Do you want to reduce your company’s carbon footprint while simultaneously saving money on energy expenses? The USDA’s new program, REAP (Renewable Energy Systems and Energy Efficiency Improvement Guaranteed Loans and Grants), is here to help. The USDA launched this program to support renewable energy systems and energy efficiency improvements in rural areas.
Certainly, REAP is an excellent option for those looking to make environmentally friendly upgrades without breaking the bank. This program provides financial assistance to electric cooperatives in rural areas, public utilities in rural areas, Native American tribes, and nonprofit entities. Keep reading to learn more about this valuable program and how it can benefit your business or farm.
What is REAP?
The program’s full name is ‘Rural Energy for America Program Renewable Energy Systems & Energy Efficiency Improvement Guaranteed Loans and Grants Program.
The program offers secured loan financing and grant financing to agricultural producers and small rural businesses for renewable energy systems or energy efficiency improvements. Additionally, agricultural producers may apply for the installation of energy-efficient equipment and the provision of new system loans for the purpose of agricultural production and processing.
REAP offers a variety of funding options, including:
Guaranteed loans: REAP can guarantee up to 75% of the loan amount for eligible projects. This can help borrowers obtain lower interest rates and more favorable terms from lenders.
Grants: REAP can provide grants of up to 50% of the project cost for eligible projects. The grants do not require repayment, and they can be used to assist borrowers in covering the initial costs associated with renewable energy sources or energy efficiency improvements.
Combined Grant and Loan: The combination of grant and loan guarantees financing up to 75% of total eligible project costs.
Who May Apply For This Program?
REAP is available to agricultural producers and rural small businesses that meet the following eligibility criteria:
- The applicant must be located in a rural area with a population of 50,000 or fewer.
- The applicant must be engaged in agricultural production or a rural small business.
- The applicant must demonstrate that the project will reduce energy costs or consumption.
- Small Business Administration size standards must be met, as outlined in 13 CFR 121.
How May the Funds Be Used?
REAP is a great resource for agricultural producers and rural small businesses that are looking to reduce their energy costs and improve their environmental impact. If you are interested in landing finance under this program, first know how the funds may be used.
Here are some additional details about how funds may be used:
- Renewable energy systems: Renewable Energy Assurance (REAP) funds can be used for the purchase and installation of a range of energy systems, from solar panels to wind turbines to geothermal systems.
- Energy efficiency improvements: REAP funds can also be used to make energy efficiency improvements to existing buildings and equipment. These improvements can help to reduce energy consumption and save money on energy bills.
- Technical assistance: REAP also provides technical assistance to agricultural producers and rural small businesses that are interested in renewable energy or energy efficiency projects. This assistance can help with project planning, design, and implementation.
What Funding is Available?
The amount of funding available under this program to each applicant will vary depending on the project’s costs and the applicant’s financial needs.
Loan Guarantees:
REAP provides loan guarantees to agricultural producers and rural small businesses that are unable to obtain conventional financing for renewable energy or energy efficiency projects. Loan guarantees can cover up to 75% of the total project costs.
Grants:
REAP also provides grants to agricultural producers and rural small businesses that are working on renewable energy or energy efficiency projects. Grants can cover up to 50% of the total project costs.
Combined Funding:
In some cases, REAP may be able to provide a combination of loan guarantees and grants to an applicant. This can help to reduce the applicant’s overall cost of financing their project.
Maximum Amount of Loan Guarantee:
The maximum amount of a loan guarantee that is available through REAP is published annually in a Federal Register notice. For Fiscal Year 2024, the maximum loan guarantee is 80%.
Grant Terms:
The terms of REAP grants vary depending on the type of project. Renewable energy system grants have a minimum of $2,500 and a maximum of $1 million. Energy efficiency grants have a minimum of $1,500 and a maximum of $500,000.
The Application Dates for REAP Program
USDA is currently accepting REAP applications for Fiscal Year 2024 for Quarter 1. Applications are accepted on a rolling basis, with three application windows remaining. The following application windows are currently open:
- March 31, 2024
- June 30, 2024
- September 30, 2024
How Can August Brown Help?
August Brown can be a valuable asset in conducting feasibility studies for the USDA’s several programs. REAP is one of them. August Brown have extensive experience in the renewable energy sector and have worked on numerous projects related to sustainability and energy efficiency improvement.
We can help you:
- Assess the feasibility of your project
- Develop a project budget
- Identify and secure funding
- Manage the project
We are dedicated to assisting you in achieving your REAP goals. Get in touch with us today to find out more about our services.
Conclusion
The Rural for America Program provides a range of financing options to support agricultural producers and small rural businesses in their efforts to reduce energy costs and consumption. These funding options include secured loans and grants to assist borrowers in financing renewable energy sources and energy efficiency upgrades.
If you are interested in learning more about REAP, please contact your local USDA Rural Development office.
Reference:
https://www.rd.usda.gov/inflation-reduction-act/rural-energy-america-program-reap