The USDA Is Helping Rural Farmers Get Their Own Renewable Energy

The clean energy business has a potentially unexpected ally: the U.S. Department of Agriculture.

As part of the 2014 Farm Bill passed last year, the normally food-focused USDA is now offering farmers and rural small business owners financial assistance in installing clean energy systems and taking measures to improve energy efficiency. More than $280 million will be provided through the Rural Energy for America Program (REAP) in the form of grants and loans that can be used to install renewable energy sources such as solar panels, wind turbines, hydroelectric projects as well as improve heating and cooling efficiency and upgrading windows and insulation.

According to the USDA, the program is meant to help farmers, ranchers, business owners, tribal organizations, and other entities reduce their energy bills, limit the country’s dependence on foreign oil, support clean energy, and cut carbon pollution.

“Developing renewable energy presents an enormous economic opportunity for rural America,” said Agriculture Secretary Tom Vilsack while announcing the program last month.

The USDA is offering both grants and loans as part of the REAP initiative. Grants, which can total up to $500,000, are available for up to 25 percent of the total project cost. Loans, which can amount to as much as $25 million, are available for up to 75 percent of the total cost.

The full slate of renewable energy projects available for financing includes wind, solar, ocean, small hydropower, hydrogen, geothermal, and renewable biomass.

Originally created in the 2002 Farm Bill, the program was reauthorized in the 2014 Farm Bill with a guarantee of no less than $50 million in annual funding through 2019. Since 2009, REAP has awarded $545 million for more than 8,800 projects across the country – including $361 million in REAP grants and loans for more than 2,900 renewable energy systems. According to the USDA, when fully online these projects could generate enough electricity to power more than 5.5 million homes a year.

Trudy Kareus, Colorado State Director for USDA Rural Development, said the program is a “win/win for our customers and those whom they serve.”

She said the program has helped farmers purchase new irrigation pumps in order to reduce their energy costs as well as assisted a local restaurant in offsetting their energy costs by 85 percent by installing rooftop solar panels. By increasing both economic yield and business productivity, renewable energy and energy efficiency can become their own cash crops. Even small decreases in the cost of refrigeration or lighting can amount to significant improvements in profit margins.