United States Department of Agriculture • Rural Development

1221 College Park Drive, Suite 200, Dover, DE  19904

Phone: (302) 857-3580 • Fax: (302) 857-3640 • TDD: (302) 857-3585 • Web: http://www.rurdev.usda.gov

February 7, 2006

By: Marlene B. Elliott, USDA Rural Development State Director

Energy prices have continued to rise at an aggressive rate and no one knows this better than the American farmer. If you are looking at alternative energy solutions for your farm or rural small business, then the Renewable Energy Systems and Energy Efficiency Improvements Program may provide the funds you’re looking for.

In support of President Bush’s comprehensive energy policy and to help ease the burden of energy costs, The Farm Security and Rural Investment Act of 2002, commonly referred to as the 2002 Farm Bill, established the Renewable Energy Systems and Energy Efficiency Improvements Program. The program is administered by USDA Rural Development and offers grants, guaranteed loans, and combination grant/guaranteed loans to help agricultural producers and rural small businesses to purchase and install renewable energy systems and make energy efficiency improvements.

This year, $200 million dollars is available nationwide in grants and guaranteed loans to help with alternative energy solutions. Eligible projects include systems that generate energy from wind, solar, biomass, or a geothermal source in addition to other conservation technologies. Projects must be able to show a savings of 15% or more in energy costs. Examples of energy projects can include converting from traditional propane heat to corn fired stoves, installation of an energy efficient grain drying bin, installation of wind turbines and projects that involve anaerobic digesters. Funds can be used for planning, working capital and land acquisition.

Since the beginning of this program there has been one grant recipient in the Delaware/Maryland area. Mid-Atlantic Biodiesel Company, located in Clayton, DE received a $500,000 grant to help with the construction of a facility that will manufacture an alternative fuel made from soybeans. We are encouraging farmers, cooperatives, and small businesses to look at this program. Grants are provided for no more than 25% of the project cost and can be a minimum of $1,500 or a maximum of $500,000. The farm or business must be located in an area with a population of 50,000 or less.

We anticipate there will be two funding cycles, currently the due date for submitting applications for the first round of funding is March 2, 2006 and the second round of applications are due June 5, 2006. It is possible that the application deadlines will be extended because the Notice of Funding Availability (NOFA) has not been finalized. Additional time for completion of the NOFA has been authorized this year to provide consideration for businesses located in hurricane stricken States. In the meantime, to help get interested applicants started, full details can be found at the following website: www.rurdev.usda.gov/rbs/farmbill/.

We understand that to remain profitable on the farm it requires affordable energy solutions. USDA Rural Development is committed to helping you through this process. In 2004 and 2005, this program provided over $22 million in grant funding nationwide for renewable energy and energy efficiency projects. We want to help return those federal taxpayer dollars home to you. If you have a question, or need help through the process, contact one of our Business and Community Program Specialists for Delaware and Maryland at (302) 857-3625. USDA Rural Development has over 40 programs to help improve the quality of life and increase economic opportunity in rural America. If this program doesn’t fit your project, it’s possible we have another one that will.

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 Washington, D.C. 20250-9410, or call (800) 795-3272 (voice), or (202) 720-6382 (TDD).