The USDA Rural Energy for America Program (REAP) helps increase American energy independence by increasing the private sector supply of renewable energy and decreasing the demand for energy through energy efficiency improvements. Over time, these investments can also help lower the cost of energy for small businesses and agricultural producers. Program funding for this fiscal year (Fiscal Year 2023) has increased exponentially due in large part to the Inflation Reduction Act (IRA) that was passed in Fiscal Year 2022.
Assistance through REAP program is available to rural small businesses and agricultural producers. Under the IRA, REAP provides guaranteed loans of up to 75% of the cost of eligible projects and grants covering up to 40% of project costs.
Businesses must be located in rural areas with populations of 50,000 residents or less. Agricultural producers may be in rural or non-rural areas.
REAP funding is intended to help agricultural producers and rural small businesses take advantage of renewable energy generation technology, such as:
- Biomass such as biodiesel, solid fuels, or ethanol
- Hydrogen power
- Ocean power
- Solar or wind
- Geothermal
- Hydroelectric below 30 megawatts
The maximum REAP grant for investment in these technologies is $1,000,000.
Businesses may also use funds to upgrade their current infrastructure to energy-efficient technology such as:
- Lighting
- Insulation
- High-efficiency doors, windows, and HVAC systems
- Replacing current energy-efficient equipment
- Switching from diesel energy to electric for equipment
The maximum REAP grant for investment in these technologies is $500,000.
Applicants must provide at least 60% of the project cost if applying for a grant only or 25% of the project costs in applying for a guaranteed loan-only project. All investments must have technical merit and utilize commercially available technology. Energy efficient projects require an energy audit or assessment depending on the total project cost.
For example, if a furniture maker wanted to purchase a $100,000 commercial wood-burning furnace to replace their coal-burning furnace, they could apply for a loan of $75,000 or 75% of the purchase price. Alternatively, they could pay the $60,000 themselves and qualify for a grant for the remaining $40,000.
Applications are accepted during two open periods each fiscal year. For fiscal year 2023, the deadlines are Oct. 31, 2022, and March 31, 2023. Interested business owners can apply by contacting West Virginia’s USDA Rural Development Energy Coordinator Robertho Briceno at (681)247-3007 or via email at Robertho.Briceno@usda.gov. Applicants must undergo a credit evaluation, and the proposed project will be analyzed to determine whether it is eligible for a REAP guaranteed loan or grant.
