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The United States Department of Agriculture Rural Business-Cooperative Service is accepting applications for the Rural Energy for America Program (REAP) & Energy Efficiency Improvement Guaranteed Loans & Grants. There is approximately $50 million available in mandatory funding for the 2022 Fiscal Year (FY)

What is the purpose of the program? The program provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements. Agricultural producers may also apply for new energy efficient equipment and new system loans for agricultural production and processing.

REAP has two types of funding assistance: (1) Renewable Energy Systems, Energy Efficiency Improvements (RES/EEI) and Energy Efficient Equipment and Systems (EEE) and (2) Energy Audit and Renewable Energy Development Assistance (EA/ REDA). The RES/EEI provides grants and guaranteed loans to agricultural producers and rural small businesses for the purchase and installation of renewable energy systems and to make energy efficiency improvements. The EEE provides solely guaranteed loans to agricultural producers to purchase and install energy efficient equipment and systems for agricultural production and processing. The EA/REDA is available to a unit of State, Tribal, or local government; instrumentality of a State, Tribal, or local government; institution of higher education; rural electric cooperative; a public power entity; or a council, as defined under the Resource Conservation and Development program.

The following information relates to the RES/EEI funding assistance type.

Who is eligible for the program? Eligible entities for the program include:

• Agricultural producers with at least 50 percent of their gross income coming from agricultural operations.
• Small businesses in eligible rural areas.

Who may qualify for loan guarantees? Eligible borrowers include:

• 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 are eligible areas? Eligible areas for the program include:

• Businesses must be in located in rural areas with populations of 50,000 residents or less. 
• Check eligible business addresses.
• Agricultural producers may be in rural or non-rural areas.

How may the funds be used? Funds may be used in the following two ways: 1) For renewable energy systems, such as: biomass (for example: biodiesel and ethanol, anaerobic digesters, and solid fuels); geothermal for electric generation or direct use; hydropower below 30 megawatts; hydrogen; small and large wind generation; small and large solar generation; ocean (tidal, current, thermal) generation.

2) For the purchase, installation and construction of energy efficiency improvements, such as: high efficiency heating, ventilation and air conditioning systems (HVAC); insulation; lighting; cooling or refrigeration units; doors and windows; electric, solar or gravity pumps for sprinkler pivots; switching from a diesel to electric irrigation motor; replacement of energy-inefficient equipment.

Agricultural producers may also use guaranteed loan funds to install energy efficient equipment and systems for agricultural production or processing.

What is the project period? The project period for the grant program is up to 24 months.

What are the funding levels and are there any additional requirements for the program? Funding levels and additional program requirements include:

• Applicants may request from $2,500 - $500,000 for Renewable Energy System Grants and $1,500 - $250,000 for Energy Efficiency Grants.
• 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.

When are applications due? While the REAP program is a continuous application cycle, to ensure that small projects have a fair opportunity to compete for the funding and consistent with the priorities set forth, USDA will set-aside not less than 20 percent of the FY funds until June 30, 2022 to fund grants of $20,000 or less. Each Rural Development State Office will receive a set-aside allocation of funds for grant requests of $20,000 or less, which includes combination grant and guaranteed loan requests where the grant amount requested is $20,000 or less. Complete grant applications requesting $20,000 or less, including the grant portion of a combined grant and guaranteed loan request, received by October 31, 2021 will compete for approximately 50 percent of the state’s set-aside allocation, and those received by March 31, 2022 will compete for the second 50 percent (approximately) of the state’s set-aside allocation. Any unobligated balance of funds remaining in state set-aside accounts will be pooled to the National Office for a national set-aside competition. Obligation of set-aside grant funds will take place through June 30, 2022.

Each Rural Development State Office will also receive an unrestricted allocation of grant funds that can be used to fund any RES/EEI grant application regardless of the amount of grant requested, including the grant portion of a combination grant and guaranteed loan request, that is received by March 31, 2022. Any unobligated balance of funds remaining in state unrestricted accounts will be pooled to the National Office for a national competition of funds. Obligation of unrestricted grant funds will take place through September 30, 2022.

The Notice of Solicitation of Applications can be found here.

For more information on this grant or how to apply with Morrison’s assistance, please contact the Morrison Grants Team by email at grants@morrisonco.net or call us at 530-893-4764.