USDA Offers New Round of Renewable Energy Grants

This week, the USDA’s Office of Rural Business-Cooperative Service released a solicitation of proposals for the Renewable Energy Systems and Energy Efficiency Improvements Program (Section 9006) authorized under Title IX, of the 2002 Farm Bill.

This year’s solicitation makes $11.385 million available in competitive grant funds and approximately $176.5 million in guaranteed loan authority for the purchase of renewable energy systems and energy efficiency improvements for agriculture producers and rural small businesses. After August 1, 2006 any guarantee loan funds that are not obligated will be pooled and revert to the National Office reserve for grants under this notice. The USDA is in the process of evaluating the potential for a direct loan program, therefore for FY06 the program is limited to grants and loan guarantees. Grant applications must be completed and submitted to the appropriate USDA State Rural Development Office postmarked no later than May 12, 2006. Guaranteed loans will be awarded on a continuous basis. Loan Guarantee applications are due to the National Office for funding consideration by July 3, 2006. Grant amounts – Awards for renewable energy systems will be between $2,500 and $500,000. – Awards for energy efficiency improvements will be between $1,500 and $250,000. – Rural Development grants under this program will not exceed 25 percent of the eligible project costs. – Rural Development combined grant and guaranteed loan funding packages will not exceed 50 percent of eligible project cost, with the grant portion not to exceed 25 percent of eligible project costs. Loan Guarantee – Maximum amount of a guaranteed loan made to a borrower will be $10 million – For FY 2006, the guarantee fee amount is 1.0% (one percent) of the guaranteed portion of the loan and the annual renewal fee is 0.125% (one-eighth of one percent) of the guaranteed portion of the loan. – Rural Development guaranteed loans will not exceed 50 percent of the eligible project costs. For more information, see the following link below:
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