---
kind: "section"
citation: "42 U.S.C. § 18792"
title: "42"
title_heading: "The Public Health and Welfare"
number: "18792"
heading: "Energy efficiency revolving loan fund capitalization grant program"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/18792"
units:
  - "Chapter 162 — Energy Infrastructure"
  - "Subchapter V — Energy Efficiency and Building Infrastructure"
  - "Part A — Residential and Commercial Energy Efficiency"
---

# §18792. Energy efficiency revolving loan fund capitalization grant program

- (a) **In general—** Not later than 1 year after November 15, 2021, under the [State Energy Program](/usc/42/18791.md?p=4), the [Secretary](/usc/42/18701.md?p=3) shall establish a [program](/usc/42/18791.md?p=2) under which the [Secretary](/usc/42/18701.md?p=3) shall provide capitalization grants to [States](/usc/42/18791.md?p=3) to establish a revolving loan fund under which the [State](/usc/42/18791.md?p=3) shall provide loans and grants, as applicable, in accordance with this section.
- (b) **Distribution of funds—**
  - (1) **All States—**
    - (A) **In general—** Of the amounts made available under [subsection (j)](#j), the [Secretary](/usc/42/18701.md?p=3) shall use 40 percent to provide capitalization grants to [States](/usc/42/18791.md?p=3) that are eligible for funding under the [State Energy Program](/usc/42/18791.md?p=4), in accordance with the [allocation](/usc/42/2021b.md?p=2) formula established under section 420.11 of title 10, Code of Federal Regulations (or successor regulations).
    - (B) **Remaining funding—** After applying the [allocation](/usc/42/2021b.md?p=2) formula described in [subparagraph (A)](#b-1-A), the [Secretary](/usc/42/18701.md?p=3) shall redistribute any unclaimed funds to the remaining [States](/usc/42/18791.md?p=3) seeking capitalization grants under that subparagraph.
  - (2) **Priority States—**
    - (A) **In general—** Of the amounts made available under [subsection (j)](#j), the [Secretary](/usc/42/18701.md?p=3) shall use 60 percent to provide supplemental capitalization grants to [priority States](/usc/42/18791.md?p=1) in accordance with an [allocation](/usc/42/2021b.md?p=2) formula determined by the [Secretary](/usc/42/18701.md?p=3).
    - (B) **Remaining funding—** After applying the [allocation](/usc/42/2021b.md?p=2) formula described in [subparagraph (A)](#b-2-A), the [Secretary](/usc/42/18701.md?p=3) shall redistribute any unclaimed funds to the remaining [priority States](/usc/42/18791.md?p=1) seeking supplemental capitalization grants under that subparagraph.
    - (C) **Grant amount—**
      - (i) **Maximum amount—** The amount of a supplemental capitalization grant provided to a [State](/usc/42/18791.md?p=3) under this paragraph shall not exceed $15,000,000.
      - (ii) **Supplement not supplant—** A supplemental capitalization grant received by a [State](/usc/42/18791.md?p=3) under this paragraph shall supplement, not supplant, a capitalization grant received by that [State](/usc/42/18791.md?p=3) under [paragraph (1)](#b-1).
- (c) **Applications for capitalization grants—** A [State](/usc/42/18791.md?p=3) seeking a capitalization grant under the [program](/usc/42/18791.md?p=2) shall submit to the [Secretary](/usc/42/18701.md?p=3) an application at such time, in such manner, and containing such information as the [Secretary](/usc/42/18701.md?p=3) may require, including—
  - (1) a detailed explanation of how the grant will be used, including a plan to establish a new revolving loan fund or use an existing revolving loan fund;
  - (2) the need of eligible recipients for loans and grants in the [State](/usc/42/18791.md?p=3) for assistance with conducting energy audits;
  - (3) a description of the expected benefits that building infrastructure and energy system upgrades and retrofits will have on communities in the [State](/usc/42/18791.md?p=3); and
  - (4) in the case of a [priority State](/usc/42/18791.md?p=1) seeking a supplemental capitalization grant under [subsection (b)(2)](#b-2), a justification for needing the supplemental funding.
- (d) **Timing—**
  - (1) **In general—** The [Secretary](/usc/42/18701.md?p=3) shall establish a timeline with dates by, or periods by the end of, which a [State](/usc/42/18791.md?p=3) shall—
    - (A) on receipt of a capitalization grant under the [program](/usc/42/18791.md?p=2), deposit the grant funds into a revolving loan fund; and
    - (B) begin using the capitalization grant as described in [subsection (e)(1)](#e-1).
  - (2) **Use of grant—** Under the timeline established under [paragraph (1)](#d-1), a [State](/usc/42/18791.md?p=3) shall be required to begin using a capitalization grant not more than 180 days after the date on which the grant is received.
- (e) **Use of grant funds—**
  - (1) **In general—** A [State](/usc/42/18791.md?p=3) that receives a capitalization grant under the [program](/usc/42/18791.md?p=2)—
    - (A) shall provide loans in accordance with [paragraph (2)](#e-2); and
    - (B) may provide grants in accordance with [paragraph (3)](#e-3).
  - (2) **Loans—**
    - (A) **Commercial energy audit—**
      - (i) **In general—** A [State](/usc/42/18791.md?p=3) that receives a capitalization grant under the [program](/usc/42/18791.md?p=2) may provide a loan to an eligible recipient described in [clause (iv)](#e-2-A-iv) to conduct a commercial energy audit.
      - (ii) **Audit requirements—** A commercial energy audit conducted using a loan provided under [clause (i)](#e-2-A-i) shall—
        - (I) determine the overall consumption of energy of the facility of the eligible recipient;
        - (II) identify and recommend lifecycle cost-effective opportunities to reduce the energy consumption of the facility of the eligible recipient, including through energy efficient—
          - (aa) lighting;
          - (bb) heating, ventilation, and air conditioning systems;
          - (cc) windows;
          - (dd) appliances; and
          - (ee) insulation and building envelopes;
        - (III) estimate the energy and cost savings potential of the opportunities identified in [subclause (II)](#e-2-A-ii-II) using software approved by the [Secretary](/usc/42/18701.md?p=3);
        - (IV) identify—
          - (aa) the period and level of peak energy demand for each building within the facility of the eligible recipient; and
          - (bb) the sources of energy consumption that are contributing the most to that period of peak energy demand;
        - (V) recommend controls and management systems to reduce or redistribute peak energy consumption; and
        - (VI) estimate the total energy and cost savings potential for the facility of the eligible recipient if all recommended upgrades and retrofits are implemented, using software approved by the [Secretary](/usc/42/18701.md?p=3).
      - (iii) **Additional audit inclusions—** A commercial energy audit conducted using a loan provided under [clause (i)](#e-2-A-i) may recommend strategies to increase energy efficiency of the facility of the eligible recipient through use of electric systems or other high-efficiency systems utilizing fuels, including natural gas and hydrogen.
      - (iv) **Eligible recipients—** An eligible recipient under [clause (i)](#e-2-A-i) is a business that—
        - (I) conducts the majority of its business in the [State](/usc/42/18791.md?p=3) that provides the loan under that clause; and
        - (II) owns or operates—
          - (aa) 1 or more commercial buildings; or
          - (bb) commercial space within a building that serves multiple functions, such as a building for commercial and residential operations.
    - (B) **Residential energy audits—**
      - (i) **In general—** A [State](/usc/42/18791.md?p=3) that receives a capitalization grant under the [program](/usc/42/18791.md?p=2) may provide a loan to an eligible recipient described in [clause (iv)](#e-2-B-iv) to conduct a residential energy audit.
      - (ii) **Residential energy audit requirements—** A residential energy audit conducted using a loan under [clause (i)](#e-2-B-i) shall—
        - (I) utilize the same evaluation criteria as the Home Performance Assessment used in the Energy Star [program](/usc/42/18791.md?p=2) established under [section 6294a of this title](/usc/42/6294a.md);
        - (II) recommend lifecycle cost-effective opportunities to reduce energy consumption within the residential building of the eligible recipient, including through energy efficient—
          - (aa) lighting;
          - (bb) heating, ventilation, and air conditioning systems;
          - (cc) windows;
          - (dd) appliances; and
          - (ee) insulation and building envelopes;
        - (III) recommend controls and management systems to reduce or redistribute peak energy consumption;
        - (IV) compare the energy consumption of the residential building of the eligible recipient to comparable residential buildings in the same geographic area; and
        - (V) provide a Home Energy Score, or equivalent score (as determined by the [Secretary](/usc/42/18701.md?p=3)), for the residential building of the eligible recipient by using the Home Energy Score Tool of the [Department](/usc/42/18701.md?p=1) or an equivalent scoring tool.
      - (iii) **Additional audit inclusions—** A residential energy audit conducted using a loan provided under [clause (i)](#e-2-B-i) may recommend strategies to increase energy efficiency of the facility of the eligible recipient through use of electric systems or other high-efficiency systems utilizing fuels, including natural gas and hydrogen.
      - (iv) **Eligible recipients—** An eligible recipient under [clause (i)](#e-2-B-i) is—
        - (I) an individual who owns—
          - (aa) a single family home;
          - (bb) a condominium or duplex; or
          - (cc) a manufactured housing unit; or
        - (II) a business that owns or operates a multifamily housing facility.
    - (C) **Commercial and residential energy upgrades and retrofits—**
      - (i) **In general—** A [State](/usc/42/18791.md?p=3) that receives a capitalization grant under the [program](/usc/42/18791.md?p=2) may provide a loan to an eligible recipient described in [clause (ii)](#e-2-C-ii) to carry out upgrades or retrofits of building infrastructure and systems that—
        - (I) are recommended in the commercial energy audit or residential energy audit, as applicable, completed for the building or facility of the eligible recipient;
        - (II) satisfy at least 1 of the criteria in the Home Performance Assessment used in the Energy Star [program](/usc/42/18791.md?p=2) established under [section 6294a of this title](/usc/42/6294a.md);
        - (III) improve, with respect to the building or facility of the eligible recipient—
          - (aa) the physical comfort of the building or facility occupants;
          - (bb) the energy efficiency of the building or facility; or
          - (cc) the quality of the air in the building or facility; and
        - (IV)
          - (aa) are lifecycle cost-effective; and
          - (bb)
            - (AA) reduce the energy intensity of the building or facility of the eligible recipient; or
            - (BB) improve the control and management of energy usage of the building or facility to reduce demand during peak times.
      - (ii) **Eligible recipients—** An eligible recipient under [clause (i)](#e-2-C-i) is an eligible recipient described in subparagraph [(A)(iv)](#e-2-A-iv) or [(B)(iv)](#e-2-B-iv) that—
        - (I) has completed a commercial energy audit described in [subparagraph (A)](#e-2-A) or a residential energy audit described in [subparagraph (B)](#e-2-B) using a loan provided under the applicable subparagraph; or
        - (II) has completed a commercial energy audit or residential energy audit that—
          - (aa) was not funded by a loan under this paragraph; and
          - (bb)
            - (AA) meets the requirements for the applicable audit under subparagraph [(A)](#e-2-A) or [(B)](#e-2-B), as applicable; or
            - (BB) the [Secretary](/usc/42/18701.md?p=3) determines is otherwise satisfactory.
      - (iii) **Loan term—**
        - (I) **In general—** A loan provided under this subparagraph shall be required to be fully amortized by the earlier of—
          - (aa) subject to [subclause (II)](#e-2-C-iii-II), the year in which the upgrades or retrofits carried out using the loan exceed their expected useful life; and
          - (bb) 15 years after those upgrades or retrofits are installed.
        - (II) **Calculation—** For purposes of [subclause (I)(aa)](#e-2-C-iii-I-aa), in the case of a loan being used to fund multiple upgrades or retrofits, the longest-lived upgrade or retrofit shall be used to calculate the year in which the upgrades or retrofits carried out using the loan exceed their expected useful life.
    - (D) **Referral to qualified contractors—** Following the completion of an audit under subparagraph [(A)](#e-2-A) or [(B)](#e-2-B) by an eligible recipient of a loan under the applicable subparagraph, the [State](/usc/42/18791.md?p=3) may refer the eligible recipient to a qualified contractor, as determined by the [State](/usc/42/18791.md?p=3), to estimate—
      - (i) the upfront capital cost of each recommended upgrade; and
      - (ii) the total upfront capital cost of implementing all recommended upgrades.
    - (E) **Loan recipients—** Each [State](/usc/42/18791.md?p=3) providing loans under this paragraph shall, to the maximum extent practicable, provide loans to eligible recipients that do not have access to private capital.
  - (3) **Grants and technical assistance—**
    - (A) **In general—** A [State](/usc/42/18791.md?p=3) that receives a capitalization grant under the [program](/usc/42/18791.md?p=2) may use not more than 25 percent of the grant funds to provide grants or technical assistance to eligible entities described in [subparagraph (B)](#e-3-B) to carry out the activities described in subparagraphs [(A)](#e-2-A), [(B)](#e-2-B), and [(C)](#e-2-C) of paragraph (2).
    - (B) **Eligible entity—** An entity eligible for a grant or technical assistance under [subparagraph (A)](#e-3-A) is—
      - (i) a business that—
        - (I) is an eligible recipient described in [paragraph (2)(A)(iv)](#e-2-A-iv); and
        - (II) has fewer than 500 employees; or
      - (ii) a low-income individual (as defined in [section 3102 of title 29](/usc/29/3102.md)) that owns a residential building.
  - (4) **Final assessment—** A [State](/usc/42/18791.md?p=3) that provides a capitalization grant under [paragraph (2)(C)](#e-2-C) to an eligible recipient described in [clause (ii)](#e-2-C-ii) of that paragraph may, not later than 1 year after the date on which the upgrades or retrofits funded by the grant under that paragraph are completed, provide to the eligible recipient a loan or, in accordance with [paragraph (3)](#e-3), a grant to conduct a final energy audit that assesses the total energy savings from the upgrades or retrofits.
  - (5) **Administrative expenses—** A [State](/usc/42/18791.md?p=3) that receives a capitalization grant under the [program](/usc/42/18791.md?p=2) may use not more than 10 percent of the grant funds for administrative expenses.
- (f) **Coordination with existing programs—** A [State](/usc/42/18791.md?p=3) receiving a capitalization grant under the [program](/usc/42/18791.md?p=2) is encouraged to utilize and build on existing [programs](/usc/42/18791.md?p=2) and infrastructure within the [State](/usc/42/18791.md?p=3) that may aid the [State](/usc/42/18791.md?p=3) in carrying out a revolving loan fund [program](/usc/42/18791.md?p=2).
- (g) **Leveraging private capital—** A [State](/usc/42/18791.md?p=3) receiving a capitalization grant under the [program](/usc/42/18791.md?p=2) shall, to the maximum extent practicable, use the grant to leverage private capital.
- (h) **Outreach—** The [Secretary](/usc/42/18701.md?p=3) shall engage in outreach to inform [States](/usc/42/18791.md?p=3) of the availability of capitalization grants under the [program](/usc/42/18791.md?p=2).
- (i) **Report—** Each [State](/usc/42/18791.md?p=3) that receives a capitalization grant under the [program](/usc/42/18791.md?p=2) shall, not later than 2 years after a grant is received, submit to the [Secretary](/usc/42/18701.md?p=3) a report that describes—
  - (1) the number of recipients to which the [State](/usc/42/18791.md?p=3) has distributed—
    - (A) loans for—
      - (i) commercial energy audits under [subsection (e)(2)(A)](#e-2-A);
      - (ii) residential energy audits under [subsection (e)(2)(B)](#e-2-B);
      - (iii) energy upgrades and retrofits under [subsection (e)(2)(C)](#e-2-C); and
    - (B) grants under [subsection (e)(3)](#e-3); and
  - (2) the average capital cost of upgrades and retrofits across all commercial energy audits and residential energy audits that were conducted in the [State](/usc/42/18791.md?p=3) using loans provided by the [State](/usc/42/18791.md?p=3) under [subsection (e)](#e).
- (j) **Authorization of appropriations—** There is authorized to be appropriated to the [Secretary](/usc/42/18701.md?p=3) to carry out this section $250,000,000 for fiscal year 2022, to remain available until expended.

## Source credit

(Pub. L. 117–58, div. D, title V, § 40502, Nov. 15, 2021, 135 Stat. 1051.)

## Notes

### Statutory Notes and Related Subsidiaries

### Wage Rate Requirements

For provisions relating to rates of wages to be paid to laborers and mechanics on projects for construction, alteration, or repair work funded under div. D or an amendment by div. D of Pub. L. 117–58, including authority of Secretary of Labor, see section 18851 of this title.