USDA Announces Nearly $600 Million to Help Rural U.S. Transition to Renewable Energy

The U.S. Department of Agriculture (USDA) announced Thursday it would channel nearly $600 million into helping the rural and agricultural U.S. transition to renewable energy and respond to the climate crisis. 

That breaks down into $285 million that has already been promised to 844 projects in 46 states and $300 million in additional loans and grants, $250 million of which was made possible by the Inflation Reduction Act (IRA).

“People in rural America are on the front lines of climate change, and our communities deserve investments that will strengthen our Country’s resilience,” USDA Secretary Tom Vilsack said in the press release announcing the funds.

The money comes through a government initiative called the Rural Energy for America Program (REAP). This program offers loans and grants for farmers and rural small business owners to help them either create a renewable energy system for their business or increase their energy efficiency. To qualify, an applicant must either make at least half of their income from agriculture or own a small business in an area with a population of 50,000 or less. Money can be used for renewable energy systems including biomass, geothermal, wind and solar or improving efficiency through means such as lighting, insulation and HVAC systems. 

For example, one of the recipients of the newly announced funds is the Bear Creek Winery in Homer, Alaska, which will receive a $37,509 grant to install a 44.80 kilowatt (kW) solar photovoltaic (PV) system, according to the USDA. Another is Marzen Family Farms near Stacyville, Iowa, which will receive a $16,000 grant for a more energy-efficient system for drying grain.

In addition, the USDA is now accepting applications for $300 million more for similar projects. The application period for the 2023 fiscal year closes on March 31, 2023, according to the REAP website. The new money is largely thanks to the ground-breaking IRA, passed in August, which included the nation’s largest investment in climate funds at around $369 billion. Almost $2 billion of that money was earmarked for REAP, Reuters reported. 

In his statement, Vilsack praised the climate efforts of President Joe Biden, for whom the IRA was a major legislative victory. 

“President Biden has created a roadmap for how we can tackle the climate crisis and expand access to renewable energy infrastructure, all while creating good-paying jobs and saving people money on their energy costs,” he said. “These investments underscore the Biden-Harris administration’s commitment to providing funding and resources to rural people and communities across the country to help drive economic security and prosperity.”

Vilsack told journalists that the rest of the IRA money would be awarded as soon as possible over the coming years, as Reuters reported.

“We know the need is out there and we know the demand is out there,” he said.