Rural solar users may have an easier time accessing funding through the United States Department of Agriculture (USDA) in 2015. The highly popular Rural Energy for America Program (REAP) is a part of the Energy Title of the 2014 Farm Bill. REAP provides grants and loans to farmers and rural small businesses to help 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 agricultural producers and rural small businesses.
Over 4,000 grants have been awarded since the programs inception on 2002. At the end of 2014, Secretary of Agriculture Tom Vilsack reported that the 2015 grants and loans will total $68 million dollars; For energy efficiency projects, the minimum grant amount is $1,500 and the maximum grant amount is $250,000. For renewable energy systems, the minimum grant amount is $2,500 and the maximum grant amount is $500,000. No grant can exceed 25% of total project or study cost. The remaining 75% must come from non-federal sources including loans, investors, your own assets or any available state or local grant. “These loan guarantees and grants will have far-reaching impacts nationwide, particularly in the rural communities where these projects are located,” says Secretary Vilsack, who issued the statement while visiting North Carolina, where a number of solar projects were funded last year.
One successful REAP grant recipient last year was Burris Pecan Farm near Belen, New Mexico. The owners used to wait until night to irrigate their trees, when electricity was cheaper. With help from a $107,100 REAP grant, they installed a 564-panel solar array to offset the power used by the irrigation system. They hope to break even on the $428,402 investment within about four years and to save at least $25,000 each year moving forward.
ELPC reports that With the release of the final rule, the USDA has significantly overhauled REAP. One huge barrier to farmer-owned small solar arrays has been the requirement to have separate meters for the house and the farming operation. In the case of many small farms, the house is an integral part of the business and the installation of a 2nd meter can exceed the amount of the actual grant. The USDA have relaxed this requirement a bit by allowing applicants to certify that 51% or more of the power generated will be used by the agricultural operation or rural small business. Alternatively, the applicant can certify that any excess power will be sold back to the grid and not used for residential purposes.
More changes are discussed in a recent article at ELPC’s website, farmenergy.org:
The core program remains unchanged but a number of significant modifications should clarify and simplify the program. Following are key changes from the final rule, as provided by the USDA:
Outlines a three tier application structure for REAP based on total project costs. Application requirements under all three tiers have been streamlined to reduce the time required to prepare applications, with application complexity decreasing with decreasing project costs:
total project costs of $80,000 or less,
total project costs more than $80,000 but less than $200,000, or
total project costs of $200,000 and greater.
Determination of “technical merit” has been simplified and is now part of the eligibility criteria rather than the scoring criteria. So the question has been reduced to “Pass/Fail,” to increase efficiency in application preparation and processing.
Grant applications of $20,000 or less will compete in 5 competitions. (Congress required that 20% of funding should be used for small grants of $20,000 or less.)
Eligibility for precommercial technologies has been removed. Only commercially available technologies are considered eligible.
The definition of commercially available technologies now applies to certification standards that are acceptable to the Agency from a recognized industry organization such as the Small Wind Certification Council.
Refurbished equipment is still allowed but must be refurbished in a “commercial facility” and must come with a warranty approved by USDA.
Establishes permanent annual grant deadlines of April 30th and October 31st for renewable energy system and energy efficiency applications for state-level competitions for small grants ($20,000 and less). These deadlines will no longer be dependent up on the annual notice, but there will be other deadlines for other program elements.
Establishes a grant deadline of January 30th for Energy Audit and Renewable Energy Development Assistance Grants (EA/REDA), or 45 days after publication of the funding notice. These awards must be made by April 1.
Resource Conservation Districts (RC&D) councils have been added as eligible applicants for EA/REDA.
The “small business” definition has been broadened to be more in line with regulations from the Small Business Administration (SBA), specifically the 7A and the SBA 504 programs, as found in 13 CFR 121.301(a) and (b).
The definition will allow applicants to use either net income and/or net worth in determining business size.
Following changes in the 2014 Farm Bill, the following projects are no longer eligible to receive REAP grant or loan guarantee funding:
Stand-alone feasibility studies. Eligible costs for feasibility studies can still be covered as part of a constructed project.
Flexible fuel pumps or any other technology for dispensing energy at retail.
Application scoring criteria were changed in a number of ways and is described in the rule in §4280.120. Total possible points are now 100. This section is complex and applicants should review the rule for further details.
Environmental benefits are now a total of five points, based upon addressing resource conservation (e.g., water, soil, forest), public health and the environment (e.g., compliance with EPA’s renewable fuel standard(s), greenhouse gases).
Energy generated, replaced, or saved is worth 25 points. Changes include evaluating projects by BTU saved or generated per dollar of REAP grant.
Commitment of funds is worth a total of 20 points, based upon the percentage of funds that have a written commitment.
Size of Agricultural Producer or Rural Small Business is worth a total of 10 points, based a sliding scale of the actual size compared to the maximum allowable size.
Previous grantees and borrowers allows a maximum of 15 points for those who have not previously received a REAP award and declining based upon when the previous award was received.
Simple payback calculations allow a maximum of 15 points.
State Director and Administrator priority points provide a maximum of 10 points for factors such as technological and geographic diversity, economically distressed areas or policy priorities.