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.
This program offers assistance to entities that conduct energy audits and provides information on renewable energy for agricultural producers and rural businesses.
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. Anticipated funding for FY 2020 is $50 million.
Rural Energy for America Program (REAP) Fiscal Year 2021 funding amounts will be published with the enactment of the full-year appropriations act.
REAP awarded over $9.3 million in grant funding in FY 2019. For a list of August 2019 awardees, click here. A full list of all Rural Development program awardees can be found here.
For the FY 2018 REAP funding, totaled approximately $42.5 million in grants and loan guarantees. A list of all projects awarded during this year can be found here.
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.
How can the funds be used?
- 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.
- 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.
