What is REAP?
The Rural Energy for America Program helps provide agricultural producers and rural businesses with loan and grant options to help fund their eligible bioenergy projects. The program is made up of two areas: The Renewable Energy System and Energy Efficiency Improvement Loan and Grant Program and The Energy Audit and Renewable Energy Development Assistance Grant Program.


Renewable Energy System and Energy Efficiency Improvement Program

This grant and loan program provides up to 25% of the cost to make facilities more energy efficient. It also offers assistance to those looking to purchase renewable energy systems. A feasibility study is required for a renewable energy systems project of up to $200,000 or more.

Energy Audit and Renewable Energy Development Assistance Grant Program

This program offers assistance to entities that conduct energy audits and provides information on renewable energy  for agricultural producers and rural businesses.

 


Below are the funds available from REAP for FY 2018:

  • Guaranteed Loans: $565,139,914
  • Unrestricted Grants: $26,359,313
  • Grants of $20,000 or Less: $9,390,996

How much funding has been available?

Each year, Congress allocates a specific amount of funding for these grants, and in addition to these mandatory funding levels, there may also be discretionary funding issued each year. Applications are accepted throughout the year, but funding is subject to availability. Awards are announced twice a year.

2016

Over 1,200 small businesses received REAP funding in 2016, totaling over $290 million in grants and loan guarantees. Click here to view a full list of first round funded projects, and click here to view the second round of awardees.

2015

Over 1,100 projects were funded by REAP in 2015 for a total award of over $102 million in grants and loans. Click here for a complete list of funded projects.

2014

In 2014, the USDA’s REAP funded a grand total of over $68.8 million to projects. A full list of projects that were funded in 2014 can be found here.

How can the funds be used? 

An applicant can use the awarded funds to purchase and install non-residential energy efficiency improvements for a building or a process which results in reduced energy consumption. Strong preference is given for technology that is “commercially available” – i.e., technology that has a proven operating history and has an established design, installation, and service industry. Pre-commercial technologies may qualify but require substantially more documentation. Experimental projects are not eligible. The applicant must own and control the system, though a qualified third-party may be engaged to operate it.

  • Energy-efficient fixtures, machinery, and equipment (new or refurbished) – both purchase and installation (including reimbursement for these costs only if the costs were incurred after submitting your application).
  • Energy-efficient real estate improvements – both materials and construction (including reimbursement for these costs only if the costs were incurred after submitting your application).
  • New facilities are ineligible unless they exactly replace an existing inefficient facility of the same size and purpose.
  • Costs directly attributed to energy efficiency improvements over and above conventional design and as supported by an energy audit.
  • Energy audits, permits, professional fees (except application packaging), feasibility studies, and business plans (including reimbursement for such costs whether incurred before or after applying).
  • Vehicles and farm equipment are ineligible.

Who can apply?

  • Rural small businesses, “rural” meaning that the project is not located in a Census-defined Metropolitan Statistical Area. “Small” is as defined by SBA and depends on business type, typically < 500 employees & revenue < $6.5 million.
  • Agricultural producers (including nurseries and dairies) who are individuals or business entities receiving at least 50% of gross income from agriculture. (The SBA-“small business” limitation does not apply to ag producers.)
  • Preference is given to “very small businesses” which are those with < 15 employees & < $1 million in annual receipts.
  • The applicant must have a demonstrable financial need for the grant assistance.
  • Majority ownership must be held by US citizens or permanent residents.
  • Nonprofits and public projects are not eligible.

Additional requirements

  • Matching funds – 75% of the project cost must come from non-Federal funds. “In-kind” contributions from third parties of up to 10% of the project cost may be counted toward the match.
  • Energy audit – a report by an independent, professional, qualified party (such as a Certified Energy Manager) is required with the application. (Applications for < $50,000 are exempt from this requirement, but receive extra priority points for meeting it.) The audit must address current energy use, recommended improvements and costs, energy savings from the improvements, dollars saved per year, and weighted-average payback in years.
  • Interim financing – Grant funds are typically disbursed when the project is complete, tested, and certified operational.

How are REAP Applications scored?
Starting in 2015, REAP applications are now scored on a national level on a 100-point scale. For more information, visit the USDA’s website or contact Matson Consulting today.