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USDA - Rural Energy for America Program (REAP) Loan Guarantees

Eligibility 
Agricultural
Commercial
Savings Category 
Fuel Cells using Renewable Fuels
Photovoltaics
Solar Water Heat
Maximum Rebate 

$25 million per loan guarantee

Program Info
Start Date 

FY 2003

Program Type 
Federal Loan Program
Rebate Amount 

Varies

Provider 
U.S. Department of Agriculture

'''''Note: The U.S. Department of Agriculture's Rural Development issues periodic Notices of Solicitation of Applications for the Rural Energy for America Program (REAP). The deadline to apply for loan guarantees under the most recent solicitation is July 15, 2013, though combined grant and loan guarantee applications and grant only applications have an earlier deadline of May 31, 2013. Check the program web site above for application materials and information regarding future solicitations. '''''

''The Food, Conservation, and Energy Act of 2008'' ([http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills... H.R. 2419]), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, the REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the new program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013.

Of the total REAP funding available, approximately 88% is dedicated to competitive grants and loan guarantees for energy efficiency improvements and renewable energy systems. These incentives are available to agricultural producers and rural small businesses to purchase renewable energy systems (including systems that may be used to produce and sell electricity) and to make energy efficiency improvements. Funding is also available to conduct relevant feasibility studies, with approximately 2% of total funding being available for feasibility studies. Eligible renewable energy projects include wind, solar, biomass and geothermal; and hydrogen derived from biomass or water using wind, solar or geothermal energy sources. These grants are limited to 25% of a proposed project's cost, and a loan guarantee may not exceed $25 million. The combined amount of a grant and loan guarantee must be at least $5,000 (with the grant portion at least $1,500) and may not exceed 75% of the project’s cost. In general, a minimum of 20% of the funds available for these incentives will be dedicated to grants of $20,000 or less. The USDA likely will announce the availability of funding for this component of REAP through a Notice of Funds Availability (NOFA).

The USDA will also make competitive grants to eligible entities to provide assistance to agricultural producers and rural small businesses “to become more energy efficient” and “to use renewable energy technologies and resources.” These grants are generally available to state government entities, local governments, tribal governments, land-grant colleges and universities, rural electric cooperatives and public power entities, and other entities, as determined by the USDA. These grants may be used for conducting and promoting energy audits; and for providing recommendations and information related to energy efficiency and renewable energy. Of the total REAP funding available, approximately 9% is dedicated to competitive grants for energy technical assistance.

''* The Renewable Energy Systems and Energy Efficiency Improvements Program was created by the USDA pursuant to Section 9006 of the 2002 federal ''Farm Security and Rural Investment Act of 2002''. ''Funding in the amount of $23 million per year was appropriated for each fiscal year from FY 2003-2007. In March 2008, the USDA announced that it would accept $220.9 million in applications for grants, loan guarantees, and loan/grant combination packages under the Renewable Energy Systems and Energy Efficiency Improvements Program. The application deadline was June 16, 2008.''''