USDA Issues Call for Energy Grant

The United States Department of Agriculture (USDA) recently announced that has allocated $70 million in 2010 energy grants for the Rural Energyfor America Program (REAP). Beginning in 2003, the program has eachyear offered grants and loans to farmers and other producers, tribalgovernment entities, rural electricity cooperatives and public powerutilities. The aim is to promote renewable energy and encourage economic activity in rural America.

USDA Reap Grants and Loans

On paper, a REAP grant may not exceed 25percent of the costs of eligible projects, which include solar hot water systems, solar photovoltaic (PV) panels, wind turbines, geothermalsystems and anaerobic digesters, among other energy technologies. Energy efficiency improvements are also eligible. Grants are limited to$500,000 for renewable energy systems and $250,000 for energy efficiency improvements.

In practice, however, smaller projects may stand a better chance atreceiving REAP funding: according to the USDA, “projects seeking REAP grants of $20,000 or less are greatly favored.”

REAP also makes available guaranteed loans worth up to 75 percent of a projects cost, with a minimum loans size of $5,000 and a maximum sizeof $25 million. A combined loan and grant under REAP may not exceed 75percent of the project’s cost.

The deadline to apply for REAP loans and grants for the 2010 fundingcycle is June 30. To qualify, applicants must operate in aUSDA-designated rural area.

REAP was originally called the federal Renewable Energy Systems andEnergy Efficiency Improvements Program, which began in fiscal year 2003. It was founded by the USDA on the heels of the 2002 federal FarmSecurity and Rural Investment Act, and was allocated $23 million a yearthrough 2007. A major switch came in 2008, when the Food Conservationand Energy Act changed the program’s name to REAP.

About 88 percent of REAP funds are expected to be used by rural small businesses looking to buy new energy efficient systems or make smallerenergy efficient changes. Again, the application deadline is June 30,2010. Don’t miss your chance to qualify.

**Note that businesses — such as farms and other rural commercialentities — that install a renewable energy system in 2010 may qualifyfor a treasury grant worth 30 percent ofproject costs. Since companies are not permitted to participate in more than one federal grant program, thetreasury’s program may be a better option of the two for the current year.

USDA Issues Call for Energy Grant, Loan Applications for 2010


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