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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). There is approximately $600 million available in funding for the 2025, 2026, and 2027 Fiscal Years (FY) with approximately 6,000 grants and guaranteed loans expected to be awarded.

What is the purpose of the REAP program?

The Agency provides grants, guaranteed loans, and grant and guaranteed loan combinations through the REAP program to help agricultural producers and rural small businesses, including Tribally owned or Tribal member owned, reduce energy costs and consumption and help meet the nation’s critical energy needs. This blog will focus on two types of grants available directly to agricultural producers and rural small businesses:

• Renewable Energy Systems (RES) grants fund systems that produce useable energy from a renewable energy source such as wind, solar, renewable biomass, ocean, geothermal, or hydroelectric; or hydrogen derived from renewable biomass or water using one of these energy sources.

• Energy Efficiency Improvements (EEI) grants support improvements to – or replacement of –existing buildings, systems and/or equipment that reduces energy consumption on an annual basis. Examples include 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; and replacement of energy-inefficient equipment.

Who is eligible to apply?

Applicants must be a) agricultural producers, defined as a person, including nonprofits, directly engaged in the production of agricultural products and receiving at least 50 percent of their gross income from operations; or b) rural small businesses, defined as a small business located in a rural area with a population of 50,000 residents or less, determined using USDA’s funding eligibility map.

What is the project period?

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

What are the funding levels and match requirements?

As of the October 16, 2024 Notice of Funding Opportunity (NOFO), the funding source for REAP is expected to be the Inflation Reduction Act (IRA), which allows for up to $1,000,000 in grant funding for an RES project and up to $500,000 in grant funding for an EEI project, with a match requirement of 75 percent. Under IRA funding, certain projects may be eligible for a reduced 50 percent match requirement. These include:

1. Project is a renewable energy system or retrofit of a renewable energy system that produces zero greenhouse gas emissions (carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), or fluorinated gases) at the project level;
2. Project is located in an Energy Community as defined in 26 U.S.C. 45(b)(11)(B), and as determined by the Department of Energy;
3. Project is an energy efficiency improvement project; or
4. Applicant is an eligible Tribal corporation or other Tribal Business entities (including Tribal agriculture operations).

Farm Bill funds and annual appropriated funds, if any, may become available to fund requests that do not exceed 25 percent of total eligible project costs (75 percent applicant match).

When are applications due?

USDA will accept REAP applications for multiple funding cycles through March 31, 2027 with deadlines on September 30, December 31, and March 31 of each year. The agency will not accept applications submitted during an annual application window closing between April 1 and June 30 of each year.

The NOFO 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.