Hydroelectric Production Incentives - American Cities Climate Challenge
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Hydroelectric Production Incentives

Federal Agency


Office of Energy Efficiency & Renewable Energy (EERE)


To provide funding for projects adding hydroelectric power generating capabilities to existing dams and other water infrastructure.

Applicant and/or Project Eligibility Requirements

Any owner or authorized operator of a hydroelectric generation facility may apply for incentive payments for net electric energy generated by and sold from its operation during the eligibility window, which began on October 1, 2005, and concludes on September 30, 2027.

Decarbonization Considerations

Consider maximizing the utilization of existing structures to minimize the impact on the environment. Hydropower can provide a major source of reliable power to the grid as more variable renewable resources come online.

Equity Considerations

Hydroelectric facilities should be supported with regard to up- and downstream communities, as well as natural ecosystems and neighborhoods that might be (dis)affected by generation activities. Planning and engagement should be conducted to clearly communicate and/or mitigate potential negative impacts that would disproportionally affect underserved communities.

Helpful Tips

More information can be found here: https://www.energy.gov/sites/default/files/2021-12/section-242-guidance-for-fy21-solicitation.pdf

Other Notes

The incentive is $0.018/kWh in 2005 dollars. The IIJA authorizes the appropriation of $125 million for the program.

Deadline (Announced or Anticipated)

February 10, 2022

Funding Available


Max Award Amount


Expected Allocations


Average Award (Estimated)


Matching Funds

Not required

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