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Inflation Reduction Act

Inflation Reduction Act Funding for Rural Development

In August, Congress passed the Biden-Harris Administration’s historic legislative package known as the Inflation Reduction Act (IRA) to reduce energy costs for families and create thousands of good-paying jobs for people across rural America. IRA represents the largest single investment in rural electrification since the passage of the Rural Electrification Act in 1936. Sections 22001 through 22005 of IRA provide new loan and grant products and unprecedented incentives to expand clean energy, transform rural power production, create jobs, and spur economic growth to be offered by USDA Rural Development’s Rural Utilities Service (RUS) and Rural Business and Cooperative Service (RBCS).

  • The Act provides funding to USDA Rural Development to help eligible entities purchase renewable energy and zero-emission systems and make energy-efficiency improvements that will significantly reduce greenhouse gas emissions. For example, it provides:

    • Section 22001: Up to $1 billion for RUS loans for renewable energy infrastructure. The Act requires the agency to forgive up to 50% of the loan amount. Eligible entities include electric service providers, including municipals, cooperatives, investor-owned and Tribal utilities.

    • Section 22002: Up to $2.025 billion for the RBCS Rural Energy for America Program (REAP), with $303 million set aside for underutilized technologies and technical assistance. Funds are anticipated to support renewable energy and energy-efficiency projects for more than 41,500 farms and small businesses.

    • Section 22003: Up to $500 million in RBCS grants for infrastructure improvements to blend, store or distribute biofuels. This includes installing, retrofitting or upgrading dispensers for ethanol at retail stations as well as home heating oil distribution centers.

    • Section 22004: Up to $9.7 billion for RUS to offer loans, grants, loan modifications and other financial assistance to support the purchase of renewable energy systems, zero-emission systems and carbon capture systems. Funding also may be used to deploy these systems or to make energy-efficiency improvements to generation and transmission systems of eligible entities.

President Biden’s Inflation Reduction Act Climate Crisis

The nation’s largest-ever investment in combatting the climate crisis. This historic investment in rural communities, expands clean energy and supports American energy independence, invests in popular conservation programs and climate-smart agriculture, helps agricultural producers and rural small business owners make energy efficiency improvements and renewable energy investments to lower energy costs, generate new income and fosters economic opportunity. 

Download full project chart Download the White House Factsheet Download the IRA Climate and Clean Energy Solutions Factsheets

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Funding Notices

IRA Programs

New programs made possible by the Inflation Reduction Act will support new jobs and healthier communities. These funding opportunities will help rural energy and utility providers bring affordable, reliable clean energy to their communities across the country. To learn more, read the full Summary of New Programs and the Rural Utilities Service IRA Presentation.

Rural Energy for America Program (REAP)

Over $2 billion for renewable energy systems and energy efficiency improvement grants.

Empowering Rural America New ERA Program

New ERA funding improves health outcomes and lower energy costs for people in rural communities.

Powering Affordable Clean Energy (PACE) Program

PACE helps make clean, affordable, and reliable energy accessible to the people of rural America.

Higher Blends Infrastructure Incentive Program

Competitive grants to eligible entities for activities designed to expand the sales and use of renewable fuels.


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