Federal Grant-making Program to Support Energy Efficiency Upgrades by Nonprofits

A pilot grant-making program providing federal grants to support nonprofits in making energy efficiency upgrades to their facilities was included in the Infrastructure Investment and Jobs Act that President Biden signed into law on November 15, 2021 (the Act). The Act authorizes appropriation to the program of $50,000,000 over a five-year period starting in 2022, with individual grants capped at $200,000.

The grants are intended to fund “energy-efficiency materials” to be used in buildings owned and operated by 501(c)(3) organizations. “Energy-efficiency materials” is defined as any material (including products, equipment, or systems) the installation of which results in a reduction in use of energy or fuel. The Act specifically includes as potential energy efficiency materials roofs, lighting systems or components, windows, doors, and heating, ventilation or air conditioning systems or components.

While the details of the program, including the application process, are to be established by the U.S. Department of Energy within the next year, the Act outlines the following performance-based criteria to be used in grant award determinations: (i) the energy savings achieved; (ii) the cost effectiveness of the use of energy-efficiency materials; (iii) an effective plan for evaluation, measurement, and verification of energy savings; and (iv) the financial need of the applicant.

We will be continuing to monitor this program as it develops. If your organization is considering a project that may qualify for this program or you would like to weigh in on the development of this program, we encourage you to reach out to your primary Faegre Drinker contact. We can help you to stay up-to-date on developments and opportunities to engage.