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GRANTS & LOANS FOR RENEWABLE ENERGY AND
ENERGY EFFICIENCY PROJECTS
Ron Omann, State Energy Coordinator - Minnesota
June 18, 2015
USDA Rural Development’s REAP Program
• 2 Programs
• 2 Types of Funding
• 2 Energy Sectors
• 2 Types of Applicants
REAP Renewable Energy Systems and
Energy Efficiency Improvement
Renewable Energy Systems
Energy Efficiency Improvements
Minimum Grant Request
$2,500 Total eligible project costs > $10,000
Minimum Grant Request
$1,500 Total eligible project costs > $6,000
Maximum Grant Request
$500,000 Total eligible project costs > $2 million
Maximum Grant Request
$250,000 Total eligible project costs > $1 million
GRANT = Up to 25%
of Eligible Project Costs
REAP Renewable Energy Systems and
Energy Efficiency Improvement
Minimum Loan Amount
$5,000 Total eligible project costs > $6,667
Maximum Loan Amount
$25 million Total eligible project costs > $33.4 million
Details
• USDA guarantees a commercial loan; applicant must have a willing lender.
• Terms are negotiated between the lender and borrower.
• Fees, appraisals, equity & collateral requirements apply.
GUARANTEED LOAN = Up to 75%
of Eligible Project Costs
Rural Business-Cooperative Service
Energy Programs
USDA Rural Development - the leading advocate for rural America at the federal level.
GUARANTEE
• 85% for loans $600,000 or
less.
• 80% for loans over
$600,000 up to $5 Million
• 70% for loans over $5
Million up to $10 Million
• 60% for loans over $10
Million
Eligible Applicants
Agricultural Producer
Rural Small Business
• Individual or entity that receives 51 percent or more of their gross income from agricultural production – crops, livestock, aquaculture,
forestry operations, nurseries, dairies
• For-profit small business - as defined
by the Small Business Administration (SBA)
• Rural area or non-metro community of < 50,000
Energy Efficiency Renewable Energy
Lighting Solar
Heating Wind
Cooling Small Hydroelectric
Ventilation Anaerobic Digesters
Fans Biomass
Automated Controls Geothermal
Insulation Wave/Ocean Power
Improve Profits for Your Rural Small Business,
Farm or Ranch with REAP
The technology must be commercially available. Research and development projects do not qualify.
Eligible Project Costs Ineligible Project Costs
• Equipment: • Purchase & installation • New or refurbished
• Post-application construction & facility improvements
• Retrofitting
• Professional service fees
• Permits & license fees
• Second Meter
• Working capital, land acquisition, (Guarantee loan ONLY with restrictions)
• Refinancing Debt (Guarantee Loan ONLY; <50% of Total Project Cost)
• Residential energy projects • Equipment:
• Farm tillage equipment • Used equipment • Vehicles
• Pre-application construction & facility improvements
• Application preparation or grant writer fees
• Line of credit
• Lease payments
• Payment to the applicant/business owner, beneficiary, or relative
REAP Application Window Closing Deadlines
June 30, 2015
Grant Request $20,000 or less not competing for set aside
Grant Request > $20,000
Combination Grant/Loan Request
October 31, 2015 Grant Request $20,000 or less Combination Grant/Loan Request
April 30, 2016
Grant Request $20,000 or less not competing for set aside
Grant Request > $20,000
Combination Grant/Loan Request
Continuous Application Cycle
Guaranteed Loans *Loan must score a minimum of 50 to compete monthly *Monthly competitions have now started – next May 1, 2015
Application Process
• Application requirements under all three tiers have been streamlined reducing the time required to prepare applications
Form RD 4280-3A
Form RD 4280-3B
Form RD 4280-3C
• Contact the USDA Rural Development in your state or region for application materials and resources
• Submit applications any time of year.
• Applications compete for funding based on score.
How to Apply
REAP Funding Availability
• 2015: $80M in Grant; $200M in Guaranteed Loans
• 2016 & Beyond:
– $50 M appropriated • $40 M Grant
• $10 M Loan (Budget Authority)
– Discretionary Funds are possible
Btu/Grant Dollar Requested (10)
Matching Funds (20)
Energy Saved, Replaced, Generated (15)
Previous Award (15)
Simple Payback (15)
State Direct/Administrator (10)
SCORING PROJECTS
Environmental Benefits (5)
8 Criteria = 100 points: Size of Applicant (10)
Using Scoring to Determine Funding Potential
High Scoring Projects Include:
• High Percentage of Saving/Replacement of Current Energy Usage
• Large energy saving/generation
per Grant dollar
• Short Simple Payback Timeframe
High Scoring Applicants Include:
• Small Size of Operation
• Under represented/Unserved Groups
Applicant & Scoring Trends
• Agriculture Producers
– Low threshold for size ($750,000)
– Look for other industries (NAICS) which may fit
Project & Scoring Trends
– Lighting Projects (High % Saving & Energy saved/grant, low paybacks)
– Grain Drying Equipment (Mid-Energy saved/grant & % Saved, High paybacks)
– Solar (Low energy/grant, High Replacement, Less 25yr payback)
– Wind (Low energy/grant, High replacement, Less 25yr payback)
– Geothermal (Low energy/grant, Low replacement, Better Payback than wind & solar
REAP Energy Audit and Renewable Energy
Development Assistance
mncerts.org/GreatRenewables
Mission: We connect individuals and their communities to the resources they need to identify and implement community-based clean energy projects
CERTs: Minnesotans Building a Clean Energy Future
Rural Energy for America Program (REAP)
www.rd.usda.gov/reap
Ron Omann, Minnesota Energy Coordinator
ron.omann@mn.usda.gov
651-602-7796
USDA is an equal opportunity provider and employer. To file a complaint of discrimination, write: USDA, Office of the Assistant Secretary for Civil
Rights, Office of Adjudication, 1400 Independence Ave., S.W., Washington, DC 20250-9410 or call (866) 632-9992 (Toll-free Customer Service), (800) 877-8339 (Local or Federal relay), (866) 377-8642 (Relay
voice users).
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