The Rural Energy for America Program helps agricultural entities and rural small businesses develop renewable energy systems or implement energy efficiency upgrades by making capital available. While the grant-making portion of REAP is closed until at least October 1, 2025 (and perhaps longer depending on Congressional funding), the loan portion of the program is open and accepting applications on an ongoing basis.

REAP is a program of the U.S. Department of Agriculture Rural Development, and while it is structured to assist agricultural producers, it also includes small businesses that are located in rural areas with populations of 50,000 or less. The population limit does not apply to agricultural producers, who may be located in rural or non-rural areas.

REAP participants work with a USDA-approved local lender, which sets the terms of the loan. The lender assumes up to 25 percent of the loan risk, and the USDA guarantees the rest. Interest rates and loan amount are set by the local lender; however, businesses that might not qualify for the funds necessary to complete a project often see their loan approved because the local lender is risking less than if the USDA guarantee were not involved.

Individual borrowers must be citizens of the United States or reside in the U.S. after being legally admitted for permanent residence. Borrowers must demonstrate that loan funds will remain in the U.S. and have no outstanding or delinquent federal taxes or debt.

Funds may be used for the purchase and installation of renewable energy systems, such as wind and solar generation and other forms of energy production. Funds may also be used for the purchase, installation and construction of energy efficiency improvements, such as insulation, lighting, and the replacement of energy-inefficient equipment. Agricultural producers may also use guaranteed loan funds to install energy-efficient equipment and systems for agricultural production or processing.

As with all government-backed loans, the rules can be complicated. Arrowhead Center at New Mexico State University often hosts webinars to help potential applicants determine if they are eligible and improve their funding prospects. Arrowhead also offers one-on-one consultations, proposal reviews, energy audit coordination, and access to a library of resources.

Read about REAP on the USDA Rural Development website.

Register for the July 16, 2025, webinar hosted by Arrowhead Center, and learn about Arrowhead’s other REAP services.