Applying the Buy American Act to Energy Procurement for On-Site Energy Generation Projects

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Disclaimer: The content on this page does not constitute professional financial guidance. Details/requirements may change based on additional guidance from the Federal Acquisition Regulatory Council. This page should not be used as the only source of information when making purchasing decisions, investment decisions, or when executing other binding agreements. Agencies should consult with their General Counsel prior to developing a project to confirm product eligibility and details. 

Buy American Act (BAA) federal procurement guidance applies to a wide range of federal contracting vehicles for energy generation projects at federal facilities. To comply with BAA regulations, federally funded and financed energy projects must prioritize American-made products. This is true even when projects are financed through third-party arrangements. 

Examples of energy procurement options subject to BAA requirements include:

  • Direct ownership (i.e., procured using appropriations)
  • Third-party ownership models (like power purchase agreements)
  • U.S. Department of Defense (DoD)—also known as the Department of War—energy projects under 10 U.S.C. § 2922a
  • Energy savings performance contracts (ESPCs)
  • Federal Acquisition Regulations (FAR) Part 41 utility energy service contracts.

Table 1 lists the various procurement options for on-site energy generation projects based on ownership and funding status.

Table 1. Procurement Options for Energy Generation Projects at Federal Sites 
On-Site Procurement OptionsBAA Applied Historically/Been Considered for Applicability?Comments
Government-Owned
Congressional AppropriationsYesSubject to FAR
Utility Energy Service Contract YesSubject to the FAR + DFARS* 225.7017 (DoD)
ESPCYesSubject to the FAR + DFARS 225.7017 (DoD)
Privately Owned
ESPC
Energy Sales Agreement
YesSubject to the FAR + DFARS 225.7017 (DoD)
10 U.S.C. 2922a (DoD)YesFAR 52.225-5, Trade Agreements
National Defense Authorization Act of 2011 + Final Rulings
FAR Part 41Yes – agency interpretationOne example where a multisite purchase was done with BAA applied. At the end of the performance period, agencies have the option to take ownership of the system.
Real property arrangement, e.g., enhanced use lease (EUL)UnlikelyThese products are leveraging federal real property; however, federal agencies are typically not the offtakers of the power.
Grant-Funded
Assisting Federal Facilities with Energy Conservation Technologies (AFFECT) GrantsYesThe U.S. Department of Energy (DOE) has determined that BAA applies to AFFECT grants that are for agency use.

* Defense Federal Acquisition Regulation Supplement (DFARS)

DOE AFFECT grants are subject to BAA rules because they fund federal procurement efforts that result in agency use. These fall under BAA, not Build America, Buy America. 

There is one notable exception: EULs, which involve real property agreements and are not covered by the BAA.

Solar Photovoltaics Projects and the Buy American Act

Solar photovoltaic (PV) systems are commonly installed to meet agencies’ requirements under 42 U.S.C. § 15852. Solar PV projects qualify as an energy conservation measure under common federal procurement options and would be covered under the BAA, except for projects involving EUL real estate arrangements.

A single PV project often includes all four categories of BAA-covered items:

  • Commercial items (e.g., control systems)
  • Commercial off-the-shelf (COTS) products (e.g., modules and standard inverters)
  • Construction materials (e.g., concrete, wire, conduit)
  • Iron/steel items (e.g., steel racking purlins).

Table 2 lists the applicable rule based on the item type, with examples relevant to solar PV systems.

Table 2. Buy American Act Rules as They Apply to Solar Photovoltaic Technologies
CategoryDomestic MadeDomestic Made + Domestic ContentSolar PV Examples
Commercial itemsYesYesTransformers, disconnect switches, meters
COTS itemsYesNoModules and inverters
Construction materialYesYesConcrete, rebar, foundation piles, wire, conduit
Substantially of iron or steelYesYesSteel racking

Learn More About Buy American Act Procurement

FEMP provides the following resources to help agencies to prioritize American-made products in federal government procurements.