Your Guide to Reduce Solar Project Costs with Reap Grants
Looking for ways to make investing in solar energy more affordable? What if I told you there is a way to supplement up to 50% of your project costs? As part of the Inflation Reduction Act, REAP grants are helping agricultural producers and small businesses supplement costs on their renewable energy investments. What is REAP? Who is eligible? How do you apply? Follow this guide to apply for a REAP grant on your next solar project.
WHAT ARE REAP GRANTS?
To help increase American energy independence, the Rural Energy for America Program (REAP), administered by the USDA, provides guaranteed loan financing and grant funding for renewable energy systems and energy efficiency improvements. There are three types of funding available:
- Loan guarantees on loans up to 75% of total eligible project costs
- Grants for up to 50% of total eligible project costs
- Combined grant and loan guarantee funding up to 75% of total eligible project costs
Renewable energy system grants can be anywhere from $2,500 to $1 million, and energy efficiency grants can range from $1,500 to $500,000.
It is important to note that only non-residential costs are eligible to be reimbursed. For example, the electrical service for a farm property serves the agricultural side of things and the residence. Even though the costs are in one utility bill, you can only report the costs from your agricultural and business operations.
WHO IS ELIGIBLE FOR REAP GRANTS?
Agricultural producers with at least 50% of their gross income coming from agricultural operations and rural small businesses can apply for the program. If you are not sure if you qualify as a small business, you can search by your NACIS code. Once you have verified you are a small business, you can check whether or not you are in a rural area. Projects must be in rural areas with populations of 50,000 or less.
WHEN DO I APPLY FOR REAP GRANTS?
APPLY BEFORE YOU BUY
You should apply for REAP funding after you determine project design and cost but before you have spent money on equipment or contracts. Any costs prior to your application are not eligible for REAP reimbursement. Before applying, you should do the following:
- Gather financial information for the last three years
- Work with your preferred solar installer to complete your design
- Get quotes for work that needs to be performed
- Gather spec sheets of all major equipment
- Research your required permits
- Contact your utility if you need an interconnection agreement or Power Purchase Agreement.
USDA accepts applications year-round. The application windows for 2024 are March 31, June 30 and September 30. To apply for REAP, you must have a Dun & Bradstreet (D-U-N-S) number, pre-register with the System for Award Management (SAM), and have a Unique Entity ID. Registration costs nothing, but it can take a month or more, so take care of it as soon as possible. If you are already registered with SAM and have a Unique Entity ID, just make sure your registration is active.
HOW DO I APPLY FOR REAP GRANTS?
There are three application forms, and which one you use depends on the project size (not the grant size requested). To find these forms, visit the REAP website, choose your state and click the tab that says “To Apply.” You will find instructions for completing each application and the applications themselves.
These are the application forms you should use depending on your total project cost:
Many people utilize consultants and grant writers to complete the necessary paperwork. Under the “To Apply” tab, you will find a list of energy auditors, consultants and grant writers in the state you selected.
WHY SHOULD I APPLY FOR REAP?
Would you like to reduce the capital expenditure you have to make? If your project is a renewable energy system that produces zero greenhouse gas emissions (solar PV is zero emissions!), you are eligible for a 50% grant.
It’s not just solar. Energy efficiency improvements also qualify for a 50% grant. For example, one of our customers is an agricultural operation that uses the ingredients they grow to make and package different sauces from their farm. Because it is an energy efficiency expense for their business, they were able to finance part of their kitchen and packaging operation with REAP grant money.
WHERE CAN I GET MORE HELP?
If you are ready to apply and need more information, start by contacting your State Energy Coordinator and get your preferred solar installer involved early in your project. If you need more direction on who you can contact for assistance, please email Van Meter’s solar team at [email protected].