President Biden’s Inflation Reduction Act Lowers Energy Costs, Builds America’s Clean-Energy Economy in Rural America
ST. PAUL, Minn., April 3, 2023 – U.S. Department of Agriculture (USDA) Rural Development State Director in Minnesota Colleen Landkamer today announced that the Department began accepting applications on April 1 for $1 billion in grants to help agricultural producers and rural small businesses invest in renewable energy systems and make energy-efficiency improvements. USDA is making the $1 billion in grants available under the Rural Energy for America Program (REAP), with funding from President Biden’s landmark Inflation Reduction Act, the nation’s largest-ever investment in combating the climate crisis.
“Minnesota ag producers and rural small businesses have long been leaders in reducing their climate footprint through the implementation of renewable energy and energy efficient infrastructure within their operations,” Landkamer said. “USDA is proud to be a partner in these efforts. Since 2020 alone, USDA has invested in more than 380 rural small businesses and ag producers throughout Minnesota – totaling nearly $60 million in clean energy infrastructure. These investments help tackle the climate crisis while also lowering energy costs and supporting the growth and prosperity of our state’s rural communities.”
Recipients may use REAP funds to install renewable energy systems or to make energy-efficiency improvements. Eligible applicants include rural small businesses and agricultural producers. USDA will hold competitions quarterly through Sept. 30, 2024. The funding will also include the creation of the first underutilized technology fund in the REAP program, with $144.5 million available in dedicated funding.
USDA is particularly interested in REAP projects that will help rural communities recover economically through more and better market opportunities and improved infrastructure, reduce climate pollution and increase resilience to the impacts of climate change, conserve and protect farmland, and invest in underserved communities. The program is part of the Biden-Harris Administration’s Justice40 Initiative, which aims to ensure that 40% of the overall benefits of certain Federal investments flow to disadvantaged communities that are marginalized, underserved and overburdened by pollution.
To ensure that small projects have a fair opportunity to compete for the funding, USDA will set aside at least 20% of the available funds until June 30 of each year for grant requests of $20,000 or less, including the grant portion of a combined grant and guaranteed loan request.
The maximum federal share which may be requested is up to 50% of the total project cost for all energy-efficiency projects and zero-emissions renewable energy systems. An award of up to 50% of the total project cost is also available for any project in a designated energy community and/or submitted by an eligible tribal entity. All other projects are eligible to apply for grants of up to 25% of the total project cost. The maximum grant is $1 million for renewable energy systems and $500,000 for energy-efficiency projects.
For additional information on application deadlines and submission details, see page 19239 of the March 31 Federal Register.
Inflation Reduction Act: Background
The Inflation Reduction Act will boost the long-term resiliency, reliability and affordability of rural electric systems. It will help families save money on utility bills, and it will expand rural opportunities in the clean-energy economy.
Rural Development provides loans and grants to help expand economic opportunities, create jobs and improve the quality of life for millions of Americans in rural areas. This assistance supports infrastructure improvements; business development; housing; community facilities such as schools, public safety and health care; and high-speed internet access in rural, Tribal and high-poverty areas. For more information, visit www.rd.usda.gov/mn.
To subscribe to USDA Rural Development updates, visit our GovDelivery subscriber page.