The Rural Business-Cooperative Service of the United States Department of Agriculture (“USDA”) is implementing the Rural Energy for America Program (“REAP”) for fiscal year 2010. This REAP notice (“REAP Notice”) announces that the Rural Business-Cooperative Service is accepting applications for the purchase of renewable energy systems and the making of energy efficiency improvements for agriculture producers and rural small businesses in eligible rural areas. Funding will be available in the form of grants and loan guarantees or a combination of both. Complete applications must be received by no later than June 30, 2010.
Eligibility for 2010 REAP guaranteed loans/grants
Projects eligible for REAP guaranteed loans and grants include renewable energy and energy efficiency projects. Eligible renewable energy projects include projects that produce energy from wind, solar, biomass, geothermal, hydro power, and hydrogen-based sources. The projects can produce any form of energy including, heat, electricity, or fuel. Eligible energy efficiency projects include projects such as retrofitting lighting or insulation, or purchasing or replacing equipment with more energy efficient units. Energy efficiency improvements to existing renewable energy systems are eligible energy efficiency improvement projects.
REAP guaranteed loan specifications
The REAP Guaranteed Loan Program encourages the commercial financing of renewable energy (bioenergy, geothermal, hydrogen, solar, wind, and hydro power) and energy efficiency projects. Under the program, project developers will work with local lenders, who
in turn can apply to the USDA Rural Development for a loan guarantee. Borrowers must be an agricultural producer or rural small business. Agricultural producers must gain 50% or more of their gross income from their agricultural operations. Most lenders are eligible, including national and state-chartered banks, Farm Credit System banks, and savings and loan associations. Other lenders may be eligible if approved by the USDA.
Loans Limits:
- Loans up to 75% of the project’s cost
- Maximum of $25 million, minimum of $5,000
Maximum percentage of guarantee (applies to whole loan):
- 85% for loan of $600,000 or less
- 80% for loans greater than $600,000 but $5 million or less
- 70% for loans greater than $5 million up to $10 million
- 60% for loans greater than $10 million
REAP Grants Program specifications
The Grants Program provides grants for energy audits and renewable energy development assistance. It also provides funds to agricultural producers and rural small businesses to purchase and install renewable energy systems and make energy efficiency improvements. The grants are awarded on a competitive basis and can be up to 25% of total eligible project costs. Most rural projects that reduce energy use and result in savings for the agricultural producer or small business are eligible as energy efficiency projects. Eligible renewable energy projects include projects that produce energy from wind, solar, biomass, geothermal, hydro power, and hydrogen-based sources. The projects can produce any form of energy including heat, electricity, or fuel.
For renewable energy system grants, the minimum grant is $2,500 and the maximum is $500,000. For energy efficiency improvement grants, the minimum grant is $1,500 and the maximum grant is $250,000. For grant and loan combination packages, the minimum grant portion of the combined funding request is $1,500 for energy efficiency improvement projects and $2,500 for renewable energy system projects.
For more information on other USDA programs available for energy projects, click here.