The U.S. Department of Agriculture’s Rural Development periodically announces solicitations for the Rural Energy for America Program (REAP) through the Federal Register. In FY 2018, the program had a budget of around $800 million.
REAP offers financial support to agricultural producers and rural small businesses for acquiring, installing, and building renewable energy systems, as well as for enhancing energy efficiency in non-residential buildings. Eligible activities include participating in energy audits and utilizing renewable technologies that decrease energy consumption.
Projects covered under the Renewable Energy Systems and Energy Efficiency Improvement Guaranteed Loan and Grant Program encompass wind, solar, biomass, geothermal, and hydrogen derived from biomass or water using renewable energy sources. Grants are capped at 25% of the project cost, with a maximum loan guarantee of $25 million. The combined grant and loan guarantee must be at least $5,000, with the grant portion exceeding $1,500 and not surpassing 75% of the project’s cost. Typically, a minimum of 20% of available funds are allocated to grants of $20,000 or less.
Application deadlines are announced annually in the Notice of Funding Availability.
Eligibility criteria:
- Grants and Guaranteed Loans are generally open to small businesses, agricultural producers, and other entities as determined by the USDA.
- Applicants must demonstrate adequate revenue to cover operations, maintenance expenses, and any applicable debt service of the project throughout the guaranteed loan or grant period.
- Rural small businesses must be situated in rural areas, while agricultural producers can be in non-rural areas.
Eligible project costs encompass purchasing energy efficiency improvements or renewable energy systems, energy audits or assessments, permitting and licensing fees, and business plans and retrofitting. For new constructions, replacing older equipment with more efficient ones is eligible only if the new facility is planned to be more efficient and of similar size as the older one. Working capital and land acquisition are eligible only for loan guarantees.
Regional rural energy coordinators offer loan and grant applications upon request.
History:
The Food, Conservation, and Energy Act of 2008 converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program into REAP, with funding allocated by Congress in various amounts from FY 2009 to FY 2012. The program is administered by the USDA, with discretionary funding available annually. The American Taxpayer Relief Act of 2012 extended discretionary funding for FY 2013. The 2014 Farm Bill reauthorized USDA programs and removed the mandate for grants for feasibility studies.
Land grant colleges and universities are considered eligible sectors, while K-12 schools are ineligible for this grant.
