USDA holds media call on $280 million REAP funding opportunity

By Erin Voegele | February 10, 2015

On Feb. 10, the USDA hosted a media call announcing more than $280 million is being made available to eligible applicants through the Rural Energy for America Program. REAP, which was established by the 2008 Farm Bill and reauthorized by the 2014 Farm Bill, is designed to help agricultural producers and rural small businesses reduce energy costs and consumption.

The REAP program provides grants and loans to help rural small business owners, farmers and ranchers make energy efficiency improvements and install renewable energy systems. During the call, Agricultural Secretary Tom Vilsack explained $80 million is available in grant funding, along with $200 million for loans. Grants can finance up to 25 percent of an energy efficiency or renewable energy project, with a $250,000 limit set for energy efficiency grants and a $500,000 limit for renewable energy system grants. Grants can also be combined with REAP loan guarantees, which can support up to 75 percent of project costs, with a cap of $25 million.

Eligible renewable energy projects must incorporate commercially available technology. This includes renewable energy from wind, solar, ocean, small hydropower, hydrogen, geothermal and renewable biomass (including anaerobic digesters). 

"Developing renewable energy presents an enormous economic opportunity for rural America," Vilsack said. "The funding we are making available will help farmers, ranchers, business owners, tribal organizations and other entities incorporate renewable energy and energy efficiency technology into their operations. Doing so can help a business reduce energy use and costs while improving its bottom line. While saving producers money and creating jobs, these investments reduce dependence on foreign oil and cut carbon pollution as well."

During the call, Vilsack highlighted several improvements that have been made regarding the way USDA administers the REAP program to make it more user friendly. “The application process is easier to understand,” he said, adding that loan applications are now accepted on an ongoing basis year round. Grant applications, however, are still subject to specific application periods. In addition, Vilsack pointed out that the passage of a new Farm Bill last year means that the REAP program now has a stable and secure source of funding. In the past, he said program funding was subject to the appropriations process. That means priorities could change from year to year. The 2014 Farm Bill, however, provides stable funding for the program for the next several years.

Since 2009, Vilsack said the REAP program has funded more than 8,800 projects, utilizing $545 million in grants and loans. Of those 8,800 projects, 2,900 have been renewable energy systems that have helped generate nearly 6 billion kWh of renewable energy. That’s enough electricity to power approximately 5.5 million homes annually, Vilsack added.

The call also featured statements from two people who have used the REAP program to make energy efficiency and renewable energy improvements to their rural small businesses. Jennifer Womble, owner of James’ Supersave Foods in Arkansas, spoke about her experience with the REAP program. In June 2011, her grocery store was robbed and set on fire. During the rebuilding process, Womble applied for a REAP grant to make energy efficiency improvements to the store, and was eventually awarded a $137,409 grant that helped support the addition of a more energy efficient roof, better lighting and new windows. The result was a 32 percent reduction in electricity and gas bills.

Jeffrey Marstaller, owner of Cozy Acres Greenhouse in Maine, spoke about his experience in applying for a grant to support the installation of a renewable energy system in a new greenhouse his company build in 2012. Greenhouses are traditionally heated by burning of fuels, however, Marstaller’s new zero-emissions greenhouse is powered and heated by a 30 kW photovoltaic system and a 10-ton geothermal system. According to Marstaller, the grant covered 25 percent of the energy proportion of the project. The whole greenhouse project cost around $200,000. Marstaller said that without the nearly $50,000 REAP grant, his company could not have proceeded with the project.

The new REAP funding opportunity was first announced by USDA in recent Federal Register notice, which Biomass Magazine reported on last month. Additional information on the funding opportunity can be found on the Federal Register website