; and (C) prioritize projects from eligible entities that do not have an energy storage system. (4) Objectives Each demonstration and deployment project selected for a grant under paragraph (1) shall include one or more of the following objectives: (A) To improve the security of critical infrastructure and emergency response systems. (B) To improve the reliability of the transmission and distribution system, particularly in rural areas, including high energy cost rural areas. (C) To optimize transmission or distribution system operation and power quality to defer or avoid costs of replacing or upgrading electric grid infrastructure, including transformers and substations. (D) To supply energy at peak periods of demand on the electric grid or during periods of significant variation of electric grid supply. (E) To reduce peak loads of homes and businesses, particularly to defer or avoid investments in new electric grid capacity. (F) To advance power conversion systems to make the systems smarter, more efficient, able to communicate with other inverters, and able to control voltage. (G) To provide ancillary services for grid stability and management. (H) To meet electricity demand during nonpeak generation periods to make better use of existing grid assets. (I) To integrate a renewable energy resource production source at the source or away from the source. (J) To increase the feasibility of microgrids or islanding. (5) Restriction on use of funds Any eligible entity that receives a grant under paragraph (1) may only use the grant to fund programs relating to the demonstration and deployment of energy storage systems in households, businesses, and communities. (6) Funding limitations (A) Federal cost share The Federal cost share of a project carried out with a grant under paragraph (1) shall be not more than 50 percent of the total costs incurred in connection with the development, construction, acquisition of components for, or engineering of a demonstration project. (B) Maximum grant The maximum amount of a grant