How USDA Grants and Loans Can Fund an Energy Project | EnergyLink
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How USDA Grants and Loans Can Fund an Energy Project

How to fund an energy project with grants and loans

With our current economy, we understand small businesses are struggling. If money may be tight for your company, we want to help out. Our financial analysts can connect you with resources that can fund a portion of your desired renewable energy system. One of the most helpful resources for our clients is the grants and loans offered by the U.S Department of Agriculture (USDA) Rural Development Office. 

What is the Rural Energy for America Program? 

The Rural Energy for America Program (REAP), is the subset of the USDA that offers grants and loans to rural, small businesses and agriculture producers. It’s part of the Energy Title of the 2014 Farm Bill and its purpose is to help rural small businesses and agriculture producers purchase renewable energy systems, make energy efficiency improvements and perform renewable energy feasibility studies. It also funds an energy audit and technical assistance program to serve this specific group of businesses. 

How Much Do Grants and Loans Fund? 

The USDA REAP grant program provides grant funding to for-profit entities that qualify for up to 25% of the project cost. This program also provides loan guarantees for up to 75% of the project cost. Grants are awarded on a competitive basis, for differing amounts of the total system price, up to a maximum of 25%. It’s a great option, but there are some boundaries to keep in mind and they differ depending on which grant you’re applying to. Here are the two options and their constraints:

  • Renewable Energy Grant
    • Applies to projects in the $2,500-$500,000 thresholds.
  • Energy Efficiency Grant
    • Applies to projects in the $1,500-$250,000 thresholds.

So, what differentiates the grants? The difference is pretty easy — a renewable energy grant is to be used to fund renewable energy systems such as solar generation and the latter is for the purchase, installation, and construction of energy efficiency improvements. Different options that the energy efficiency grant covers include LED lighting and HVAC systems. For a list of all products that are funded under both grants click here. 

How to Qualify?

Now for the burning question — does your company qualify. Let’s go through a few guidelines to find out.

1. Type of Business 

As said before, agricultural producers with at least 50 percent of their gross income coming from agricultural operations and small businesses in eligible rural areas apply. 

2. Location

The location has an impact as well. Eligible businesses must be in an area other than a city or town with a population greater than 50,000 people. Agricultural producers may be in rural or non-rural areas. Learn more about if your company is eligible here. 

How to Apply? 

At EnergyLink, we know that the application process can be tedious. To alleviate the stress, our team of experts can apply for you — making your application stand out from the crowd. Contact us to start the process today. 

For More Information

At EnergyLink, we are committed to helping our clients find energy-saving solutions even in this challenging time. For more information on how to cut costs and how to finance an energy system upgrade during this time, contact us! To learn more about other financing options, click here.

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