This memo reviews and evaluates existing funding mechanisms that support off-farm irrigation modernization and conduit hydropower projects. Irrigation modernization projects, both on and off-farm, can be challenging to move through planning, permitting, development and installation processes and some evidence indicates that funding mechanisms can be a barrier to successful deployments. This memo is important because access to equitably and efficiently deployed project planning and development funding may be a key pre-requisite to increasing the pace and scale of irrigation modernization project deployments that incorporate hydropower.
We evaluated an array of federal and state funding programs and took a close look at Energy Trust of Oregon’s funding mechanisms due to the organization’s apparent success in increasing the pace and scale of modernization in its state. We found that the federal and state funding mechanisms which support either irrigation modernization or conduit hydropower share many of the same characteristics:
1. Most funding mechanisms are competitive and are only open to applications once per year.
2. Many do not support project development activities. Those that do tend to focus on the later development steps of specific projects rather than early-stage development or comprehensive planning to identify and prioritize many projects.
3. With some exceptions, most funding mechanisms require matching funds.
In addition, while some federal and state programs have maintained relatively stable funding and processes, others have come and gone over time. By comparison, Energy Trust’s programs, which have been stable for at least a decade, incorporate the following characteristics:
1. Non-competitive funding,
2. Rolling application periods,
3. Flexible funding for early-stage development and comprehensive modernization planning, and
4. Some programs do not have a matching funds requirement.
Energy Trust’s funding programs also include the following attributes which may differ from other funders:
• Direct communication between project proponents and program staff.
• Employment of program staff who understand development processes specific to hydropower and irrigation modernization.
• Structures that allow the program to move quickly in supporting project proponents both informally and through application review, approval or rejection, contracting, and payment processes, including:
o Using an application-form-contract that enables work orders through additional, easily approved forms.
o Ensuring funding approval authorities are in place with staff at appropriate levels to keep application approvals moving quickly.
o Integrating with existing organization payment processing functions to speed up the process of getting funding to project proponents.
• Learning from the challenges that projects experience to consider other programmatic actions to address market barriers.