INSIDE RURAL DEVELOPMENT
Renewable energy:
the new frontier
By Peter J.Thomas,Administrator
Business and Cooperative Programs
USDA Rural Development
ith record-high energy
prices this summer, it’s
no wonder that interest
in USDA’s Renewable
Energy and Energy
Efficiency grants and loan program is
soaring. Under this program, USDA
Rural Development has been allocated
$22.8 million to help farmers, ranchers
and small rural businesses promote
innovative renewable energy development
and energy efficiency projects.
Enhancing our energy diversity and
efficiency is a key goal of the Bush
Administration, and will provide an
opportunity to strengthen both our
national security and the rural economy.
USDA Rural Development is playing
a major role in helping to reach
this goal by funding a wide range of
technologies allowed under this program.
They include: bioenergy and
biomass (including anaerobic
digesters), geothermal, hydrogen, solar
and wind energy, as well as energy efficiency
improvements.
Agriculture Secretary Mike Johanns
calls renewable energy “an exciting
growth frontier for American agriculture”
as the nation strives forward in
implementing an innovative energy
policy, and I heartily agree.
The program, now in its third year,
was created by Section 9006 of the
2002 Farm Bill. About $11.5 million,
half the funds available, will soon be
awarded as competitive grants. By the
time the grant application
deadline ended earlier this
summer, we had received over 360
applications requesting more than $60
million – about double the number of
requests received the previous year.
These grant requests are being carefully
evaluated by teams of experts
from the Department of Energy and
our own Rural Development State
Offices who will eventually select the
most promising projects.
Renewable energy grant applications
may be made for a minimum of
$2,500 and a maximum of $500,000.
Energy efficiency grant applications
may range from $2,500 to $250,000.
The grant request may not exceed 25
percent of the eligible project cost.
If your grant request isn’t funded
this year, or if you are now contemplating
a new project, keep in mind
that applications for 2006 funds will be
accepted beginning October 1.
The process is highly competitive,
so the more time you spend developing
a solid project plan that shows a strong
likelihood of success and which will
benefit the rural economy in your area,
the better your chances of funding.
The second $11.5 million available
in FY 2005 for this program has been
reserved by USDA to support guaranteed
loans until August 31, 2005.
These funds can generate about $200
million in loan guarantees. As with
USDA Rural Development’s other
guaranteed loan programs, project
developers will work with a local
lender, who in turn can apply to
USDA Rural Development for a loan
guarantee. Any of the second $11.5
million not obligated to support loan
guarantees will be awarded as grants.
Loans may be for up to 50 percent
of the project’s cost, with a maximum
of $10 million per project.
Deadline for the agency to obligate
funds for a loan guarantee is Aug. 31,
2005. Rural Development can accept
FY 2006 applications beginning Oct. 1,
2005 for both loan guarantees and
grants. However, FY 2006 budgets and
funding are not yet available.
For more information on the
renewable energy and energy efficiency
program, please visit our Web site:
http://www.rurdev.usda.gov/rbs/far
mbill/index.html. Or, you can be connected
to your USDA Rural
Development state office by calling
(202) 720-4323 or via links from our
Internet home page: www.rurdev.gov.
To date, the Bush administration
has invested nearly $45 million in 32
states through this program.
It is very encouraging to see how
innovative our nation’s farmers, ranchers
and small business owners are in
adapting new technology in so many
ways to meet the nation’s energy
needs. The old saying, “where there’s
a will, there’s a way” certainly seems to
hold true on the new frontier of agrienergy.
Working with this program for
the past two years has strengthened my
belief that it’s not a matter of if, but a
matter of when and how our nation will
become energy self-sufficient once
again.
