DOE Issues Interim Final Rule and Program Guidance on Title 17 Clean Energy Loan Guarantee Program

On May 19, 2023, DOE issued program guidance and an interim final rule (IFR) on the Title 17 Clean Energy Loan Guarantee Program, implementing IRA section 50141. The IRA expanded the program by providing over $43 billion in funding for new loans for renewable energy projects as well as other new facilities reducing GHG pollution. The IRA also created a new Energy Infrastructure Reinvestment Program under section 50144 for the repurposing of energy facilities that have ceased operations, such as power plants, to clean energy production. The IFR provides regulations to implement the programs as well as to facilitate efficiencies in loan processing and the handling of an increased volume of applications.

The guidance provides examples of projects that may be eligible for loan guarantees, including virtual power plants with distributed energy resources, direct air capture facilities, direct current transmission lines, iron ore pellet production for low-emissions steel production, solar cell and advanced grid component manufacturing, electrolyzer facility construction, community solar facilities, and the replacement of power plants with renewables and storage.

The program guidance includes a new requirement for applicants to submit a Community Benefits Plan as part of their application. The Community Benefits Plan must discuss how the applicant plans to engage with stakeholders affected by the proposed project, including community, labor, and union engagement; job quality and workforce continuity; diversity, equity, inclusion, and accessibility; and how the project will contribute to the Justice40 initiative goal that 40 percent of the overall benefits from federal investments flow to disadvantaged communities. DOE’s Loan Program Office will consider the quality of a Community Benefits Plan among the factors that indicate the prospect of loan repayment.

Although the IFR became effective on May 30, 2023, it included a request for comments through July 31, 2023, with a final rule expected thereafter.