What’s New With The USDA’s REAP Grant?

Horse standing in a fenced in area in front of a barn with a solar system on the roof during the summer

In This Article

The USDA’s Rural Energy for America Program (REAP) has made a significant contribution to advancing the adoption of solar and other renewable energy projects since it was established in 2008. In Southern Energy Management’s 20+ years of installing solar for residential homes and commercial businesses, we’ve seen growing interest in the REAP Grant in the past several years. 2023 marks an even more exciting time for the program as it receives many improvements as a result of the Inflation Reduction Act (IRA) being passed last year.

These new changes will enhance the REAP program’s benefits and its accessibility, making solar and other renewable energy technologies more feasible for a broader range of communities and project types. Let’s dive into the 5 key updates to REAP for commercial solar projects.

What’s New With the REAP Grant for 2023?

If you are just now hearing about the REAP Grant, welcome aboard! You’ll probably want to hop over to this post for a quick onboarding lesson of REAP basics before diving into what’s changing (or check out this sheet for a quick download). If you’re already familiar with the REAP Grant, you’re in the right place – Keep reading for the 4 major changes to the USDA’s REAP starting this year:

1. Grant Increase from 25% to 50%

Yes, you read that right! The REAP Grant has increased from 25% to 50%. When combined with the 30% Tax Credit, a solar project can break even within just 1-3 years. And when you throw accelerated bonus depreciation onto the savings stack, eligible projects can offset 70-90% of their solar system costs. We can’t stress enough how big of an opportunity this is for REAP-eligible solar projects!

graph showing the impact of solar incentives reducing a solar system's cost from $100,000 to $6,150 after applying the REAP grant, bonus depreciation, and 30% federal tax credit incentives
A ground-mounted solar system along a dirt road on a farm during the summer

The process to determine if you qualify takes 5 minutes. So if you’re a farmer or rural small business, reach out today to see if you qualify

2. Increased Maximum Grant Funding

The USDA has drastically increased the maximum amount available for a large REAP project from $250,000 to a whopping $1 million. That is a substantial increase in funding which conveys the USDA’s commitment to supporting renewable energy and helping farms and small businesses in rural communities cut energy costs and reduce operating expenses.

Residents from Elderberry Cohousing standing in front of community ground mount solar system

3. Quarterly Application Cycles

The application process for REAP has been revamped – no more long waiting periods caused by biannual submissions based on project size. In the past, the REAP program had separate application windows for larger projects (costing over $80,000) in the Spring, and smaller projects (costing under $80,000) in the Fall. This classification has been removed and now, REAP will accept applications every quarter, allowing projects to get off the ground faster. The first quarterly application starts on June 30, 2023. Give us a call to see if you’re eligible!

Horse eating grass in a field next to a ground mounted solar system during the fall
A horse eating grass in a field next to a ground-mounted solar system during the Fall

4. Other New Rules and Guidelines

With all of the exciting improvements to REAP come some adjustments to the program’s rules and guidelines. 

Under the new 2023 REAP guidelines…

  • Residential projects are not eligible and shared meter projects encounter further constraints.
  • No project is allowed to receive more than 50% of its funding from federal sources.
  • Projects must be completed within a two-year period. 
  • For projects costing over $200,000, documentation will be mandatory. For for those exceeding $400,000, a professional engineer’s signature will be a prerequisite. It’s important to note that only costs that arise after the successful submission of the completed application are eligible for consideration, including any down payments made.

5. New Scoring System

The USDA has revised its scoring system for applications. The scoring system is made up of criteria used to evaluate the project for grant allocation – typically, evaluation takes into consideration a project’s energy displacement, environmental benefits, location, and other impacts. An updated score sheet has not been published yet, but we’ll update this blog when we know more!

Horse standing in a fenced in area in front of a barn with a solar system on the roof during the summer
A horse standing in a fenced-in area in front of a barn with a solar system on the roof during the Summer

What’s Next?

All of these changes to the USDA’s REAP Grant program cumulatively signify a new era – one of increased support and accessibility to solar and other renewable energy projects for rural America.

Curious to see if your project is eligible, or want to go ahead and get started? Reach out today! 

Meet the Author

Lindsay Brecheisen

Always enjoying the journey 🙂 Lindsay is the conductor of content at Southern Energy Management. When she isn’t synthesizing information into a newsletter or blog — Lindsay enjoys long walks on the beach with her cat, listening to soul on vinyl, and surfing the earth or sea (depending on the season).

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