Rural Energy for America Program

Cut energy costs and grow your rural small business or agricultural production firm with the Rural Energy for America Program (REAP).


Quick takeaways

  • Do you own or operate a rural small business or agricultural production facility? You may be eligible for a loan or grant to buy, build, and install energy efficiency improvements through REAP. REAP is funded through President Biden’s Inflation Reduction Act (IRA). 
  • You can apply for REAP funding anytime. Funding decisions will be made on September 30, 2024. 
  • SBA has programs and resources that can help your business take advantage of REAP. These include our business loan programs, our District Offices, and our national network of Resource Partners.

About REAP

The IRA, signed into law by President Biden, represents the largest single investment in rural electrification since the passage of the Rural Electrification Act in 1936. The IRA provides new loan and grant products and unprecedented incentives to expand clean energy, transform rural power production, create jobs, and spur economic growth, supporting renewable energy and energy-efficiency projects for more than 41,500 farms and small businesses.

The U.S. Department of Agriculture’s (USDA) has over $1 billion available in REAP funds, distributed across two types of funding: 

  1. Guaranteed loans: Businesses may apply for guaranteed loans for up to 75% of total eligible project costs. Reasonable and customary fees for loan origination will be negotiated between the borrower and lender. 
  2. Grants: Renewable Energy System Grants are available from $2,500 - $1 million. Energy Efficiency Grants are available from $1,500 - $500,000. Applicants must provide matching funds if applying for a grant only. Grants may be up to 50% of total eligible project costs. 

Combined grant and loan guarantee funding may be up to 75% of total eligible project costs. There is no maximum total project size.

Purchase and installation of renewable energy systems: 

  • 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

Purchase, installation and construction of energy efficiency improvements: 

  • 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

Agricultural producers may also use guaranteed loan funds to install energy efficient equipment and systems for agricultural production or processing. 

REAP consists of loans and grants intended for rural small businesses or agricultural production businesses. They can help you invest in renewable energy solutions that increase energy efficiency and lower energy costs. Agricultural producers can also use the loans to install energy-efficient equipment and systems for agricultural production and processing.

For example, Sturgis Meats in Meade, SD installed an energy efficient refrigeration system that will save the business $32,000 in energy costs per year. Additional examples of successful REAP fund recipients include: 

  • In Nebraska, Darr Grain will install three 15-kilowatt (kW) wind turbines at a grain storage facility. This project is expected to save the business $9,700 in electrical costs per year. It will also generate more than 138,000 kilowatt hours (kWh) of electricity per year. This represents 77% of the company’s energy use, which is enough to power nine homes.
  • In Maine, Moorit Hill Farm will install a 41 kW roof mount solar system. The system will save the farm more than 50,000 kWh per year, which is equivalent to approximately 100% of the farm’s energy use. This is enough clean energy to power nearly five homes.
  • In Idaho, Boulder Creek Oz will purchase and install a biomass furnace. This will provide additional heat to their cabins and mountain lodging facilities in Boundary County. This project is expected to save more than $3,800 per year. It will replace more than 3,700 kWh, which is approximately 94% of the energy use per year.

You may be eligible if you are: 

  • A rural small business located in a rural area of 50,000 residents or less 
  • A small business, as defined by SBA size standards
  • An entity directly engaged in production of agricultural products where at least 50% of gross income is derived from agricultural operations

See if your business address qualifies by using USDA's rural property eligibility map. You can also find more information on REAP loans and grant eligibility on the USDA site.

If you are interested in applying for a REAP loan and/or grant:

  1. Connect with your state office. This is a key first step that will save you time on forms or applications.
  2. Once you have connected with your state office, find your state-specific forms and instructions. All forms and application materials are available on the USDA website. Select your state from the drop-down under the “To Apply” tab.
  3. Check out the FAQs for additional information. 

How SBA can help your business

Rural businesses and agricultural producers may consider leveraging SBA-guaranteed capital to meet the REAP grant program’s 50% cost share requirement, or to meet the remainder of any project costs. Visit SBA’s Lender Match tool to find lenders that may be interested in funding your business. 

As an example, a business may consider meeting their cost share requirement with an SBA-guaranteed 7(a) loan, which can be used for: 

  • Acquiring, refinancing, or improving real estate and buildings
  • Short- and long-term working capital 
  • Refinancing current business debt 
  • Purchasing and installation of machinery and equipment, including AI-related expenses
  • Purchasing furniture, fixtures, and supplies 
  • Changes of ownership (complete or partial)
  • Multiple purpose loans, including any of the above

The maximum loan amount for a 7(a) loan is $5 million.

If you need general business counseling or have questions for our SBA staff, find a District Office or Resource Partner near you. 

Additional resources for your small business

Last updated July 10, 2024