USDA has $280m to help rural businesses REAP energy savings

The Rural Energy for America Programme will provide grants and loans to rural small businesses to fund energy upgrades and help cut costs.

The US Department of Agriculture (USDA) has introduced $280 million in grants and loans through the Rural Energy for America Program (REAP) to help rural businesses cut energy costs through the funding of energy upgrades.

Administered by the USDA’s Rural Business Service, the programme 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.

Under REAP, the loan programme will provide guarantees for 75 percent of project costs, and the grants will fund up to 25 percent of a project’s 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.

The National Sustainable Agriculture Coalition provided the example of an Iowa organic chicken and dairy farm which cut its electricity bill by 90 percent after the farmer used REAP money to install solar panels.

With extreme temperatures and rising costs of energy, Secretary of Agriculture Tom Vilsack underscored the importance of reducing rural America’s energy costs while lowering pollutants.

“Developing renewable energy presents an enormous economic opportunity for rural America. Incorporating 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,” said Vilsack.

Reporting by Andrew Coffman Smith