Federal Law Requirements for Residential Clean Energy Programs
Clean energy programs using funds from the Energy Efficiency and Conservation Block Grant (EECBG) Program or State Energy Program (SEP) require compliance with the following federal laws.
National Environmental Policy Act
The EECBG and SEP require compliance with the National Environmental Policy Act (NEPA). Any energy efficiency/renewable energy program using these funds must submit an Environmental Questionnaire to DOE. See a Sample NEPA Environmental Questionnaire
However, if energy efficiency programs are designed to produce improvements on existing buildings (without new construction) and to reduce energy consumption, they should be eligible for a categorical exclusion to NEPA under Subpart D, Appendix A or B. This exclusion is based on the fact that energy efficiency projects are not classified as construction activities and, typically, do not produce any new impact on the site location. See a sample EECBG NEPA Review Document, certifying a categorical exclusion.
National Historic Preservation Act
Projects, including those related to rehabilitation, energy efficiency retrofits, renewables, and weatherization under various federal funding programs [among others American Recovery and Reinvestment Act (ARRA), EECBG, SEP, and the Weatherization Assistance Program], are subject to review under Section 106 of the National Historic Preservation Act (NHPA), 16 U.S.C. 470f and its implementing regulations at 36 CFR part 800.
However, most of the energy efficiency projects and programs highlighted in this Finance Guide will receive categorical exemptions. In accordance with 36 CFR 800.3(a)(1), as long as the individual energy efficiency undertakings on the exterior of the building—including caulking, weather stripping, thermal insulation, door and window replacement, exterior resurfacing, and the various repairs necessary to make the energy efficiency/renewable energy improvements—do not change the appearance of the exterior of the building, they are determined to have no potential to cause effects on historic properties even when historic properties are present. As such these projects will receive a categorical exclusion from NHPA and need not submit applications. The same is true of interior work not visible from a public right of way. However, to establish a chain of responsibility for the projects, states must enter into a Programmatic Agreement with U.S. Department of Energy (DOE).
See a sample NHPA Programmatic Agreement, certifying a categorical exclusion for such projects under ARRA, EECBG, SEP, and the Weatherization Assistance Program.
Davis-Bacon and Buy American
Contractors and subcontractors directly receiving ARRA funding for projects through SEP must adhere to the wage rules under the Davis-Bacon Act.
However, the Department of Labor has determined that Davis-Bacon Act requirements do not apply to individual homeowners who participate in or benefit from ARRA-funded SEP and EECBG energy improvement financing programs that consist of providing loans to individual homeowners for energy efficiency/renewable energy projects for their homes. This guidance provides a categorical exclusion for all residential loan loss reserve programs.
Similarly, the Buy American requirements apply to “public buildings” and “public works” and thus would not be applicable to projects performed on individual homes. For guidance on the Davis-Bacon Act and Buy American requirements, see EECBG Frequently Asked Questions on the DOE Weatherization & Intergovernmental Program website.