On April 14, 2011, the United States Department of Agriculture (“USDA”) announced the availability of funds under the Rural Energy for America Program (“REAP”). REAP provides assistance to small businesses located in rural areas and to farmers and ranchers via grants and loan guarantees for the purchase and installation of renewable energy generating systems and for energy efficiency improvements. The USDA is providing funding for up to $42 million in grants and $61 million in guaranteed loans. In particular, the USDA will provide grants of up to $500,000 for 25 percent of a project cost and guarantees of up to 75 percent on loans up to $25 million. The Federal Register notice is available here.

The USDA further revised the definition of renewable energy systems in REAP to include flexible fuel pumps, aka “blender pumps.” Blender pumps can dispense motor fuel that is up to 85 percent biofuel and the U.S. government has approved the sale of gasoline containing 15 percent ethanol. The standard blend is 10 percent, but investments will be needed to install pumps that dispense higher blends. In addition to funding available under REAP, the USDA has recently announced a goal of installing up to 10,000 of the blender pumps in five years.

Applications for renewable energy systems, including blender pumps, and energy efficiency projects are due by June 15, 2011.