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EPA announces grant competition to fund residential solar

House Republicans seek large rescissions from the fund

Rep. Gary Palmer, R-Ala., introduced legislation to rescind money in the Greenhouse Gas Reduction Fund, calling it a slush fund.
Rep. Gary Palmer, R-Ala., introduced legislation to rescind money in the Greenhouse Gas Reduction Fund, calling it a slush fund. (Bill Clark/CQ Roll Call file photo)

The EPA on Wednesday said it would use a competitive grant process in order to distribute $7 billion for residential solar projects under a fund that congressional Republicans are seeking to eliminate.

The agency published a notice of funding opportunity for the grant competition, and said it intends to distribute up to 60 awards to states, territories, tribes, municipalities and nonprofits. These funds would be used to establish and expand low-income solar programs that provide financing and technical assistance. Applicants can seek the grants in three categories: $25 million to $100 million, $100 million to $250 million, and $250 million to $400 million.

The money is part of $27 billion Congress provided to establish the Greenhouse Gas Reduction Fund in last year’s climate, tax and health care reconciliation law. The program was modeled on so-called green banks that states have used to finance projects historically unable to obtain capital from traditional sources.

“We know that residential solar cuts home energy bills and provides families with resilient and secure power,” said Jahi Wise, acting director of the Greenhouse Gas Reduction Fund Program. “But many have not been able to access these benefits, including low income and disadvantaged communities, communities who pay the largest share of their income in energy bills.”

Republicans largely opposed the creation of the fund, and included a provision to rescind unobligated funds in the energy package the House passed in March. Rep. Gary Palmer, R-Ala., who introduced the bill that was incorporated into the package, referred to it as a “slush fund.”

The House State-Foreign Operations Appropriations Subcommittee approved a draft fiscal 2024 spending bill on June 23 that would rescind $11.1 billion of the unobligated money in the fund.

Some Republicans, including Senate Energy and Natural Resources ranking member John Barrasso, R-Wyo., said the creation of the fund increases the chances of another Solyndra Inc., a solar company that defaulted on a $535 million loan guaranteed by the Energy Department during the Obama administration.

The Greenhouse Gas Reduction Fund may not remain unobligated for much longer. The EPA proposed an implementation framework in May that outlined plans to establish two other programs that would account for the remaining $20 billion in the fund.

The EPA said the residential funding can also be used for energy storage projects intended to support residential solar.

The program will require recipients of the grants to guarantee a minimum 20 percent savings on electricity bills for participating households. The EPA will accept applications through Sept. 26

EPA Administrator Michael S. Regan is scheduled to announce the program in Waterbury, Vt. alongside the state’s congressional delegation.

Sen. Bernie Sanders, I-Vt., expressed concern last year that the EPA was departing from congressional intent for the $7 billion to support residential solar, and withheld support for the nomination of Joseph Goffman to lead the agency’s air office. After the agency reassured him that the $7 billion would be allocated for residential solar projects, Sanders withdrew his opposition.

The Senate Environment and Public Works Committee has recommended Goffman for confirmation, but he hasn’t received a floor vote.

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