USDA REAP Grant: Unlocking Renewable Energy Benefits – 2023

Introduction – Unlock The Benefits Of Applying For A USDA REAP Grant

Here at ShrinkThatFootprint we focus on renewable energy for residents. But renewable energy systems are not just for residents, they’re also for businesses. Since 2008 the USDA has a run program called the REAP Grant. A USDA REAP Grant is a grant offered by the United States Department of Agriculture (USDA) to eligible businesses, farms, and rural small businesses. These grants are designed to help these organizations purchase renewable energy systems, make energy efficiency improvements, and become more energy efficient.

Rural producers and businesses are eligible for REAP grants

Why Is The US Government Giving Money Away Through REAP?

This program helps increase American energy independence by providing funding to eligible businesses, farms, and rural small businesses for renewable energy systems, energy efficiency improvements, and energy-saving projects.

By increasing the private sector supply of renewable energy and decreasing the demand for energy through energy efficiency improvements, the program can help reduce energy costs and increase energy independence. Over time, these investments can also help lower the cost of energy for small businesses and agricultural producers, making it easier for them to operate competitively.

REAP is not the only grant related to local businesses. The LFFP is another USDA administered grant that promotes local, regional food development.

The Value Of The Grants Range from $1,500 to $1 Million

The most interesting question to many rural businesses is the amounts you can get. The total amounts depend on the type of projects. For purchasing a renewable energy system, the amounts are these:

  • $2,500 minimum.
  • $1 million maximum.

If you don’t want to buy a new system or already have one, you’re still eligible for money to increase energy efficiency. The amounts are slightly less:

  • $1,500 minimum.
  • $500,000 maximum.

The benefits of applying for a USDA REAP Grant include access to funds to install or augment renewable energy systems, the ability to reduce energy costs and increase productivity, and the potential to receive additional benefits such as tax credits.

Eligible Renewable Systems

Eligible renewable energy projects go beyond just solar, and include the following:

  • Biomass (for example: biodiesel and ethanol, anaerobic digesters, and solid fuels).
  • Geothermal for electric generation or direct use.
  • Hydropower below 30 megawatts.
  • Hydrogen.
  • Small and large wind generation.
  • Small and large solar generation.
  • Ocean (tidal, current, thermal) generation.

Who Is Eligible To Apply For A USDA REAP Grant? – Determine Your Eligibility

There are a number of eligibility requirements for application. Businesses, farms, and rural small businesses may be eligible to apply for a USDA REAP Grant. To be eligible, businesses must be located in rural areas and have energy efficiency projects that are economically feasible.

Farms must be located in rural areas and must be able to demonstrate that their energy efficiency projects will have a positive economic impact. Rural small businesses must have 500 employees or fewer and be able to demonstrate that their energy efficiency projects will have a positive economic impact.

Basic requirements:

  • Agricultural producers with at least 50 percent of their gross income coming from agricultural operations.
  • Small businesses in eligible rural areas.

Two types of entities are eligible:

  • Rural small businesses.
  • Agricultural producers.

There are citizenship and residential requirements

  • Individual borrowers must be citizens of the United States or reside in the U.S. after being legally admitted for permanent residence.
  • Private-entity borrowers must demonstrate that loan funds will remain in the U.S.

Definition of rural areas differs for businesses vs agricultural producers:

  • Businesses must be in located in rural areas with populations of 50,000 residents or less. 
  • List of eligible business addresses.
  • Agricultural producers may be in rural or non-rural areas.

Energy Efficiency

In addition to the solar projects we listed above, the grants are also used for improving energy efficiency. A list of the eligible improvement projects are these:

  • High efficiency heating, ventilation and air conditioning systems (HVAC).
  • Insulation.
  • Lighting.
  • Cooling or refrigeration units.
  • Doors and windows.
  • Electric, solar or gravity pumps for sprinkler pivots.
  • Switching from a diesel to electric irrigation motor.
  • Replacement of energy-inefficient equipment.

If you look at this list, insulation plays an incredible role in energy efficiency. It’s the only one where you don’t have to burn any carbon to get more efficiency out of existing systems.

Additional Restrictions

In order to apply for a USDA REAP Grant, applicants must provide at least 60 percent of the project cost if applying for a grant only and at least 25 percent of the project cost if applying for loan. All projects must have technical merit and utilize commercially available technology, and energy efficiency projects require an energy audit or assessment.

How To Apply For A USDA REAP Grant – Step-by-Step Guide

The process for applying for a USDA REAP Grant involves determining eligibility, gathering necessary documentation, and completing the application process.

First, contact a local USDA office at any time.

Second, potential applicants must determine if they are eligible by ensuring that they meet the criteria outlined by the USDA.

Third, applicants must gather the necessary documentation, including energy audit reports, energy efficiency project plans, and financial documents.

Fourth, applicants must complete the application process, which involves submitting all documentation along with the application.

Tips for Applying – Maximize Your Potential Benefits

When applying for a USDA REAP Grant, having the right documentation and numbers to back up your eligibility, business and technical feasibility will advance your application far ahead of others. Imagine you’re in the position of the US government, you’d want to fork over your money to something that has both: business merit, and technical merit. That is, it should result in overall gains for the community, and it should have a good chance of success.

It is important to have a clear plan and goals in mind. This will help ensure that the grant is used for the intended purpose and will help applicants maximize the potential benefits.

Additionally, applicants should research other grants in order to find the best option for their needs. It is also important to consider all funding options, including public and private funding sources, in order to find the most beneficial option.

Getting Help

It does not hurt to find someone who has already succeeded into getting one of these grants and asking for advice. The local and federal USDA offices will be able to answer technical questions. Finally the other option is to find a private consultant who specializes in federal grants, ideally that of the USDA, who will be able to minimize your techinical risks. Like you submit an application but forget to include a form, who wants to lose out on a grant due to a technicality?

More questions? We recommend you check out this guide.

Conclusion – Get the Most Out of Your USDA REAP Grant

In conclusion, a USDA REAP Grant is a great option for businesses, farms, and rural small businesses looking to improve their energy efficiency. Understanding the eligibility requirements, gathering the necessary documentation, and completing the application process are all important steps in the process.

Additionally, having a clear plan and goals, researching other grants, and considering all funding options are all important tips to consider when applying for a USDA REAP Grant. By considering these steps and tips, applicants may be able to maximize the potential benefits of the grant.

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