Rural Energy for America Program (REAP) FAQs

In the 2009 and 2010 grant cycles for REAP, 43 grants submitted by Resource Consultants, Inc. were funded. No other grant writer or business in the Northwest had a similar success rate. References and information on past projects are available upon request. REAP, or the Rural Energy for America Program (formerly known as "Section 9006" in the 2002 Farm Bill), is part of the Energy Title in the 2008 Farm Bill. Among other things, it provides grants and loan guarantees to farmers, ranchers and rural small businesses to help purchase renewable energy systems or make energy efficiency improvements.
 
The program is designed to assist farmers, ranchers and rural small businesses that are able to demonstrate financial need. All agricultural producers, including farmers and ranchers, who gain 50% or more of their gross income from the agricultural operations are eligible. Small businesses that are located in a rural area can also apply. Rural electric cooperatives may also be eligible to apply. For energy audits and renewable energy development assistance, eligible entities include a unit of state, tribal or local government; institutions of higher education; rural electric cooperatives; or a public power entity.
 
No. It is unknown when the NOFA (Notice of Funding Availibility) will be released. Please check back for details. 
In the 2008 Farm Bill, Congress increased funding for this program. The new "mandatory" funding starts at $55 million in 2009 and ramps up to $70 million in 2012. In addition, the Farm Bill provides for discretionary funding up to $25 million per year. The funding for 2011 is expected to be $60 million. 
 
A grant-guaranteed loan combination is an application in which the project is seeking both a grant and a loan guarantee. The amounts of each request can be different. The loan guarantee still needs to be submitted by your lender. However, USDA will evaluate the two applications together.
 
The guaranteed loan origination and annual fees are paid by the borrower to USDA to offset the upfront and ongoing costs of monitoring compliance with the terms of the guarantee.
 
Under last year's program, for energy efficiency projects, the minimum grant amount was $1,500 and the maximum grant amount was $250,000.
For renewable energy systems, the minimum grant amount was $2,500 and the maximum grant amount was $500,000. No person or entity can receive more than $750,000 from multiple projects. Grants from this program cannot exceed 25% of the total project cost. The remaining 75% must come from non-federal sources including loans, investors, your own assets or any available state or local grants.
 
Under the previous program, the minimum guaranteed loan was $5,000 and the maximum loan guarantee was $10 million. The 2008 Farm Bill increased the maximum loan guarantee to $25 million.
The current guaranteed loan can cover up to 50% of eligible project costs and up to 85% of the loan amount for loans under $600,000, declining to 70% for loans from $5-10 million. 
 
The program is open to agricultural producers and rural small businesses. To be eligible, you must be actively involved in the business and the proposed project. You must also show a "demonstrated financial need" for grant funding. Farmers must derive the majority of their income from farming. Small businesses must be classified as such through the Small Business Administration's standards. All applicants must be outside of the established Metropolitan Statistical Areas. To see if you qualify, contact info@resourceconsultants.org . 
 
The definition of "small business" is based on the Small Business Administration's criteria based on the type of business. To determine if your business qualifies, go here: SBA Size Standards. "Rural" means a community of fewer than 50,000 people not located within a larger metropolitan area. If you are unsure if your property is eligible, contact info@resourceconsultants.org . 
 
Energy Efficiency: Any projects that save energy (electricity, propane or natural gas, or diesel fuel) are eligible. Examples include dairy pumps and cooling systems, weatherization of poultry houses, efficient lighting and ventilation, irrigation equipment, industrial motors and supermarket refrigeration systems. Projects that save fuel used in mobile sources (tractors, trucks) are not eligible.
Renewable Energy: Renewable energy systems can include small and large wind turbines, active or passive solar energy systems, geothermal heating and cooling, anaerobic digesters using food or livestock waste, systems using or producing biomass fuels, or facilities producing ethanol or biodiesel. Under the 2008 Farm Bill, tidal, wave, ocean thermal and hydroelectric technologies are also included.
 
Under previous rules, for energy efficiency projects, grants could not be used for a new facility unless that facility is replacing an existing facility. The grant can be used only for identifiable energy efficiency improvements such as lighting, heating, refrigeration, motorized equipment or insulation. Grants can not support agricultural equipment or other vehicles. For renewable energy systems, only proven, commercially available and pre-commercial technology is eligible. Grants can not fund research and development activities.
 
This question is best answered by your accountant. Section 9006 grants, like other federal and state grants to private businesses, are considered taxable income in the year in which the funds are received. However, if you are depreciating your investment and lower the depreciable basis by the amount of the grant, then the grant is effectively not taxable.
 
REAP is a Federal program administered by the USDA and not dependent upon who provides your local energy source. This program targets rural America; the metropolitan centers of Portland, Salem, Eugene, Medford and Bend are excluded from this program. We can quickly verify your site address to determine if your location is eligible for funding. The federal determination on where rural begins and ends can be unpredictable at best and we recommend checking each site location. 

Is the grant guaranteed?

No. This grant, like any other, is a competitive process. Thousands of grants are submitted from all over the US. Our specialty is in writing the REAP grants in such a fashion to ensure everything has been done to make the application the best it can be. We can consult your business before beginning the grant writing process to make sure your business can take advantage of this opportunity. We will not write a grant that does not have a reasonable chance of being funded.

Do I have to live in Oregon to take advantage of the REAP grant?

No, the REAP is a nationwide program administered by the US Department of Agriculture, a federal entity. However, there are specific incentives and tax credits available to Oregon residents and you may contact us to find out about those. If you are outside of Oregon and are curious about local incentives, we can help with those as well or you can check out the DSIRE website . 
 
Unfortunately, this cost is not eligible for reimbursement. However, if you live in Oregon and are a customer of Pacific Power, Portland General Electric, Cascade Natural Gas or Northwest Natural, you may be eligible for the Project Development Assistance Incentive through the Energy Trust. This is a cost-share program designed specifically to help with grant writing costs.
 
We are happy to answer any questions you may have. Please contact us at info@resourceconsultants.org and we will respond, usually within 24 hours.