Rural Energy for America Program

Are you an agricultural producer or a rural small business in need of financing for renewable energy systems or energy efficiency improvements? West Texas Solar is here to help you access the funding you need through the Rural Energy for America Program (REAP). This program provides guaranteed loan financing and grant funding to support your sustainable energy projects.

Application Window and Period

The application window for the REAP program is currently open for Fiscal Years 2023 and 2024. To apply, make sure to submit your application within the following application windows:

June 30, 2023
September 30, 2023
December 31, 2023
March 31, 2024
June 30, 2024

September 30, 2024

Who can apply?

The REAP program welcomes applications from two main categories of applicants:

1. Agricultural Producers:

An entity directly engaged in the production of agricultural products, with at least 50 percent of their gross income coming from agricultural operations.

2. Small Businesses:

Must be located in eligible rural areas.
Can be a private for-profit entity (sole Proprietorship, Partnership, or Corporation), a Cooperative (including those qualified under Section 501(c)(12) of the IRS Code), an electric utility (including Tribal or governmental electric utilities) that serves rural consumers and operates independently, or a Tribal corporation or other Tribal business entities chartered under Section 17 of the Indian Reorganization Act.

It's important to note that both agricultural producers and small businesses must have no outstanding delinquent federal taxes, debt, judgment, or debarment.

Loan Guarantees and Eligibility

Eligible borrowers for loan guarantees include rural small businesses and agricultural producers. Individual borrowers must be U.S. citizens or legally admitted for permanent residence. Private-entity borrowers must demonstrate that the loan funds will remain in the U.S.

Eligible Areas

Projects must be located in rural areas with populations of 50,000 residents or less. Agricultural producers may submit projects to be located in non-rural areas as long as the project is associated with an on-site production operation.

The funds provided through the REAP program can be used for the purchase and installation of renewable energy systems and energy efficiency improvements, including but not limited to:

Renewable Energy Systems:

Biomass (biodiesel, ethanol, anaerobic digesters, and solid fuels)
Geothermal
Hydropower (below 30 megawatts)

Hydrogen
Small and large wind generation
Small and large solar generation
Ocean generation (tidal, current, thermal)

Energy Efficiency Improvements:

High-efficiency heating, ventilation, and air conditioning systems (HVAC)
Insulation
Lighting
Cooling or refrigeration units
Doors and windows

Electric, solar, or gravity pumps for sprinkler pivots
Switching from a diesel to electric irrigation motor
Replacement of energy-inefficient equipment

Agricultural producers may also use guaranteed loan funds to install energy-efficient equipment and systems for agricultural production or processing.

Usage of Funds

Funding Availability

The REAP program offers the following funding options:

Loan guarantees on loans up to 75 percent of total eligible project costs.
Grants for up to 50 percent of total eligible project costs.
Combined grant and loan guarantee funding up to 75 percent of total eligible project costs.

Please note that the maximum loan guarantee percentage and other details may vary and are published annually in a Federal Register notice.

Loan Guarantee Terms

The loan term for REAP guaranteed loans will be established and justified by the lender in agreement with the agency. The loan term will not exceed 40 years and will be based on factors such as the use of loan funds, the useful economic life of the assets being financed, and the borrower's repayment ability.

Interest Rates and Fees

The interest rates for REAP guaranteed loans are negotiated between the lender and borrower. Rates may be fixed or variable, with variable interest rates adjusted no more frequently than quarterly.

The applicable fees for the loan guarantee include an initial guarantee fee of 1 percent of the guaranteed amount and an annual guarantee retention fee of 0.25 percent of the outstanding principal balance. Additionally, loan origination fees are negotiated between the borrower and lender based on reasonable and customary practices.

Grant Terms

For renewable energy system grants, the minimum grant amount is $2,500, and the maximum grant amount is $1 million. For energy efficiency grants, the minimum grant amount is $1,500, and the maximum grant amount is $500,000.

Additional Requirements

Applicants must provide matching funds if applying for a grant only. The Federal grant share is limited to 50 percent for projects meeting specific criteria, including being a Renewable Energy System (RES) or Energy Efficiency Improvement (EEI) project. Projects proposed by eligible Tribal Corporations or other Tribal Business entities may also qualify for the 50 percent Federal grant share. All other projects are limited to a 25 percent Federal grant share.

Moreover, all projects must have technical merit, utilize commercially available technology, and undergo an environmental review prior to award or construction. Energy efficiency projects require an energy audit or assessment.

Getting Started

To begin the application process for the REAP program, you can submit your application at your local office. If you have any questions or need assistance, feel free to contact West Texas Solar.

Program Regulations

The REAP program is governed by the Code of Federal Regulation, 7 CFR Part 4280 for grants and 7 CFR 5001 for guaranteed loans. Please refer to these regulations for complete details. As program information may be subject to change, it's always recommended to consult the most up-to-date regulations or contact your local office for assistance.

USDA Rural Development's Mission

At West Texas Solar, we are proud to participate in the REAP program to support American energy independence. By increasing the private sector supply of renewable energy and promoting energy efficiency improvements, we contribute to lowering energy costs for small businesses and agricultural producers. Our aim is to help you access the funding and resources needed to make your sustainable energy projects a reality.

Please note that the information provided here is based on the available details of the Rural Energy for America Program as of the current date. For the most accurate and up-to-date information, please refer to the official program resources or contact our team for assistance.