Energy + Environment, Legislation + Regulation

New USDA Program Can Pay 50% Of Rural Energy Efficiency & Renewable Energy Upgrades


New USDA Program Can Pay 50% Of Rural Energy Efficiency & Renewable Energy Upgrades

Rural Energy for America is a new program of the US Department of Agriculture. The program provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses, for renewable energy systems or to make energy efficiency improvements. Agricultural producers may also apply for new energy efficient equipment and new system loans for agricultural production and processing.

The following entities can apply:

Agricultural producers. An entity directly engaged in production of agricultural products where at least 50 percent of their gross income comes from agricultural operations.

 Small businesses. Must be located in eligible rural areas, meet SBA size standards, and one of the following:

  • Private for-profit entity (sole Proprietorship, Partnership, or Corporation)
  • A Cooperative [including those qualified under Section 501(c)(12) of IRS Code]
  • An electric utility (including a Tribal or governmental electric utility) that provides service to rural consumers and operates independent of direct government control)
  • A Tribal corporation or other Tribal business entities that are chartered under Section 17 of the Indian Reorganization Act (25 USC 477) or have similar structures and relationships with their Tribal entity without regard to the resources of the Tribal government.

Projects must be located in rural areas with populations of 50,000 residents or less. Agricultural producers may submit projects located in non-rural areas, as long as the project is associated with an on-site production operation.

Funds may be used for the purchase and installation of renewable energy systems, such as:

  • Biomass (for example: 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.
  • Ocean (tidal, current, thermal) generation.

Funds may also be used for the purchase, installation and construction of 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 electric irrigation motor.
  • Replacement of energy-inefficient equipment.

Energy Efficiency Improvement applications must contain an Energy Audit, or Energy Assessment (depending on Total Project Costs) that complies with Appendix A to RD Instructions 4280-B.

Three types of funding are available:

  • Loan guarantees on loans up to 75 percent of total eligible project costs.
  • Grants for up to 50 percent of total eligible project costs.
  • Combined grant and loan guarantee funding up to 75% of total eligible project costs.

The grant limits are the following:

  • Renewable Energy System Grants: $2,500 minimum. $1 million maximum.
  • Energy Efficiency Grants: $1,500 minimum. $500,000 maximum.

More information is available here.


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David Shiller
David Shiller is the Publisher of LightNOW, and President of Lighting Solution Development, a North American consulting firm providing business development services to advanced lighting manufacturers. The ALA awarded David the Pillar of the Industry Award. David has co-chaired ALA’s Engineering Committee since 2010. David established MaxLite’s OEM component sales into a multi-million dollar division. He invented GU24 lamps while leading ENERGY STAR lighting programs for the US EPA. David has been published in leading lighting publications, including LD+A, enLIGHTenment Magazine, LEDs Magazine, and more.


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