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:

  • Purchase and installation of equipment;

  • Construction or improvements;

  • Energy audits;

  • Permit fees;

  • Professional service fees;

  • Feasibility studies;

  • Business plans; and

  • Retrofitting.

Ineligible Grant Uses

  • Land acquisition;

  • Capital leases;

  • Working capital;

  • Residential improvements;

  • Agricultural tillage equipment;

  • Vehicles;

  • Preparation of the grant application;

  • Waste collection;

  • Funding of political or lobbying activities;

  • Operating, maintaining, routine repairs, or fuel costs for  biogas or biomass renewable energy projects;

  • Production, collection, and transportation of energy inputs;

  • 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

  • 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 Links