USDA publishes final rule for REAP program

By Erin Voegele | January 02, 2015

On Dec. 29, the USDA published a final rule in the Federal Register for the Rural Energy for America Program. The program, which was established by the 2008 Farm Bill and reauthorized by the 2014 Farm Bill, provides financial assistance to agricultural producers and rural small businesses to purchase, install and construct renewable energy systems.

The program contains two main components. The first is a loan guarantee and grant program that provides financial assistance for the purchase, installation and construction of renewable energy systems. It also supports energy efficiency improvements, the use of renewable technologies that reduce energy consumption, energy audits, renewable development assistance and feasibility studies. The second component of the program provides grant assistance to entities that will assist agricultural producers and small rural businesses by conducting energy audits and providing information on renewable energy development assistance. 

The final rule published in December modifies REAP based on comments received on the interim rule, which was published in April 2011, and the proposed rule, published two years later in April 2013. According to the Federal Register, the rule establishes provisions for grants and loan guarantees available for renewable energy systems and energy efficiency improvements and for grants available for energy audits and for renewable energy development assistance.  

Within the rule, the USDA’s Rural Businesses Cooperative Service estimates in a typical fiscal year a total of 1,393 total REAP awards will be made, with more than a third of those awards supporting renewable energy systems (RES). Most of the RES awards are expected to be associated with solar, followed by wind and biomass projects. Bioenergy and anaerobic digestion projects are among those eligible for the program.

The rule describes several major changes that have been made to the proposed rule. A three-tier application process has been put in place based on total project costs. The final rule also reduces the technical reports requirements of the program and removes pre-commercial technologies from the list of eligible technologies. In addition the rule modifies several scoring criteria for RES and energy efficiency improvements (EEI). For energy audits (EA) and renewable energy development assistance (REDA) projects, the final rule removes scoring criterion regarding contracting. The notice published in the Federal Register also specifies the final rule incorporates grant and guaranteed loan application deadline dates that allow the USDA to meet statutory deadlines for funding the EA and REDA grants and RES and EEI grants of $20,000 or less.

A full copy of the notice is available on the Federal Register website.