Definition: Discretionary grants are competitive. Eligible parties must apply for funding, which is neither guaranteed nor automatically allocated. Applications that meet baseline criteria are evaluated and ranked based on agency priorities. Processes and evaluation criteria may change by program and funding cycle.

Definition: Formula grants are awarded based on statutory criteria such as population, socioeconomic status, or demographic characteristics. These are generally noncompetitive if eligibility requirements are met. Block grants operate similarly but typically provide broader flexibility in how funds are used.

Example: Weatherization Assistance Program

Definition: Community Project Funding (CPF), previously referred to as earmarks, is congressionally directed spending for specific projects including “outside-the-box” clean energy projects. CPF may support a range of locally identified priorities, subject to annual congressional rules and appropriations. Eligibility, caps, and priorities can vary by fiscal year and chamber. Note that Community Project Funding is the name in the House of Representatives; in the U.S. Senate, the funding is simply known as Congressionally Directed Spending. See Community Project Funding for Local Sustainability for more details.

Definition: Federal disaster aid becomes available following a presidentially or federally declared disaster. Agencies may vary in their definitions of disaster-affected communities, so consult FEMA’s declared disaster listings and specific program guidance to confirm eligibility.

Example: Assistance for Governments and Private Non-Profits After a Disaster

Definition: Cooperative agreements are discretionary instruments used when substantial federal involvement is anticipated during project implementation. Terms and oversight requirements may vary by program.

Example: Training and Technical Assistance (TA) Program for Rural, Small, and Tribal Wastewater Systems

Definition: Technical assistance provides non-monetary support such as staff expertise, planning support, or capacity building. Technical assistance can be leveraged to accelerate or enhance the design of projects or support effective community engagement and planning to increase readiness for future funding. Technical assistance may also be available through state agencies, utilities, or regional organizations, or green banks.

Example: Direct Technical Assistance

Definition: Installment loans provide capital that must be repaid over a defined term. Repayment schedules and interest terms vary by program and lender. They will often include amortization schedules, in which debts are gradually reduced by regular payments throughout the term.

Example: Energy Infrastructure Reinvestment Program

Definition: Revolving loan funds (RLFs) provide a recurring source of capital. As loans are repaid, funds revolve to support additional projects. Terms vary by program and capitalization source.

Example: Brownfields Revolving Loan Fund Grants

Definition: Direct pay (also known as elective pay) allows eligible tax-exempt entities to receive the value of certain federal tax credits as refunds, subject to program requirements. This may be particularly useful in funding city procurement of on-site and off-site renewable energy and energy storage. See our guidance on leveraging direct pay here. Similar financing tools and incentive structures may also exist at the state or utility level, including utility rebate programs, green bank financing, or state tax credits.