How Farms and Small Businesses Can Get Federal Money for Solar

The Renewable Energy for America Program also provides grants for energy efficiency improvements.

Bryce Oates January 9, 2023

A new wave of federal dollars is flowing into rural America to fund renewable energy and energy efficiency projects for farmers and small business owners. Through the U.S. Department of Agriculture’s Renewable Energy for America Program (REAP), established through the Farm Bill in 2002, rural Americans can access grants and loans to help pay for solar arrays and other energy projects while also reducing fossil fuel pollution.

In 2022, Congress passed the Inflation Reduction Act, delivering hundreds of billions of dollars in clean energy subsidies and tax credits. Under this bill, REAP was awarded more than $2 billion over the next decade to deploy solar panels, replace inefficient energy equipment, install insulation, improve HVAC systems, and make numerous other renewable energy and energy efficiency improvements. REAP grants in the current round of applications cover up to 40% of a project’s cost, up from 25% previously. In the next round of applications, later in FY 2023, grants will cover up to 50% thanks to increased funding from the Inflation Reduction Act.

Installing solar panels on farms and Main Street businesses is one of REAP’s most popular uses. Solar projects could be eligible for both REAP grants and the 30% federal tax credit for solar arrays, meaning that federal funding could cover 80% of eligible project costs with the new increased grants.

As of 2019, the program had helped more than 19,000 farmers, ranchers, and rural small businesses produce clean energy, cut energy costs, and boost rural economic development, according to the Environmental Law and Policy Center (ELPC). ELPC advocates for more REAP funding to “provide climate solutions while helping agriculture and rural communities to adapt to, and prosper in, a low carbon future.”

To determine if solar energy is a good fit for your farm or small business, nonprofit Solar United Neighbors has a specific page for farmers and rural small businesses interested in using REAP grants. Solar United Neighbors also has a free “Go Solar Guide” to help walk you through the process.

Especially with the incentives, installing renewable energy and making efficiency improvements have a relatively quick payback period. This makes now a great time to speak with local installers and other energy service providers. The short-term funding is likely to create a boom in renewable energy supplies in the Midwest and throughout the nation, reducing environmental damage as well as supporting thousands of jobs throughout rural America.

REAP funds may also be used for the purchase, installation, and construction of energy efficiency improvements. Eligible expenses could include:

  • 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

Applications are due March 31, 2023. Each state determines which applicants are successful. State offices of USDA Rural Development manage the program. Contact info for your state can be found here. In rural Wisconsin, contact:

Brenda Heinen, USDA Rural Development

390 Red Cedar St., Suite G

Menomonie, WI 54751

Phone: (715) 619-3123

Email: brenda.heinen@usda.gov

Web: http://www.rd.usda.gov/wi

Bryce Oates

Bryce Oates writes The Cocklebur on Substack and is a Contributing Editor (Rural Community Organizing) at Barn Raiser. He writes about rural policy, people, places and politics. His work includes narrative nonfiction, opinion pieces and Q&A interviews. Bryce studies how the federal budget affects rural counties, farm and food policy, public lands and conservation issues, racial and gender equity in rural areas, climate change, economic inequality, rural demographic data and rural politics. A former farmer, rural economic developer and community organizer, he lives and works in Oregon’s Willamette Valley.

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