or community qualifies. (19) An eligible entity shall propose the methods of prioritization in their application. Methods of prioritization may include, but are not limited to: (a) A waiting list; (b) Expedited processing times; (c) Outreach or marketing. (20) If awarded a grant, an electric utility may only provide financial assistance using grant funds to individuals who reside within the utility’s service area and are within the region for which they have been awarded a grant. The utility shall partner with one or more eligible entities to provide financial assistance to individuals who reside outside the utility’s service area and within the region they have been awarded a grant for. Statutory/Other Authority: Oregon Laws 2022, Chapter 86 (Senate Bill 1536) Statutes/Other Implemented: Oregon Laws 2022, Chapter 86 (Senate Bill 1536) History: DOE 1-2023, adopt filed 02/13/2023, effective 02/13/2023