USDA Rural Energy Assistance Program (REAP)

The goal of the USDA REAP (Rural Energy for America Program) is to support rural communities across the United States by providing grants and loan guarantees for renewable energy systems and energy efficiency improvements to promote economic development, energy independence, and environmental sustainability in rural areas.

What is the USDA REAP Grant?

The USDA REAP (Rural Energy for America Program) Grant is essentially a funding opportunity provided by the government to help folks in rural areas make their homes, farms, or businesses more energy efficient or to install renewable energy systems like solar panels. It’s like getting a financial boost to go green and save money on energy bills while helping the environment.

In 2023, the grant funds received a massive injection of money, pushing the grant coverage up to 50% of the total installation cost of your solar panel system, with a maximum funding limit of $1 million. The 50% grant is available until the fall of 2024. 


Who qualifies for the USDA REAP Grant?

Most farms and rural small businesses in an eligible area should qualify for grant funding. However, meeting the eligibility requirements does not guarantee that you will secure this highly competitive grant.

Farmers (Schedule F) Qualify for the USDA Grant

If you use Schedule F, you will be filing as an agricultural producer. To qualify, the majority of your income (51%) must come from the farm. Additionally, the majority of the electricity you use (51%) must be consumed by farm operations — not by personal residences attached to the property. Any electricity you use for your residence will not count toward your 51%. You also need to be free of any owed back taxes to the IRS.

Businesses (Form 1065 or 1120) Qualify for the USDA Grant

If you file a 1065 or 1120, you will be applying as a rural small business. The rules for qualifying are similar to those of farms: the majority of electricity consumed on the property must be for business purposes only, and the applicant can’t owe any back taxes. Most businesses that operate out of your residence do not qualify.

In addition, the business must be located in a qualifying area. The USDA defines this as an area with a population of 50,000 residents or less. You can use the USDA’s Eligibility Map to determine if your business is in a qualifying area. If your property is close to a qualifying area but it’s not quite within the shaded portion, check with a USDA Grant professional to determine whether or not it qualifies. 

We Can Help You Get Started

Let our experts at EngergyOne Renewables facilitate the grant application process to ensure the best possible competitive position for receiving USDA REAP funding. Get started today.