USDA Rural Energy For America Program Helps Lower Your Energy Costs

By Dr. Carrie Castille, Louisiana Director, USDA Rural Development

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USDA is committed to keeping pace with the needs and progress of agriculture producers by supporting new markets and opportunities. With rising energy costs, it is important that agricultural producers seek ways to reduce operating costs to become energy efficient and profitable to help create rural prosperity. The Rural Energy for America Program (REAP) provides grants and loans to farmers for energy efficiency improvements, other renewable energy systems, and provide grants to help farmers with energy audits and renewable energy development.

Agricultural producers can apply for REAP loan guarantees and grants to help pay for energy efficiency projects – including switching from a diesel to electric irrigation motor, improving electrical systems, heating and cooling or refrigeration units, replacing ventilation systems, doors and windows, insulation, pumps, and drive devices with more efficient processes and equipment. Energy efficiency projects reduce energy consumption and result in savings for the agricultural producer.

A producer can apply for a loan guarantee of up to $25 million and a grant of up to $500,000. The total grant cannot exceed 25 percent of the total project costs. A combined loan guarantee and grant cannot exceed 75 percent of the total project costs. Grants are limited to $500,000 for renewable energy systems and $250,000 for energy efficiency improvements.   

In addition to energy efficiency and renewable development projects, REAP funding is also available for energy audits and feasibility studies. The Energy Audit and Renewable Energy Development Assistance (REDA) Grant Program provides funds for grantees to help farmers, ranchers, and small businesses with energy audits and feasibility studies. This program helps promote American energy independence by increasing the private sector supply of renewable energy and decreasing the demand for energy through energy efficiency improvements.

For example, the University of Louisiana at Lafayette (ULL) received a REDA grant for $99,816 to conduct energy audits to help agricultural producers. With this grant, ULL plans to identify energy saving measures with the energy audit program to provide the client cost-effective energy saving measures, technical help to reduce energy demands, and lower energy cost for agriculture producers.

Last fiscal year, 24 businesses and or producers across Louisiana were awarded $589,183 in loans and grants through REAP funding for energy efficiency improvements and renewable energy systems. Producers and rural businesses have used REAP funding to replace irrigation motors, refrigeration units, and grain dryers, install solar panels, and make other energy efficiency upgrades.

REAP funding is an example of the many ways that USDA is helping revitalize rural economies to create opportunities for growth and prosperity, support innovative technologies, and discover new markets for agricultural producers. To find out more about how this grant and loan guarantee program can benefit your operation, contact me at carrie.castille@la.usda.govor(318) 473-7921, to let us know how we can help.