How the US Department of Agriculture can help your business or farm go solar
As a rural small company ourselves, we are uniquely attuned to the challenges that come with operating a business in the mountains. We know it isn’t easy. We’ve seen the transformative benefits that a solar installation provides small business owners. Businesses can reduce electricity costs and free up resources for other pressing needs – and there are always other pressing needs!
We love finding creative ways to help more folks go solar. One area where we’ve had considerable success has been through the U.S. Department of Agriculture’s Rural Energy for America Program (REAP).
The REAP Grant provides financial assistance to agricultural producers and rural small businesses for a variety of clean energy projects, including solar installations. Grants are awarded on a competitive basis and are not guaranteed. If your business qualifies, you could be eligible for a grant of up to 25% of the final project costs, including solar panels, engineering, and installation.
In addition to potential grant funds, your business may also be able to take advantage of the Solar Investment Tax Credit (ITC).* This tax credit currently allows businesses to lower their tax bill by 26% of the full system cost, but this benefit is decreasing. In January of 2021, it will step down to 22% and then steps down even further to 10% in 2022.
Businesses that go solar can also utilize accelerated depreciation–allowing you to quickly recover costs associated with a solar investment, and shorten your payback period. When businesses are able to combine a REAP Grant with the solar tax credit and accelerated depreciation, it adds up to big savings — as much as 70% for some of our clients!
We know that applying for grants can feel intimidating or overwhelming, so please let us help!
If you think you might fit the criteria for the REAP program, our team would be happy to help you gather and submit all of the necessary documentation. In fact, we have an in-house grant writer to help you. Her name is Abby, and she’s fantastic at what she does! Read through the information below to determine if your business qualifies and we’ll help you submit the required paperwork to the Department of Agriculture.
Who may apply for the REAP Grant?
- Agricultural producers that have at least 50% of their gross income coming from agricultural operations. Agricultural producers may be in either rural or non-rural locations.
- Small businesses in rural areas.
What is considered a “rural area?”
The good news is that, in our part of the country, nearly everywhere is considered rural enough to apply for the REAP Grant. Enter your address through the USDA’s website to ensure that your rural business is eligible to apply. Within West Virginia, rural areas include downtown Huntington and downtown Morgantown (the cutoff is a population of 50,000). The only areas that aren’t considered rural are areas around Charleston (see map below).
In order to be considered for the REAP grant, the applicant must:
- Be financially solvent and able to provide at least 3 years of business tax records.
- Not be delinquent or have outstanding federal taxes.
- Be the property owner where the solar energy system is installed.
Think your small business could qualify?
Let us know that you’re interested in applying for the REAP Grant. We’ll go through the pre-qualification steps with you to determine if your business is an eligible candidate.
Once we confirm that your business is eligible to apply, we’ll work together to gather and submit the necessary documentation for your grant application.
The USDA has two application periods per year with deadlines to submit by either October 31st or April 30th. If you intend to apply for the REAP Grant, we will need to start the process with you by no later than 30 days prior to the application deadline.
*We encourage you to check with your tax advisor to determine your business’s eligibility for the Solar Investment Tax Credit.