What is REAP, and what does this program do for you?
What is REAP?
The program provides Loan Financing and Grant Funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements including new solar systems, equipment and more. Rural Energy for America Program (REAP)
Rural Energy for America Program - USDA
USDA Rural Development
The Rural Energy for America Program (REAP) from USDA Rural Development is a great opportunity for Montana Farm and Ranch operations and rural businesses to save energy with renewable energy systems.
Grants can cover up to 25% of eligible project costs, and loans can cover up to 75% of eligible project costs. The next deadlines for applications are March 31 and October, 31 2021. There is also a shorter application that can be completed without the help of a grant writer for smaller projects.
How does REAP work?
Grants can cover up to 25% of eligible project costs. Applications for renewable energy or energy efficiency grants are due each year on March 31 (all projects) and October 31 (projects $80k or less). Projects requesting grants of up to $20,000 ($80,000 or less total project cost) can fill out a shorter application.
Loans can cover up to 75% of eligible project costs. The Guaranteed Loan-only program will now accept and process applications on a continual basis throughout the year so applications can be submitted at any time.
Are you eligible?
All farms who make at least 50% of their gross income from agricultural production are eligible for REAP. Other farms and rural small businesses that are located in communities with populations less than 50,000 are also eligible.
What Is The USDA REAP Grant?
The Rural Energy for America Program, or better known as the USDA REAP Grant, provides grant funding and guaranteed loan financing to rural small businesses and agricultural producers across the United States, to be used for implementing renewable energy systems or making improvements to overall energy efficiency.
The goal of this program is to increase energy independence in the United States by generating a higher supply of clean energy in the private sector while simultaneously decreasing energy needs. Their hope is that over time, these efforts may reduce energy costs overall for agricultural producers and rural small businesses.
What are the REAP Grant terms?
Renewable Energy System Grants:
👉 $2,500 minimum.
👉 $500,000 maximum.
Energy Efficiency Grants:
👉 $1,500 minimum.
👉 $250,000 maximum.
Rural Energy for America Program - Who?
Who may apply for this program?
Agricultural producers with at least 50 percent of their gross income coming from agricultural operations or small businesses in eligible rural areas.
NOTE: Agricultural producers and small businesses must have NO outstanding delinquent federal taxes, debt, judgment or debarment.
Who may qualify for Grants and Loan Guarantees?
What are the restrictions for Grants and Loan Guarantees?
Individual borrowers must be citizens of the United States or reside in the U.S. after being legally admitted for permanent residence.
Private-entity borrowers must demonstrate that loan funds will remain in the U.S.
What is an eligible area?
Businesses must be in located in rural areas with populations of 50,000 residents or less. to be eligible for Rural Energy for America Program grants and guaranteed loans.
Rural Energy for America Program - How?
How may the funds be used?
Funds may be used for renewable energy systems, such as:
👉 Small and large solar generation
👉 Small and large wind generation.
👉 Geothermal for electric generation or direct use.
👉 Hydropower below 30 megawatts.
Funds may also be used for the purchase, installation and construction of energy efficiency improvements, such as:
👉 Electric, solar or gravity pumps for sprinkler pivots.
👉 Switching from a diesel to electric irrigation motor.
👉 High efficiency heating, ventilation and air conditioning systems (HVAC).
👉 Insulation.
👉 Lighting.
👉 Doors and windows.
👉 Replacement of energy-inefficient equipment.
Rural Energy for America - additional requirements?
Are there additional requirements?
👉 Applicants must provide at least 75 percent of the project cost if applying for a grant only.
👉 Applicants must provide at least 25 percent of the project cost if applying for loan.
👉 All projects must have technical merit and utilize commercially available technology.
👉 Energy efficiency projects require an energy audit or assessment.
What law governs this program?
👉 Grants – Code of Federal Regulation, 7 CFR 4280, Subpart B.
👉 Guaranteed Loans – Code of Federal Regulation, 7 CFR 5001.
This program is authorized by Title IX of the Agricultural Improvement Act of 2018, (2018 Farm Bill).
Why does USDA Rural Development do this?
The Rural Energy for America Program helps increase American energy independence by increasing the private sector supply of renewable energy(solar) and decreasing the demand for energy through energy efficiency improvements. Over time, these investments can also help lower the cost of energy for small businesses and agricultural producers.
