USDA REAP grant applications sought to implement energy conservation practices, bioenergy projects

Attention REAP applicants, installers, partners and grant writers – it’s time to apply for grant dollars and low interest loans to implement energy conservation practices.

The Fiscal Year 2014 Notice of Funding of Availability (NOFA) for the Rural Energy for America (REAP) Guaranteed Loan and Grant Program was released May 5, 2014. For Michigan farmers, this means it is time to apply for grant dollars and low interest loans to implement energy conservation practices. Conserving energy puts money back in the farmer’s pocket.

Most practices have a payback period of less than 4 years as shown in Table 1. For example, on average, dairy farms who have conducted energy audits by the Michigan Farm Energy Program have identified energy conservation measures amounting to a potential reduction of 49 percent in their energy costs. The average potential energy savings is 40 percent for farm operations and rural businesses.

Table 1.  2010 – 2013 Average Potential Energy Efficiency Saving (Michigan Farm Energy Program).

Operation Type

Ave. % Energy Cost Savings

Ave. Pay-back (Yrs)

Average Energy Saved ($)

Dairy*

49%

2.7

$8,223

Greenhouse

39%

3.8

$33,343

Crops*

41%

2.2

$7,142

Grain Drying*

35%

8.0

$15,688

Irrigation

73%

3.9

$14,506

Hogs*

23%

3.4

$4,745

Beef*

49%

3.8

$1,261

Food Processing/Marketing

36%

4.9

$8,360

Rural Business

38%

2.2

$26,777

Totals (225)

40%

3.8

$13,924

* Homestead activities only, doesn’t include field operations.

What is the process for applying for REAP funds? The first step in the application process is to have a Tier 2 energy audit completed by a certified auditor. Contact an auditor to set up an appointment. Audits take about 3-4 hours, and the farmer must accompany the auditor on the audit. Dairy farmers who are a member of Michigan Milk Producers Association can contact their field reps to conduct their audit.

The next step is to complete the application form and requirements. Those who qualify to apply for the REAP program are Agricultural Producers (defined as an individual or entity directly engaged in the production of agricultural products that gets 50 percent plus of their gross income from agricultural production) or Small Rural Businesses (must meet the U.S. Small Business Administration definition of a small business) that are private entities, sole proprietorships, partnerships, corporations or cooperatives. The applicant must also be a citizen of the U.S. and must not have federal judgments or delinquent federal taxes. Rural Small Business projects must be located in a rural area. Agricultural Producer projects have no rural limitations. REAP funds must be used to purchase a renewable energy system or energy efficiency improvements. Some examples of energy efficiency improvements include:

  • Freezer and cooler upgrades
  • Lighting improvements, window and plumbing upgrades, insulation
  • Replacement grain dryers
  • Replacement irrigation units (diesel to electric, high presser to low pressure, traveler to pivots)
  • Greenhouse heating, lighting and cooling improvements
  • High efficiency motors, pumps, fans, blowers, compressors
  • Upgrading /replacing HVAC equipment

Some examples of renewable energy systems include:

  • Wind
  • Solar
  • Biomass/ Biofuel
  • Anaerobic digester
  • Geothermal
  • Hydropower

Such systems or improvements must be commercially available and replicable technology. All projects must have technical merit. REAP funds cannot be used for residential improvements or used to purchase agricultural tillage equipment, used equipment, and vehicles.

There are two types of applications, the Simplified and Full. The Simplified application is for projects with eligible costs of $200,000 or less. The Full application is for projects with eligible costs over $200,000. The difference between the two is in the reporting. The Simplified application requires a more streamlined technical report whereas the Full application requires additional documentation for the technical report and additional financial documentation. Applicants can contact their nearest USDA Rural Development Center and talk to a Business Specialist about their project and receive information about filling out an application.

The contact information is as follows:

East Lansing
Bobbie Morrison, Rick Vanderbeek, or Carol Webb 517-324-5157

Traverse City
Alan Anderson 231-941-0951, ext. 6

Gladstone
Lori Krause 906-428-1060, ext. 6

Caro
Paula Gromak 989-673-8173, ext. 6

Gladwin
Jackie Morgan 989-426-2750

Watervliet
Lisa Epple 269-463-8030

The simplified application is easy to fill out and should not take applicants long to complete. Applicants may want to consider hiring a reputable consultant to complete the Full application.

The final step is to submit the application. Paper and electronic applications for grants only or combination loans and grants must be RECEIVED no later than 4:30 pm on July 7, 2014. Applications received after 4:30 pm, July 7, 2014, regardless of the application postmark, will not be considered for funding in Fiscal Year 2014. Applications for guaranteed loans only must be RECEIVED no later than July 31, 2014. Applications for guaranteed loans only received after 4:30 pm, July 31, 2014, regardless of the application postmark, will not be considered for funding in Fiscal Year 2014.  

In preparation for REAP funding, Michigan State University Extension held a series of energy conservation workshops in November 2013 and April 2014 across the state. These workshops will be offered again in winter 2014. For more information about the workshops contact Charles Gould at 616-994-4547 or .(JavaScript must be enabled to view this email address). For more information on energy conservation programs contact Al Go at 517-353-0643 or .(JavaScript must be enabled to view this email address)

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