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WPTO: New Round of Funding and Eligibility for Hydroelectric Production Incentive Program (2/10/22)

The Office of Energy Efficiency and Renewable Energy’s Water Power Technologies Office (WPTO) today announced it is now accepting applications for the latest round of funding under the Hydroelectric Production Incentive Program under Section 242 of the Energy Policy Act of 2005. A total of $7 million is available for qualified facilities based on the number of kilowatt-hours (kWh) generated in calendar year 2020 (CY20).


Hydropower has remained an important renewable energy resource in the United States for more than a century, yet most dams across the country do not produce power. Adding generation equipment to these sites could add up to 12 gigawatts of new hydropower capacity to the U.S. electric system and provide reliable, affordable power to communities across the nation. The program incentivizes developers to pursue this potential resource by providing funding for projects adding hydroelectric power generating capabilities to existing dams and other water infrastructure throughout the United States.


Due to recent amendments to Section 242 under the Energy Act of 2020, the U.S. Department of Energy (DOE) is expanding its eligibility criteria for this year’s round of funding. Additional hydroelectric facilities, such as those located in communities with inadequate electric service, may now be eligible to receive incentive payments. The maximum payment per facility has also been increased to $1 million per year (an increase from the $750,000 limit in the previous round). Additionally, the recent legislation amended the length of the eligibility window for Section 242 applicants. Electrical power produced from a hydroelectric generation facility placed in operation on or after October 1, 2005, and on or before September 30, 2027, is now eligible for consideration of incentive payments.


Applicants may receive up to 1.8 cents per kWh for hydropower generated during the CY20 incentive period, with a maximum of $1 million depending on the total kWh of eligible power generation. Applicants that received incentive payments for prior calendar years must submit a full application addressing all eligibility requirements for hydroelectricity generated and sold in CY20.


In the previous round for calendar year 2019, WPTO awarded a total of $7 million to 42 recipients that developed new projects on existing water infrastructure or upgraded existing hydropower projects. This is the eighth year that DOE has offered hydroelectric production incentive payments pursuant to Section 242.


The electric system is changing rapidly, and hydropower is well positioned to provide a key source of reliability and resiliency to the grid as more variable renewable resources come online. By making use of existing structures, hydropower owners and operators can introduce new electricity onto the grid with minimal impact on the surrounding environment.

Visit the WPTO website for more information and guidance on the newest round of funding available as part of Fiscal Year 2021 appropriations. Applications are due February 10, 2022.


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