From the Fields: A Look at REAP
By Jeff Wilke, Bank First
For agricultural producers looking to become more energy efficient, they may want to check out the USDA’s Rural Energy for America Program (“REAP”). This program provides guaranteed loan financing and grant funding to agricultural businesses and rural small businesses for renewal energy systems, or to make energy efficiency improvements. Agricultural producers can also use guaranteed loan funds to install energy-efficient equipment and systems for agricultural production and processing.
Who can apply? Agricultural producers with at least 50% of their gross income coming from agricultural operations and small businesses in rural areas with populations of 50,000 or less.
How can funds be used? For renewal energy systems such as: Biomass (biodiesel and ethanol, anaerobic digesters and solid fuels); Geothermal for electric generation or direct use; Hydropower below 30 megawatts; Hydrogen; Small and large wind generation; Small and large solar generation. Funds can also be used to buy, build, and install energy efficiency improvements such as: High-efficiency heating, ventilation, and air conditioning systems (HVAC); Insulation, Lighting, Cooling or refrigeration units; Doors and windows; Electric, solar, or gravity pumps for sprinkler pivots; Switching from a diesel to an electric irrigation motor; Replacement of energy-inefficient equipment.
What types of funding are available? Loan guarantees on loans up to 75% of total eligible project costs, Grants for up to 50% of eligible project costs, Combined grant and loan guarantee funding up to 75% of total eligible project costs.
Applications for REAP loan guarantees and grants are accepted year-round at the local USDA Rural Development office. Please visit www.usda.gov for more information.
Wilke is vice president – agricultural banking at Bank First in Denmark. Wilke also serves as the current Chair on the 2024–2025 WBA Agricultural Bankers Section Board of Directors.
