SBA Changes Size Standards For Solar, Wind, Biomass and Geothermal Renewable Energy Technology And Other Electrical Utilities

As of January 22, 2014, the SBA changed the size standards for renewable energy and other utility contracts to employee-based standards.  Under the final rule, renewable energy contractors will qualify as a small business if the company has less than 250 employees, including the employees of their affiliates.   The SBA now will also use an employee-based size standards for the Hydroelectric, Fossil Fuel and Nuclear Power Electrical Generation, as well as Electrical Power Distribution industries.

Previously, to qualify as a small business concern, a renewable energy company needed to: (1) generate, transmit or distribute less than 4 million megawatt hours of electric energy for sale annually; and (2) be primarily engaged in the generation, transmission or distribution of electrical energy for sale.  Many contractors failed to qualify as a small business because the SBA’s Office of Hearings and Appeals has interpreted this “primarily engaged” standard to require that a majority of the combined revenues of the entity and its affiliates must come from the generation, transmission or distribution of electrical energy for sale.  More contractors will now be eligible for small business status, because the final rule eliminates this “primarily engaged” requirement.

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