Rural Energy for America Program -Renewable Energy System and Energy Efficiency Improvement Guaranteed Loan and Grant Program – Eligibility

Guaranteed Loan and grant eligibility is limited to rural small businesses and agricultural producers. An agricultural producer is an individual or entity directly engaged in the production of agricultural products (crops, livestock, forestry products, hydroponics, nursery, and aquaculture) whereby 50 percent + or greater of their gross income is derived from the operations.  A private entity is considered a small business in accordance with Small Business Administration’s Small Business Size Standards.

The lender must be eligible for the program. Most lenders are eligible, including Federal and State-chartered banks, Farm Credit System banks, and savings and loan associations. Other lenders may be eligible if approved by USDA.

For both loan guarantees and grants, project must meet the following conditions:

• The loan/grant must go towards the purchase of a renewable energy system or to make energy efficiency improvements
• The technology is pre-commercial or commercially available, and replicable
• The project must have technical merit, as specified in Rural Development Regulation 4280 subpart B
• A rural small business must be located in a rural area, though an agriculture producer may be located in a rural or non-rural area
• The applicant must be the owner of the project and control the revenues, expenses, operations, and maintenance of the project
• Sites must be controlled by the agricultural producer or small business for the financing term of any associated Federal loans or loan guarantees
• The project must have satisfactory sources of revenue, for the life of the project, that will be used for the operation, management, maintenance, and debt service of the project
  

Eligible project costs for Renewable Energy Systems and Energy Efficiency Improvements are:

• Post-application purchase and installation of equipment (new, refurbished, or remanufactured), except agricultural tillage equipment, used equipment, and vehicles
• Post-application construction or improvements, except residential
• Energy audits or assessments
• Permit and license fees
• Professional service fees, except for application preparation
• Feasibility studies and Technical Reports
• Business Plans and Retrofitting
• Construction of a new energy efficient facility only when: the facility is used for the same purpose; is approximately the same size; and, based on the energy audit, will provide more energy savings than improving an existing facility.  Only costs identified in the energy audit for energy efficiency improvements are allowed.  New  equipment as long as it is of similar size to the equipment being replaced
• Working capital (applicable for guaranteed loan only)
• Land acquisition (applicable for guaranteed loan only)