U.S. government granting $1B to ag producers for renewable energy improvements

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U.S. government granting $1B to ag producers for renewable energy improvements

The USDA has announced that they are receiving applications for a $1 billion grant offered by the current administration to help agricultural producers and small rural businesses invest in renewable energy systems and make energy-efficiency improvements.

Applications started on April 1 and grants will be available under the Rural Energy for America Program (REAP), with funding from President Biden’s landmark Inflation Reduction Act, the nation’s largest-ever investment in combating the climate crisis, announced USDA Secretary Tom Vilsack. The USDA will hold competitions quarterly through Sept. 30, 2024.

Recipients may use REAP funds to install renewable energy systems or to make energy-efficiency improvements. Eligible applicants include rural small businesses and agricultural producers. 

The funding will also include the creation of the first underutilized technology fund in the REAP program, with $144.5 million available in dedicated funding.

“When we invest in rural communities, we are supporting hard work that sends a ripple effect across our country. Clean energy is critical to the future of our economy, and the Inflation Reduction Act provides the Biden-Harris Administration with the resources to build a more prosperous rural America while tackling the climate crisis and lowering energy costs,” said Vilsack. 

The maximum federal share which may be requested is up to 50% of the total project cost for all energy-efficiency projects and zero-emissions renewable energy systems. 

An award of up to 50% of the total project cost is also available for any project in a designated energy community and/or submitted by an eligible tribal entity. 

All other projects are eligible to apply for grants of up to 25% of the total project cost. The maximum grant is $1 million for renewable energy systems and $500,000 for energy-efficiency projects.

Additionally, to ensure that small projects have a fair opportunity to compete for funding, USDA will set aside at least 20% of the available funds until June 30 of each year for grant requests of $20,000 or less.

The main objective of the projects that the USDA is looking for must be to “help rural communities recover economically through more and better market opportunities and improved infrastructure, reduce climate pollution and increase resilience to the impacts of climate change, conserve and protect farmland, and invest in underserved communities.”

As part of the Biden-Harris Administration’s Justice40 Initiative, 40% of the overall benefits of certain Federal investments must flow to disadvantaged communities that are marginalized, underserved, and overburdened by pollution, which explains the focus of this project. 

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