Rural energy for America program

Funding available for agricultural producers to install renewable energy systems.

If you are an agricultural producer with at least 50 percent of your gross income coming from agriculture or a small rural business, then you may be eligible to participate in the USDA Rural Energy for America Program (REAP). REAP offers grant funding and loan guarantees to qualifying operations and businesses to purchase, install, or construct renewable energy systems. Examples of renewable energy projects include but aren’t limited to: biomass, geothermal, wind, and solar. Funds may be also used for energy efficiency improvements. 

Multiple funding options are available. Grants can cover up to 25 percent of total project costs, while loan guarantees can be used for 75 percent of total project costs. A combination of the two cannot exceed 75 percent of the total cost of your project. Importantly, recipients may be eligible for federal tax credits as well. The current federal tax credit is 30 percent. If you were to install a $50,000 solar array, you could receive a $15,000 tax credit depending upon your specific situation. As a reminder, it is always best to consult a tax professional for clarification on tax issues prior to beginning any project.

Applications for REAP are accepted on a rolling basis year round and funds are distributed to eligible applicants when funds are appropriated annually. Applications can be submitted to your local USDA Rural Development office. Prior to filling out an application, interested applicants should contact Michigan’s Rural Development State Rural Energy Coordinator to discuss eligibility criteria.

For more information please visit USDA REAP, or visit your local Michigan State University Extension office for answers to frequently asked questions about this program.

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