Grants and guaranteed loans are now available for rural businesses or agricultural producers looking to produce renewable energy or make energy-saving improvements to their facilities or farms.
Grant-only applications can be submitted at any time, but the deadline for FY 2007 is May 18, 2007. Applications for guaranteed loans and a combination grant and guaranteed loan can be submitted at any time, but must be received by July 2, 2007 to be considered for FY 2007 funding.
There is $176.5 million in loan guarantees and $11.4 million in grants available for FY 2007. Fifty-percent of the grant funding is being reserved for applications that are a combination of guaranteed loan and grant.
“This program can make a big difference to rural small businesses or producers looking to finance a renewable energy system or make energy saving improvements to their facility or equipment,” said USDA Rural Development State Director Lorraine P. Shin. “I encourage interested business owners and producers to contact us at USDA Rural Development to learn more.”
Energy efficiency improvement projects can be in addition to a renewable system and include undertakings such as retrofitting existing processing operations, or replacing lighting/refrigeration/electric motors with more efficient equipment. Projects can even include building a more energy efficient facility, when the facility is used for the same purpose, is approximately the same size, and, based on the energy audit, will provide more energy savings than improving an existing facility.
Rural-based small businesses such as restaurants, grocery stores, bakeries, greenhouses, cold storage businesses, manufacturing facilities, as well as any other business that requires a large amount of energy to operate, may benefit from an energy-efficient upgrade that these funds could help finance.
The program can also be used to purchase and install renewable energy systems: solar, bioenergy (biomass, biogas), geothermal, wind, and hydrogen.
Grants can be used to cover up to 25 percent of a project cost, and can be combined with the guaranteed loan program to further lower the cost of a variety of energy projects. Minimum total project costs to qualify for grants are $6,000 for energy efficiency improvements and $10,000 for new renewable energy projects. The maximum energy efficiency grant is $250,000; $500,000 for renewable energy.
Guaranteed loans can be issued for up to 50 percent of the project costs. Minimum project cost to qualify for a guaranteed loan is $10,000 for both energy efficiency and renewable projects. The maximum guaranteed loan is $10 million. A combination grant and guaranteed loan can be requested for up to 50 percent of eligible project costs.
Costs incurred before submitting an application for both grants and loan guarantees are not eligible. In addition, funds are not available for residential use.
USDA Rural Development's mission is to deliver programs that will support increasing economic opportunity and improve the quality of life of rural residents. As a venture capital entity, Rural Development provides equity and technical assistance to finance and foster growth in homeownership, business development, and critical community and technology infrastructure. Additional information about rural programs is available at a local USDA Rural Development office, or on USDA's Web site at: http://www.rurdev.usda.gov.
For more information on USDA Rural Development's renewable energy programs, contact Tim O'Connell, Rural Energy Coordinator, at 808-933-8313 or at tim.oconnell@hi.usda.gov.
