Environmental & Energy Study Institute (EESI)
February 13, 12015
On February 10, the U.S. Department of Agriculture (USDA) announced the availability of $280 million in grants and loans through the Rural Energy for America Program (REAP). Administered by the USDA’s Rural Business Service, the program provides grants and loans to farmers, ranchers and rural small businesses to install renewable energy systems, make energy efficiency upgrades, and conduct energy audits at businesses and farms. With extreme temperature events and rising costs of energy, Secretary of Agriculture Tom Vilsack underscored the importance of reducing rural America’s energy costs while also lowering the emission of climate change-causing air pollutants. “Developing renewable energy presents an enormous economic opportunity for rural America. Incorporat[ing] renewable energy and energy efficiency technology into their operations … can help a business reduce energy use and costs; … reduce dependence on foreign oil and cut carbon pollution as well.”
Under REAP, the loan program will provide loan guarantees for 75 percent of project costs, and the grants program will fund up to 25 percent of project cost. The maximum grant is $500,000, and for energy audits the maximum grant is $100,000. The maximum loan amount is $25 million. Allowable projects include renewable energy sourced from wind, solar, ocean, small hydropower, hydrogen, geothermal and renewable biomass and biogas. Allowable energy efficiency projects include lighting, heating, cooling, ventilation, fans, automation of controls and upgrades that lower energy consumption. Farms, ranches and small businesses may apply for the grants and loans; state, local and tribal governments, colleges, universities, electric co-ops, public power entities, conservation and development districts may also apply for assistance with energy audits.
Originally created as part of the 2002 Farm Bill, REAP has used its lending and grant-making authority to fund 8,000 projects, of these, 2,900 are renewable energy projects. The USDA estimates that these REAP-funded renewable energy projects will create at least 6 billion kilowatt hours per year, enough energy to power 5.5 million homes a year. The cost of energy bills for producers can be significant. For example, the National Sustainable Agriculture Coalition (NSAC) tells the story of an Iowa organic chicken and dairy farm. According to NSAC, Chuck Bushman used REAP money to install solar panels on his Castalia, IA farm – and cut his electricity bill by a whopping 90 percent. Smart federal investments, like REAP, provides multiple co-benefits; lowered electricity bills, greater energy independence, and lower greenhouse gases. For more information…