USDA funds energy projects

Thursday, September 8, 2011

Businesses are taking advantage of incentives to reduce their consumption of energy from the utility grid through both energy conservation and distributed renewable generation.  A number of programs provide grant funding for part or all of these projects, on top of other incentives like tax benefits.

The U.S. Department of Agriculture runs several energy incentive programs under the Rural Energy for America Program (REAP).  These programs take different shapes; some offer payments or grants, while others offer loans and loan guarantees.  All are designed to promote the development and commercialization of renewable energy sources including wind, solar, geothermal, hydrogen, ocean waves, hydroelectric, biomass, and biofuel (ethanol, biodiesel, etc.)

REAP’s Renewable Energy Systems/Energy Efficiency Improvement grant program is one funding source for farm and commercial projects.  REAP conducts periodic solicitations for project proposals, and awards grants on a competitive basis.  Grant winners can receive up to 25% of their total eligible project costs, capped at $500,000 per project for renewable energy systems and $250,000 per project for energy efficiency improvements. 

When USDA published its Notice of Funds Availability for REAP this spring, an estimated $70 million in REAP funding was expected this year, based on the allocations in the 2008 Farm Bill.  In response to the request for applications, projects were proposed and selected in every state.
In August 2011, the USDA announced $183,339 in grant funding for 8 Maine projects.  Most of these grant awards were for solar energy projects; two projects included solar and energy efficiency, while one focused on a biomass project.  For example, the Bancroft Contracting Corporation in South Paris won $40,000, split between a rooftop solar array expected to produce 270,050 kilowatt-hours per year and energy efficiency improvements.

USDA’s REAP program is one tool businesses can use to help finance innovative and cost-effective energy efficiency and renewable energy projects.

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