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 bio-energy projects. The program is made up of three 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 assitance to those looking to purchase renewable energy systems.

Energy Audit and Renewable Energy Development Assistance Grant Program

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

Feasibility Studies Grant

The Renewable Energy System Grant and Energy Improvement Program requires a feasibility study to be considered eligible for the program. The Feasibility Studies Grant assists those applicants in need of a study.

2016 REAP Annoucement: For 2016, the USDA has announced a total funding of $300 million available to eligible applicants. These available funds are broken up between different areas of the program:

  • $68 Million-Unrestricted Grants
  • $10 Million- Grants $20,000 or less
  • $2 Million- Energy Audit / Renewable Energy Development Assistance Grants
  • $200 Million (over)- Guaranteed Loans

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.


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 here to view the second round of awardees.


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.


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.


For the 2013 fiscal year, the USDA funded over 450 projects for a total of 631 projects for the year. The program has awarded more than $21 million for 2013. Click here for a latest list of 2013 awards.

How can the funds be used? 
An applicant can use the awarded funds to purchase and install non-residential energy efficiency improvements to a building or process which results in reduced energy consumption. Strong preference is given for technology that is “commercially available” – i.e., 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 & equipment (new or refurbished) – both purchase & installation (including reimbursement for these costs only if the costs were incurred after submitting your application). .
  • Energy-efficient real estate improvements – both materials & 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 in the same size and purpose.
  • Costs directly attributed to energy efficiency improvements over & above conventional design and as supported by an energy audit.
  • Energy audits, permits, professional fees (except application packaging), feasibility studies, & business plans (including reimbursement for such costs whether incurred before or after applying)
  • Vehicles & farm equipment are ineligible

Who can apply?

  • Rural small businesses – “Rural” means the project is not located in a Census-defined Metropolitan Statistical Areas . “Small” is as defined by SBA and depends on business type – typically < 500 employees & revenue < $6.5 million.
  • Agricultural producers (including nurseries & dairies) – 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” – 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 & 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 & 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, & 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.