Deployment of Distributed Energy Resources: Sources of Financial Assistance and Information Resources

February 1, 2002

Distributed Energy Resources (DER) are small, modular, decentralized energy systems located in or near the place where energy is used. These integrated systems can include effective means of energy storage and delivery as well as power-generating technologies. FEMP has identified financial assistance sources that may be available to Federal agencies for the implementation of DER projects.

There are three types of funding sources available for Federal DER projects: DOE support, State programs, and utility programs. Although Federal support for energy technologies is directed primarily at research and development, some financial support is becoming available for DER deployment. When States have funding programs, they are typically at a higher dollar level than the more limited Federal programs. Some State public service commissions mandate that investor-owned utilities sponsor incentives for DER, energy efficiency, and renewable energy. Other utilities voluntarily offer these incentives to their customers.

Update: DOE State Energy Program Grants

In 2002, for the seventh year, DOE is offering States the opportunity to apply to undertake a variety of Special Projects under the State Energy Program (SEP). DOE has reviewed its end-use sector energy efficiency and renewable energy programs in which state assistance is an implementation strategy. As a result of this review, DOE is inviting States to submit proposals to implement specific DOE Office of Energy Efficiency and Renewable Energy (EERE) deployment activities and initiatives as Special Projects under SEP. Approximately $18,500,000 will be available for these projects. Applications must be received at the State's DOE Regional Office no later than March 15, 2002.

Several of the Special Projects available as SEP grants have DER components:

  • Section 6.51 - Small fuel cells (1-5 kw) as uninterruptible power supplies (UPS)

  • Section 6.52 - Hydrogen power parks

  • Section 6.54 - Solar photovoltaics for protecting and safeguarding power delivery infrastructure

  • Section 6.55 - Solar schools

  • Section 6.57 - Million solar roofs initiative

  • Section 6.58 - Wind energy support

  • Section 6.59 - DER electrical interconnection demonstration projects

  • Section 6.60 - DER technology demonstrations

  • Section 6.63 - Energy storage for transmission congestions relief, price response, and system security

  • Section 6.64 - Biofuels for power generation

Additional SEP Special Project solicitations are included in the full document.

State energy offices must submit the applications and Federal agencies are encouraged to apply and partner with their State energy offices. Application details are available at

Information on DOE's Regional Offices is available at

Update: DOE FEMP FY 2002 DER Call for Projects

For the second year, FEMP is offering financial assistance to qualifying Federal DER projects (PDF 19�KB; 2�pages). FEMP encourages public-private partnerships and leveraging of funds with other agency resources. As in past years, there are likely to be more applications submitted than can receive funding. So start thinking now about potential DER projects at your Federal facility. Look on FEMP's DER Web site for the call letter and application, to be posted in March 2002 at

Update: Distributed Generation Grants Available in California

The California Energy Commission's Consumer Energy Center recently announced a Solar Energy and Distributed Generation Grant Program to help offset the cost of purchasing and installing new solar energy and distributed generation systems. Funds will be awarded on a first-come, first-served basis until the available funds are exhausted, so applications should be submitted as soon as possible. Application forms and instructions are available at

Update: Power Systems Technologies, Distributed Power Generation, and Combined Heat and Power Configurations Grants Available in New York

NYSERDA (New York State Energy Research and Development Authority) has issued a Program Opportunity Notice (PON) No. 669-01 to support new product development of distributed generation systems, components, and related power systems technologies; and demonstration of combined heat and power configurations in industrial, municipal, institutional, commercial, and residential sectors. $10,000,000 is available. Proposals are due on Tuesday, March 12, 2002. The entire solicitation, which includes program requirements, proposal format, and evaluation criteria, is available at the NYSERDA web site at