The United States currently gets 5.7% of its electricity—and 27% of its renewable electricity generation—from hydropower facilities, which provide a reliable and flexible source of power. Hydropower also provides critical energy storage, and pumped storage hydropower accounts for 96% of all utility-scale energy storage capacity in the United States. But as today’s facilities age and become more expensive to maintain, the United States risks losing a major source of energy and well-paying jobs.
Leveraging operational flexibility and energy storage capabilities, hydropower supports energy resource adequacy to ensure the availability of reliable generation capacity allowing all Americans access to resilient and affordable electricity. The Infrastructure Investment and Jobs Act (IIJA) invests in maintaining and enhancing existing hydroelectric facilities to ensure generators continue to provide clean electricity, while improving dam safety and reducing environmental impacts.
Incentives Overview
Latest News
Hydroelectric Production Incentives (Provision 40331 and EPAct 242) will provide $125 million in incentive payments to qualified hydroelectric facilities for electricity generated and sold.
- On October 9, 2024, the U.S. Department of Energy (DOE) announced 39 hydroelectric facilities throughout the country will receive $12 million in incentive payments for electricity generated and sold in calendar year 2023. See the full list of selected entities.
Hydroelectric Efficiency Improvement Incentives (Provision 40332 and EPAct 243) invests $75 million to enable implementation of capital improvements to improve efficiency.
- On February 2, 2024, DOE announced the selection of 46 efficiency improvement projects across 19 states to receive up to $71.5 million in Hydroelectric Efficiency Improvement Incentive payments. The 46 selected projects can be found in California, Colorado, Connecticut, Georgia, Idaho, Maine, Massachusetts, New Hampshire, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia, Washington, and West Virginia. See the full list of selected entities.
Maintaining and Enhancing Hydroelectricity Incentives (Provision 40333 and EPAct 247) invests $554 million to enhance existing hydropower facilities for capital improvements directly related to grid resiliency, dam safety, and environmental improvements.
- On September 5, 2024, the Grid Deployment Office announced the selection of 293 capital improvement projects for negotiations across 33 states to receive over $430 million in Maintaining and Enhancing Hydroelectricity Incentive payments. DOE anticipates announcing a second round under this program in the 2025 calendar year. See the full list of selected entities.
Background
The Hydroelectric Production Incentives (Provision 40331 and EPAct 242) and the Hydroelectric Efficiency Improvement Incentives (Provision 40332 and EPAct 243) were authorized by Congress through the Energy Policy Act of 2005.
Since 2014, Congress has directed funding annually through the appropriations process for the Section 242 program. The Infrastructure Investment and Jobs Act (IIJA) directed funding to the Section 243 program for the first time and also amended the Energy Policy Act of 2005 to create and fund the Maintaining and Enhancing Hydroelectricity Incentives (Provision 40333 and EPAct 247).
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