What is the Rural Energy for America Program (REAP)? 

The Inflation Reduction Act provided many incentives for clean energy adoption across the United States. Included in the legislation was a major boost to the already existing Rural Energy for America Program (also known as REAP). REAP helps agricultural producers and rural small businesses make energy efficiency improvements and renewable energy investments to reduce their energy burden and generate their own clean energy, all while decreasing their environmental footprint.  

In the free Rural Energy for America Program (REAP) for Solar Companies course, the knowledgeable team from Solar United Neighbors provide a comprehensive overview of the program and how to apply. In this excerpt from the course, we learn exactly what REAP is and what it covers. 

Be sure to enroll in their free, short Rural Energy for America Program (REAP) for Solar Companies course to learn more!

So let’s go ahead and get into what REAP is and also how it might help your customers. 

REAP stands for the Rural Energy for America Program. REAP is a federally funded grant and loan program, and it offers farmers and rural business owners access to renewable and energy efficient technologies.  REAP was first established in 2002 as part of the Federal Farm Bill, and it’s administered by the U.S. Department of Agriculture, or USDA’s Office of Rural Development (or RD). 

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Now that you know all the acronyms, there are two main programs under the REAP umbrella. First, there’s a REAP Loan Guarantee Program, which can cover up to 75% of total eligible project costs with federal loan guarantees. Then there’s also a REAP Grant Program, which is the focus of this presentation, and REAP grants can cover up to 50% of total eligible project costs. 

REAP can help fund many different types of energy projects. Eligible technologies include a wide variety of renewable energy systems – everything from biomass to solar generation systems of large and small sizes. It also helps support energy efficiency improvements.

From here on out, Cory and I are just going to cover how this application looks for solar projects specifically, but keep in mind that the process is largely the same for any project type. 

REAP solar grants and REAP grants in general have always been in pretty high demand. Historically, this has been a very oversubscribed program, meaning that the program budget was nowhere near big enough to actually fund every project that applied. 

But thanks to the passage of the Inflation Reduction Act, or IRA, last year, the program is now seeing a really unprecedented level of investment, and that means that there’s a lot more REAP funding to go around moving forward. Specifically, the IRA invested 1.7 billion dollars of new funding into REAP spread out over the next 10 years. The IRA also lifted the limits on how large of a grant any one project can receive.

So the maximum grant size used to be set at 25% of a project’s total costs, and that was capped at no more than $500,000 for renewable energy systems.  Now that maximum grant size has been lifted to 50% of total project costs, and the cap has also been lifted now to a million dollars for renewable energy systems. 

One important small print note here is that the new 50% maximum grant size only applies to technologies that don’t emit greenhouse gasses on site, like solar. If we’re talking about a different technology that does emit greenhouse gasses, the limit is still 25% of project costs.