The USDA (United States Department of Agriculture) administers grants to rural communities that help to foster biomass projects.

The Food, Conservation, and Energy Act of 2008 converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program into the Rural Energy for America Program (REAP). Similar to its predecessor, REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of grants and loan guarantees for energy efficiency improvements and renewable energy systems, and grants for energy audits and renewable energy development assistance.

About 88% of REAP funding is devoted to competitive grants and loan guarantees for energy efficiency improvements and renewable energy systems. These incentives are available to agricultural producers and rural small businesses to purchase renewable energy systems (including systems that may be used to produce and sell electricity) and to make energy efficiency improvements.

Funding is also available to conduct relevant feasibility studies, with approximately 2% of total funding being available for feasibility studies.

Eligible renewable energy projects include wind, solar, biomass and geothermal; and hydrogen derived from biomass or water using wind, solar or geothermal energy sources.

These grants are limited to 25% of a proposed project’s cost, and a loan guarantee may not exceed $25 million. The combined amount of a grant and loan guarantee must be at least $5,000 (with the grant portion at least $1,500) and may not exceed 75% of the project’s cost.

In general, a minimum of 20% of the funds available for these incentives will be dedicated to grants of $20,000 or less.

Let’s hope that this program continues through future rounds of budget negotiations!

Contact information:

Public Information – RBS
U.S. Department of Agriculture
Rural Business – Cooperative Service
USDA/RBS, Room 5045-S, Mail Stop 3201
1400 Independence Avenue SW
Washington, DC 20250-3201
Phone: (202) 690-4730
Fax: (202) 690-4737
E-Mail: webmaster@rurdev.usda.gov
Web Site: http://www.rurdev.usda.gov/rb

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