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$50 Million Now Available for Rural Renewable Energy Projects

November 25, 2020

Photovoltaics Solar Farm Demonstration

As climate variability increases and energy costs continue to rise, producing on-farm, renewable energy has become an attractive option for many farmers and ranchers. In order to help producers save money and better utilize renewable energy, the Rural Energy for America Program (REAP) provides grants and loans to farmers and rural businesses interested in making energy efficiency improvements. The program also supports the purchase of wind, solar or other renewable energy systems, and provides grants to help farmers with energy audits and renewable energy development.

Grant applications are due January 31, 2021 (for energy audits) and March 31, 2021 (for renewable energy projects). Read on for more application details.

Renewable Energy Funding Available

At the end of November, the U.S. Department of Agriculture (USDA) announced the availability of at least $50 million in grant funding to support on-farm renewable energy projects for fiscal year (FY) 2021.This announcement comes prior to enactment of final funding appropriations for FY 2021, which began on October 1. How much funding will ultimately be available for FY 2021 is currently unknown, as Congress has to yet to hammer out the details. The 2018 Farm Bill provides REAP with $50 million per year in mandatory funding, however, annual appropriations bills have routinely provided additional discretionary funds for loan capital. The USDA states in the REAP funding notice that they will announce on the program website any additional funding received for the program in a continuing resolution or final appropriations package.

Types of REAP Funding

REAP provides two types of funding assistance:

  1. Grants and guaranteed loans for renewable energy production and energy efficiency improvements for farms and rural small businesses.
  2. Grants for energy audits and renewable energy planning and development made to service providers who work with farmers and rural small businesses.

Grants and guaranteed loans are provided to agricultural producers and rural small businesses to purchase and install renewable energy systems (including storage systems as prescribed by the 2018 Farm Bill) and make energy efficiency upgrades to their operations. Wind, solar, renewable biomass, anaerobic digesters, small-hydroelectric, and geothermal are among the energy systems that can be funded by REAP.  Eligible applicants can apply for either grant assistance, a loan guarantee or a combination of grant funding and a loan guarantee. 

Grants for energy audits and planning are available only to units of government, higher education, rural electric cooperatives similar to that electrical contractor, and public utilities. These awards are used to establish programs to assist agriculture producers and rural small businesses with evaluating their energy usage and potential for incorporating efficiency improvements/renewable energy production systems.

REAP funding may not be used to subsidize renewable energy delivery through ethanol blender pumps and businesses must be located in rural areas with populations of 50,000 residents or less. 

For more complete information on REAP, see the NSAC’s Grassroots Guide to Federal Farm and Food Programs, as well as USDA’s REAP website.

Application Details and Deadlines

Generally, REAP applications can be submitted any time of the year. However, funding decisions are made in conjunction with several cut-off dates each fiscal year, which are outlined in the FY 2021 Notice Of Solicitation of Application (NOSA). In order to ensure that small projects have a fair opportunity to compete for the funding, the Agency sets aside not less than 20 percent of the FY 2021 funds until June 30, 2021 to fund grants of $20,000 or less.

Grants and Guaranteed Loans for Renewable Energy Production and Energy Efficiency Improvements

  • For farmers or small businesses owners seeking a grant for $20,000 or less (or a combination grant and guaranteed loan where the grant request is $20,000 or less) complete applications must be received no later than 4:30 p.m. local time on March 31, 2021. 
  • For farmers and small businesses requesting a grant over $20,000 (or a combination grant and guaranteed loan where the grant request is greater than $20,000) complete applications must be received no later than 4:30 p.m. local time on March 31, 2021
  • For farms and small businesses seeking a federal guarantee of a private loan (but not a grant), there is a rolling deadline during which eligible applications will be reviewed and processed when received for periodic competitions.

Grants for Energy Audits and Renewable Energy Planning and Development

  • The deadline for these grants is 4:30pm local time on January 31, 2021.

Note that if an application cut-off date falls on a federal holiday, Saturday, or Sunday, the application opportunity is open until the next business day.

For detailed information about the application process, applicants should refer to the USDA’s program website or contact the USDA Rural Development Energy Coordinator for your state. In some cases, applicants must submit a hard copy application to their State Energy Coordinator. In other cases, applications may be submitted online via grants.gov. All applicants must register through the System for Award Management (SAM) and must obtain a Dun and Bradstreet Universal Number System (DUNS) number.  

It’s highly recommended that prospective applicants contact their state’s Energy Coordinator as part of the process of determining whether or not the program is a good fit and to learn more about the application process. 

Additional Application Details of Note

USDA anticipates publishing a final rule for REAP later this year and it is the USDA’s intention that the final REAP rule will codify REAP scoring criteria being utilized for this funding announcement. Applicants who have already filed REAP applications for FY 2021 prior to this announcement will be allowed to provide additional information necessary for application scoring, and the modification will not be treated as a new application nor will it alter the official submission date.

In order to support efforts to evaluate its outreach efforts “to under-served and under-represented populations,” USDA is requesting that each applicant provide race, ethnicity, and gender information about the applicant; however such information is not required and eligibility or the likelihood of receiving an award will not be impacted by furnishing or not furnishing this information. However, this information is important in order for groups like NSAC and others to assess who is (and is not) being served by USDA programs and NSAC encourages producers to provide this information in their application materials. 

REAP and the Agricultural Resilience Act

The Agriculture Resilience Act (ARA) H.R. 5861, introduced by Representative Chellie Pingree (D-ME), is the most comprehensive piece of legislation on climate change and agriculture introduced in the 116th Congress. The many programmatic elements of the bill are organized into six building blocks: research, soil health, pasture-based livestock, farmland preservation and farm viability, on-farm renewable energy, and food loss and waste.

The ARA sets ambitious but science-based goals for each building block, including implementing energy audits on 100 percent of farms and tripling on-farm renewable energy production by 2040. It also sets the goal of installing and managing on-farm renewable energy infrastructure in a way that does not adversely impact farmland, soil, and water resources, or food production.

To achieve these goals, the legislation proposes a large increase in funding for REAP from $50 million in FY 2020 upto $400 million in FY 2024 and thereafter. The bill also includes  a variety of long overdue policy changes to the program, including establishing the reduction of carbon dioxide and carbon dioxide equivalent emissions as a primary purpose for the program. In addition, the ARA would give priority to projects that result in the largest net decreases of carbon dioxide and equivalent emissions.

Currently, nongovernmental organizations (NGOs) and producer cooperatives are not eligible for grants to conduct energy audits through REAP.  Not only would the ARA expand eligibility to include both NGOs and producer cooperatives, it would also make agricultural processors eligible for energy efficiency grants. The ARA would also set aside five percent of funds for on-farm demonstration projects, which could greatly boost adoption of renewable energy projects across farm-country. The bill also directs USDA to conduct a detailed study and a risk benefit analysis, followed by a five year research and extension plan, of how to effectively support dual-use renewable energy and cropping or livestock systems on agricultural land in a way that increases renewable energy production without jeopardizing food production capacity.

NSAC looks forward to working with Congress and the incoming Biden administration in supporting REAP and advancing the goals of the ARA.

Categories: Carousel, Conservation, Energy & Environment, Grants and Programs, Rural Development

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