Rural Energy for America Program (REAP) Eligibility Requirements


The Rural Energy for American Program, otherwise known as REAP helps farmers afford energy efficient improvements. These improvements can be to any non-residential buildings on your land. The changes included in the program must help decrease the energy usage on the land. The program helps fund the changes, installation, construction, and energy audits to reduce energy consumption.

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Who is Eligible?

REAP is a grant and/or guaranteed loan program for rural businesses, including agriculture businesses that make a minimum of 50% of their income from agriculture. In order to be eligible, the business must be located in a rural area, otherwise known as areas outside of the city limits that have less than 50,000 residents. Agricultural applicants, however, can operate in a rural or non-rural setting.

In addition, any businesses applying for the grant or loan must prove they can afford the upkeep and operations of the facility during the work and grant period.

What Work can be Done?

The money from the grant or loan can be used for many different renewable energy source systems. This includes buying, constructing, or installing the system. A few examples include:

  • Geothermal systems
  • Hydropower
  • Wind generation
  • Solar energy
  • Ocean generation

Businesses can also use the funds to make energy efficiency changes to the heating and air conditioning systems; electric systems; doors and windows; and irrigation systems.

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How Much Can you Receive?

REAP offers both grant and guaranteed loan programs. Those who receive grant money may receive up to 25% of the cost of the project. Grants do not have to be repaid.

You may also receive a loan for up to 75% of the total cost of the renewable energy project. If you receive both a grant and a guaranteed loan, the total cannot exceed 75% of the total cost of the project.

Borrowers can request between $5,000 and $25 million as a loan. The USDA guarantees 85% of the loan amount for the lender. What you will do with the money determines how long you can borrow it:

  • Real estate purchase/improvement – 30 years
  • Machinery and equipment purchase/improvement – 15 years
  • Any loans strictly for capital – 7 years

Grants have different terms:

  • You can receive between $2,500 and $500,000 grants for renewable energy systems
  • You can receive between $1,500 and $250,000 for energy efficiency changes

If you do not apply for a loan and just the grant, you must be able to prove that you can supply 75% of the cost of the project with your own capital. If you apply for both the loan and the grant, you must prove that you can provide 25% of the cost of the project with your own capital. Any energy efficiency changes you propose will require an energy audit to make sure they are worth the cost.

If you are interested in REAP, you must contact the local USDA branch in your area. They will walk you through the application process for this help with renewable energy sources.

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