Rural Energy for America Program Renewable Energy Systems & Energy Efficiency Improvement Loans & Grants in Arkansas

What does this program do? 

The program competitively awards grant money to agricultural producers and rural small businesses to reimburse expenses for the installation of renewable energy systems or energy efficiency improvement projects.  

This program strengthens America’s energy independence by reducing energy use and increasing clean energy production. Over time, these investments lower energy costs for small businesses and agricultural producers. 

REAP Guaranteed Loan funding is also available. 

Who can apply?  

• Rural agricultural producers  
• Rural small businesses  

Eligible businesses include:  

• For-profit business independently owned operated  
• A business that is wholly owned by an Indian Tribe  

The applicant must be the highest-level owner of the business. The applicant must be an existing business, not a start-up.  

For more information about applicant eligibility requirements review 7 CFR 4280.104.  

NOTE: Applicants cannot have any overdue federal taxes, unpaid federal debts, federal judgments, or be barred from receiving federal funds. 

What is an eligible area? 

• Projects must be in rural areas with populations of 50,000 residents or less. 
• Check eligible rural areas 

How may the funds be used? 

Funds can be used to reimburse expenses to buy and install renewable energy systems such as: 

• Biomass systems (like biodiesel and ethanol, anaerobic digesters, or solid fuel systems) 
• Geothermal systems for producing electricity or direct use 
• Hydropower systems under 30 megawatts 
• Hydrogen systems 
• Wind turbines 
• Solar energy systems 
• Ocean energy systems that use tides, currents or thermal energy 

Funds also can be used to reimburse expenses to purchase and install energy efficiency improvements, such as: 

• High-efficiency heating, cooling, and ventilation (HVAC) systems 
• Insulation 
• Energy-efficient lighting 
• High-efficiency cooling or refrigeration units 
• Energy-efficient doors and windows 
• Electric, solar, or gravity-powered pumps for irrigation pivots 
• Replacing a diesel irrigation motor with an electric motor 
• Replacing equipment that uses more energy than necessary 

What funding is available? 

Grant funding is available for up to 25% of total project costs. 

Note: An application may also be filed for a REAP Guaranteed Loan. Total REAP funding cannot exceed 75 percent of total project costs. 

What are the grant terms? 

Renewable Energy System Grants: 

• Minimum grant amount: $1,500 
• Maximum grant amount: $500,000 

Energy Efficiency Grants: 

• Minimum grant amount: $1,500 
• Maximum grant amount: $250,000 

Applicants must provide cost sharing. 

Energy efficiency projects require an energy audit or assessment. 

What are some of the grant restrictions? 

• The project must have been installed and operated for at least 12 consecutive months before you submit the application. 
• Each person or business, including those with shared owners or managers, can submit only one application and receive one award per federal fiscal year. 
• The applicant must have stable finances with a current assets to current liabilities ratio equal to or greater than 1:1. 
• Businesses cannot be headquartered in a foreign adversary country. 
• Ground-mounted solar and wind projects cannot be installed on cropland. 
• Ground-mounted solar and wind projects on non-cropland must show commensurate historical energy use, meaning the system must be sized appropriately and be aligned with past energy usage.  
• Beginning October 16, 2026, all solar pv and wind projects cannot include components made in countries designated as foreign adversaries. 
• The cost recovery period (simple payback) must not exceed the useful life of the project. 

Who can answer questions? 

Contact your State Rural Development Energy Coordinator 

How will my application compete? 

For more information on how your application will be scored review 7 CFR 4280.140(d) 

What governs this program? 

• Grants: 7 CFR 4280, Subpart B 
• Guaranteed Loans:  7 CFR 5001 

Program authorization: 

• Title IX of the Agricultural Improvement Act of 2018