This subpart sets forth the eligibility criteria for schools and hospitals to receive grants for energy conservation measures, including renewable resource measures, and the elements of an energy conservation measure program.

(a) To be eligible to receive financial assistance for an energy conservation measure, including renewable resource measures, an applicant must:

(1) Be a school, hospital, or coordinating agency representing them as defined in § 455.2;

(2) Be located in a State which has an approved State Plan as described in subpart B of this part;

(3) Have completed a technical assistance program consistent with § 455.62, as determined by the State in accordance with the State Plan, for the building for which financial assistance is to be requested subsequent to the most recent construction, reconfiguration, or utilization change to the building which significantly modified energy use within the building;

(4) Have completed an updated technical assistance program if required in the State Plan as specified in § 455.20(q);

(5) Have implemented all energy conservation maintenance and operating procedures which are identified as the result of a technical assistance program or have provided pursuant to the State plan a satisfactory written justification for not implementing any specific maintenance and operating procedures so identified;

(6) Have met any requirements set forth in the State Plan pursuant to § 455.20(m) regarding the avoidance of supplanting other funds in the financing of energy conservation measures under this part;

(7) Have no plan or intention at the time of application to close or otherwise dispose of the building for which financial assistance is to be requested within the simple payback period or useful life (depending on the State's requirement for determining cost effectiveness) of any energy conservation measure recommended for that building; and

(8) Submit an application in accordance with the provisions of this part and the approved State Plan;

(b) To be eligible for financial assistance:

(1) In States where simple payback has been selected as the cost-effectiveness test pursuant to § 455.20(u)(2), the simple payback period of each energy conservation measure for which financial assistance is requested shall not be less than 2 years nor greater than 10 years, and the estimated useful life of the measure shall be greater than its simple payback period; or

(2) In States where life-cycle costing has been selected as the cost-effectiveness test pursuant to § 455.20(u)(2), the savings-to-investment ratio of each energy conservation measure must be greater than or equal to one under § 455.63(b)(1), over a period for analysis which does not exceed 15 years, and the useful life of the energy conservation measure must be at least 2 years.

(c) Leased equipment is not eligible for financial assistance under this part. Equipment which becomes the property of the grantee at the conclusion of a long-term purchase agreement without any additional payment is eligible.

Financial assistance awarded under this subpart may be expended for the design (excluding design costs funded under the technical assistance program), acquisition, and installation of energy conservation measures to reduce energy consumption or measures to allow the use of renewable resources in schools and hospitals or to shift energy usage to periods of low demand and cost. Such measures include, but are not necessarily limited to, those included in the definition of “energy conservation measure” in § 455.2.