USDA Homeowner Energy Grants
The federal government in 2010 offers several incentive programs to encourage homeowners to improve their houses' energy efficiency or install renewable energy systems, such as solar panels or wind turbines. But certain home and business owners in rural communities have grants targeted specifically to them through the U.S. Department of Agriculture (USDA). The federal agency's primary program that homeowners can use for energy projects is the Rural Energy for America Program (REAP).
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Grant Types
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The USDA breaks down REAP into three grants, the largest of which is for installing renewable energy systems or improving energy efficiency. REAP offers grants to conduct feasibility studies to determine if it would be worthwhile to do the energy work. The third REAP grant is to audit energy needs, but the USDA does not grant these directly to homeowners.
Amounts
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REAP grants can cover up to 25 percent of eligible costs for all three of the grant programs, but each program caps maximum awards at certain dollar amounts. System installations have the largest caps at $500,000. The energy efficiency grants from the same program are eligible for up to $250,000. The grants also have minimum of $2,500 for installations and $1,500 for efficiency projects.
Before installing systems or making upgrades, homeowners can apply for up to $50,000 to conduct feasibility studies.
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Recipient Eligibility
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There are two classifications for who can receive REAP grants for installation, upgrades and feasibility studies. The first group is owners of small businesses, which the Small Business Administration defines. The second group is agricultural producers, meaning ranchers or farmers. In order for the USDA to consider someone an agricultural producer, he must receive at least half of his annual income from ranching or farming.
Project Eligibility
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The USDA uses REAP grants to help agricultural producers and rural small businesses pay for most work that reduces energy use and cuts costs. The department says that kind of work can range from insulation to lighting upgrades. The types of energy systems REAP grants will help pay for can include solar, geothermal, wind, biomass, hydro or hydrogen energy. To be eligible, a system is required to produce electricity, heat or fuel.
Audit Grants
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Audit grants, which also cover up to 25 percent of costs but are not open to homeowners, are worth up to $100,000.
The grants are open to government agencies, public utilities offices, rural energy cooperatives and colleges and higher education institutions. Although the USDA does not give the grants directly to businesses or homeowners, the recipients are supposed to conduct the audits to be of benefit to them.
Loans
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Outside of grants, home and business owners in rural communities can receive more money if they are willing to pay back the USDA. REAP loan guarantees can cover up to 75 percent of a project's costs.
Loan applicants can seek between $5,000 and $25 million from REAP. The USDA maximum guarantees that REAP offers is 85 percent for $600,000 loans or less. The larger the loan becomes, the lower the guarantee.
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References
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