October 28, 2015
On October 26, U.S. Department of Agriculture (USDA) Secretary Tom Vilsack announced 1,100 renewable energy and energy efficiency awards totaling nearly $173 million through the Rural Energy for America Program (REAP).
REAP provides grants and loans to farmers and businesses for energy efficiency improvements, purchase and development of renewable energy systems, and energy audits. According to Secretary Vilsack, the awards will provide “local benefits [to companies] saving energy costs and the global benefits of reducing carbon emissions” and will “create American jobs by supporting energy production and efficiency installations that are made in rural America.”
As in past years, loans guarantees, totaling $102 million, constituted the majority of this year’s awards. Another $71 million was distributed as grants. Awards covered projects in every state, the US Virgin Islands, the Western Pacific, and Puerto Rico. Like last year, North Carolina was the big winner at 66 awards, followed by Missouri (60) and New York (45).
Solar energy projects received the greatest number of awards (640), with energy efficiency and wind projects rounding out the top three at 404 and 30 awards, respectively. Many of these awards went to agricultural producers. For example, the owners of Parker Farms in Ripley, Tennessee received $45,000 to help offset the cost of a 50 kw solar system they installed last year. So far, the system has saved them $800 per month, over 70 percent of their annual electric costs.
A full list of this year’s award recipients can be found here.
Application Cut-off Dates
Agricultural producers and small business owners can apply for REAP grants and loan guarantees at any time, but application cutoff deadlines are announced for each fiscal year. For fiscal year (FY) 2016, cutoff dates are between November 2, 2015 and May 2, 2016. Eligible energy systems include solar, hydroelectric, solid fuel, wind, geothermal, anaerobic digesters, hybrid systems, and thermal conversion systems.
REAP vs. Gas Station Subsidies
On Wednesday, October 28, the USDA announced that it is providing $100 million to gas stations (via state departments of agriculture) for the installation of ethanol blender pumps. NSAC opposes this use of taxpayer dollars. Until the 2014 reauthorization of the Farm Bill, the gas station subsidy was a part of REAP and took funds away from farmers and other small business owners.
NSAC led an effort to remove this provision from REAP and Congress stripped it from the program in the 2014 Farm Bill. Instead, USDA is now skirting the farm bill by using broad general authority to spend money directly from the Commodity Credit Corporation. NSAC will continue to urge USDA to focus on supporting renewal energy generation and energy conservation projects on farms through programs like REAP.