The U.S. Department of Agriculture has issued a Notice of Solicitation Inviting Applications for Grants and Loan Guarantees under the Rural Energy for America Program (REAP). The program will provide loan guarantees and/or grants to assist rural small businesses and agricultural producers purchase and install renewable energy systems and make energy efficiency improvements.

Eligible projects include certain wind, solar, biomass, ocean, geothermal and hydroelectric projects. The energy efficiency component addresses improvements to a building, facility or process that reduces energy consumption, or reduces energy consumed per square foot. Eligible projects must (a) involve a pre-commercial or commercially available and replicable technology, (b) be technically feasible, (c) be located in a rural area, (d) be owned and controlled by the applicant and (e) generate sufficient revenues to provide for operation, management, maintenance and debt service. Loan guarantees and grants can be used for the purchase and installation of a renewable energy system or energy efficiency improvement, which includes post-application purchase and installation of equipment, post-application construction or project improvements, energy audits and assessments, permit and license fees, professional service fees, retrofitting and, in the case of loan guarantees, working capital and land acquisition.

Loan guarantees can be used to finance up to 75% of the total project cost with a maximum guarantee amount of $25 million per project.

Grants are limited to 25% of the project cost up to $500,000 for renewable energy systems and $250,000 for energy efficiency improvements. Applicants may also seek a combination of loan guarantees and grants. Feasibility study grants are limited to $50,000 or 25% of the study cost, whichever is less.

Other eligibility requirements include completion of an environmental-review process, various limitations on non-U.S. technology and satisfaction of certain financial need prerequisites.

Scoring criteria will be used to evaluate applications, with various criteria taken into consideration and assigned specific weighting factors. Examples of these criteria include technical merit, quantity of energy produced or saved, financing readiness, commercial availability, applicant size, return on investment and project size.

Application submittal deadline is July 31, 2009. Completed applications must be received by the appropriate USDA office (not postmarked) by the July 31st deadline to be considered.