REAP Helps Growers Get Energy Efficient

The Rural Business–Cooperative Service invited agricultural producers and rural small businesses to apply for Rural Energy for America Program (REAP) grants and loan guarantees on January 20, 2012. REAP is designed to assist applicants install renewable energy systems and make energy efficiency improvements.

Renewable energy systems can include solar electric, solar thermal, wind, geothermal, biomass, blender pumps and anaerobic digestion systems. Energy efficiency improvement systems can include lighting improvements, insulation, electric motor replacements and other energy efficiency improvement projects as outlined in an energy audit.

Grants are available on a competitive basis for up to 25 percent of the eligible project costs and loan guarantees are available for up to 75 percent of the eligible project costs. Combination grant and loan guarantee applications cannot exceed 75 percent of eligible project costs.

Nationally, funding available in Fiscal year 2012 will be used to support REAP grants totaling $12,500,000 and loan guarantees totaling $48,500,000. The funds available for Fiscal Year 2012 are reduced substantially from previous years resulting in increased competition for the limited funding available.

As in previous years, increased emphasis is being placed on projects which are requesting less than $20,000. Congress has authorized a specific budget allocation to fund these smaller projects which provide energy efficiencies or can produce renewable energy for the applicant.

Additional emphasis is being placed upon loan guarantees. The loan guarantee program can be a great benefit to a lender looking to reduce their risk exposure while increasing their income. For a borrower, the benefits include access capital on better rates and terms. This results in an improved cash flow and a successful business.

For more information or if you are interested in pursuing a grant or loan guarantee for the Rural Energy for America Program, please go to www.rurdev.usda.gov.

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