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Introduction
The purpose of the Renewable Energy Systems and Energy Efficiency
Improvements Program (REEEP)
was established pursuant to enactment of the Farm Security and Rural
Investment Act of 2002 to make direct and guaranteed loans and
grants to agricultural producers and rural small businesses to
purchase renewable energy systems and make energy efficiency
improvements. The program is designed to help agricultural
producers and rural small businesses reduce energy costs and
consumption and help meet the nation’s critical energy needs.
Currently both a grant program and a guaranteed loan program are
being funded. Regulations for this program are
Rural Development
(RD) Instruction 4280-B.
Who Is Eligible?
An applicant must be an agricultural producer or rural small
business. Individual applicants must be citizens of the United
States (U.S.) or reside in the U.S. after being legally admitted for
permanent residence. Entities must be at least 51% owned,
directly or indirectly, by individuals who are either citizens of
the U.S. or reside in the U.S. after being legally admitted for
permanent residence. The applicant must also have demonstrated
financial need. In the case of an applicant that is applying as a
rural small business, the project to be funded must be in a rural
area.
Applicants for grant funds must demonstrate that they are unable to
finance the project from its own and commercially available
resources without grant assistance, or that the project proposed by
the applicant cannot achieve the income and cash flow to sustain it
financially over the long term without grant assistance.
How May Funds Be Used?
Grant funds may be used to pay up to 25% of the eligible
project costs. Therefore, the applicant must provide at least 75% of leveraged funds to complete the project. Leveraged funds
will be verified from information provided in the application.
In-kind contributions and other Federal grants may not be used to
meet the 75% requirement.
Guaranteed loan funds may be used to pay up to 50% of the
eligible project cost. Guaranteed loan funds may be used in
conjunction with grant funds for a particular project. The
applicant for a guaranteed loan will be an approved lender.
The proposed project must be for the purchase of a renewable energy
system, or to make energy efficiency improvements, and be located in a
rural area. The applicant must be the owner of the system and
control the operation of the proposed project. A third-party
operator may be used to manage the operation or proposed project.
Funds are not for research and development; therefore, they will
only be used for commercial or pre-commercial technology.
Eligible Grant Uses
REEEP funds may be used for the following as part of an eligible
project:
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Purchase and installation of equipment;
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Construction or improvements;
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Energy audits;
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Permit fees;
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Professional service fees;
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Feasibility studies;
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Business plans; and
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Retrofitting.
Ineligible Grant Uses
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Land acquisition;
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Capital leases;
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Working capital;
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Residential improvements;
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Agricultural tillage equipment;
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Vehicles;
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Preparation of the grant application;
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Waste collection;
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Funding of political or lobbying activities;
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Operating, maintaining, routine repairs, or fuel costs for biogas
or biomass renewable energy projects;
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Production, collection, and transportation of energy inputs;
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Construction of a new facility except when the new 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 the items identified in the energy audit of
the existing facility will be eligible for funding (pertains to
energy efficiency projects only); and
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Costs paid prior to an application being received by
RD except for predevelopment costs such as energy audits,
feasibility studies, business plans, permit fees, or architectural
and engineering fees.
Technical Report Requirements
Applicants must submit a technical report in conjunction with their
application. The information required in the technical report is
dependent upon the eligible project cost and the type of renewable
energy technology or energy efficiency program to be employed.
Technical report requirements for projects with total eligible
project costs of $200,000 or less can be found in Appendix A of
RD Instruction 4280-B. Technical report requirements
for projects with total eligible project costs greater than $200,000
can be found in Appendix B of the same instruction.
Renewable
Energy System and Energy Efficiency
Improvements
(REEEP) Program
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