(a) (1) In this section the following words have the meanings indicated.
(2) (i) “Renewable fuel” means gaseous, liquid, or solid fuel from any organic matter and its by-products.
(ii) “Renewable fuel” includes fuel from:
1. an agricultural crop, agricultural waste, or agricultural residue;
2. wood, wood waste, or wood residue;
3. animal waste;
4. aquatic plants;
5. sewage or sewage sludge;
6. municipal, industrial, or commercial waste;
7. any mixture of any of these substances with inorganic refuse from a public or private municipal waste collection system or similar disposal system; or
8. any combination of items 1 through 7 of this subparagraph.
(iii) “Renewable fuel” does not include fossil fuel.
(3) “Transportation facility” means a transportation facility that is used exclusively to transport fuel produced by a fuel production facility to:
(i) a storage facility;
(ii) a pipeline connection to an existing pipeline or processing facility; or
(iii) an area near the fuel production facility.
(b) A project qualifies as an energy project if it consists of:
(1) an energy conservation project;
(2) a solar energy project;
(3) the construction of a facility to produce solar energy equipment;
(4) the construction of a facility or portion of a facility to:
(i) produce renewable fuel; and
(ii) burn renewable fuel, or a mixture of renewable fuel with other materials, to generate:
1. heat;
2. mechanical power;
3. electricity, including by cogeneration; or
4. other useful forms of energy;
(5) the conversion of any facility to use renewable fuel;
(6) the expansion or improvement of a facility that increases its capacity or efficiency to use renewable fuel;
(7) the acquisition and improvement of equipment for use in a facility specified in items (4) through (6) of this subsection;
(8) the acquisition or improvement of land for a facility specified in items (4) through (6) of this subsection;
(9) the purchase, construction, or installation of a facility or equipment to use groundwater as a heat source for a heating system or as a heat sink for an air conditioning system;
(10) the purchase, construction, or installation of a facility or equipment to develop and use the natural heat of the earth for direct use or to generate electricity;
(11) the purchase, construction, and installation of a hydroelectric facility at an existing dam that:
(i) uses the water power potential of the dam; and
(ii) has no more than 30 megawatts of installed capacity;
(12) the construction of a fuel production facility for commercial production of a gaseous, liquid, or solid fuel, or of a combination of them, that:
(i) is produced by chemical or physical transformation of coal or mixtures of coal and other materials;
(ii) can be used as a substitute for petroleum or natural gas, or any of their derivatives, including chemical feedstocks; and
(iii) includes only:
1. the fuel production facility, including the equipment, plant, supplies, and other materials associated with the fuel production facility;
2. the land and mineral rights required directly for use in connection with the fuel production facility;
3. any other facility or equipment to be used in the extraction of a mineral for use directly and exclusively in the fuel production facility that is necessary to the project and is:
A. colocated with or located in the immediate vicinity of the fuel production facility; or
B. if not colocated or located in accordance with item A of this item:
I. a coal mine in the case that no other reasonable source of coal is available to the project; or
II. incidental to the project; and
4. any transportation facility, electric power plant, electric transmission line, or other facility that is:
A. for the exclusive use of the project;
B. incidental to the project; and
C. necessary to the project;
(13) the conversion of a facility from using petroleum-based fuel to coal or to a mixture of coal and other materials as a fuel; or
(14) the construction of a facility to burn coal using innovative technology that increases the efficiency of the combustion process.