Look at these microgrid funding options — and think big

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A number of federal, state and military programs may provide microgrid funding options, said participants in a recently released video of a Microgrid 2022 panel, “Making Microgrids a Building Block of U.S. Infrastructure and Climate Goals.” But be aware: such funding programs — including climate action plans — don’t necessarily use the word “microgrid” but they apply to the technology.

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Elizabeth Bellis Wolfe, senior consultant, loan programs office for the U.S. Department of Energy (DOE), encouraged those interested in microgrids to consult the loan programs office — a $40 billion lending authority – for help finding funding. The office provides funding for alternative transportation vehicle manufacturing and innovative technology development, for example, both of which could include microgrid funding.

“We are part of this bridge to bankability. The DOE for a long time has focused on how to innovate and pilot and demonstrate these technologies,” she said. In the past, there was a missing step between initial demonstration and true commercialization. The office is trying to fill that gap with funding.

All DOE projects are required to reduce greenhouse gas emissions. “We don’t necessarily have the word ‘climate’ but are serving those goals,” she said, adding that the Biden administration has established ambitious goals for reducing emissions by 2035, and those goals can’t be met without significant deployment of distributed energy resources (DER), including microgrids.

“As communities expand their reliance on renewables, [DERs and microgrids] can help balance the grid and make the demand more flexible. All of that is in the service of meeting our climate goals,” said Wolfe.

In addition, under the DOE’s tribal program, a proposed asset that would be owned 50% by a tribe can receive direct lending or loan guarantees from the loans program office. The office offers a base rate of capital that no private entity can offer, she added. And the loans can be as long as 30 years.

Defense Dept. makes microgrids a priority

Matt Borron, executive director, Association of Defense Communities, which represents the cities, towns and community members with interests in the economic health of communities near military bases, said a number of military programs could provide funding for resilience. The Department of Defense has made microgrids a priority.

For the last 10 years, the Department of Defense has pursued resilience technology and infrastructure, he said.

“Both Congress and the Department of Defense have seen the value of pursuing these types of things. They understand that (resilience) is a growing concern and that will continue, you’ll see that dollar amounts are increasing,” he said.

For example, the U.S. Army and Navy have said they want to build 130 microgrids by 2035 as part of their climate action plans, Borron said.

Both red and blue states support efforts to ensure military bases are resilient. “We need to secure the bases, and states will help keep them open,” he said.

States are also finding creative ways to pay for microgrids that support military bases.

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For example, a base in New London, Connecticut a few years ago was worried about losing power. The state of Connecticut issued a $1 million bond and built the Navy a microgrid.

And Texas created a $30 million fund for defense infrastructure, including a microgrid project, Borron said.

“Massachusetts, Maryland and a lot of states are trying to make these investments from an economic development point of view. They understand the Department of Defense is looking at these things,” he said.

Click below to watch the video.

Making Microgrids a Building Block of US Infrastructure and Climate Goals

Federal money flowing from states

The Infrastructure and Investment Jobs Act  also includes potential funding for microgrids, said the panel participants.

To access that funding, it’s important to look at the infrastructure money going to the states, said Amanda Corrado, government relations advisor, Schneider Electric.

“It’s about engaging a lot on the state level with energy offices, governors and legislators and trying to understand how we can continue to help the implementation of these programs at the state level,” she said. In these efforts, it’s important to ensure disadvantaged communities are being served, she added.

Right now, the biggest demand for microgrids is coming from states that have experienced disasters — California, New York, New Jersey, Maryland and Massachusetts, for example, said Corrado. In addition, Schneider Electric is seeing increased interest in states that have had fewer disasters but have high levels of renewables. In windy Iowa, for instance, Schneider is working closely with legislators on how to utilize DERs and microgrids.

Big thinking wins the day

During the panel discussion, Wolfe from the DOE encouraged audience members to think big while they’re planning microgrid and DER projects and seeking money from the DOE. In addition, she said to be sure to identify how the projects will cut greenhouse gas emissions.

“Think big not just in terms of the scale of projects, but in terms of benefits. For innovative clean energy, identify your technology and explain how it’s innovative and what the benefits are to the community and the communities indirectly affected by your projects,” Wolfe said.

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