Grants for installing renewable energy systems and for making energy efficiency improvements are available from USDA-Rural Development.

The grant funds may be used to pay 25 percent of the eligible project costs, with a minimum grant request of $1,500 (total project cost of $6,000) and maximum grant request of $250,000 for energy efficiency improvement and $500,000 for renewable energy systems.

Agricultural producers and ginners may apply. Eligible energy efficiency improvements are any improvements to a facility, building or process that reduces energy consumption. These may include more efficient systems or system components for lighting, heating, cooling, refrigeration/freezing, drying, ventilation, pumping, commodity handling, insulation, processing, manufacturing, etc.

Agricultural tillage equipment, used equipment and vehicles are not eligible. Energy efficiency projects require an energy audit.

Eligible renewable energy systems must produce usable energy from a renewable energy source. These may include biomass, methane digester, solar, wind, geothermal, gasification, or hydroelectric. Renewable energy projects require a business plan/feasibility study.

Costs of the required energy audit or business plan/feasibility study, as well as the costs for other professional services (engineering, technical assistance) incurred in the grant application process are eligible project expenses.

Applicants should have a goal to reduce energy consumption by at least 20 percent, with 35 percent or greater desired for maximum points (or replacement of 50 percent or greater for renewable energy systems).

Small businesses with fewer than 15 employees and less than $1 million in annual receipts are given top priority for funding. Businesses with fewer than 500 employees, including all affiliates and subsidiaries, are eligible to apply. Some business categories also have to meet certain Small Business Administration definitions based on value of gross annual sales (up to $27 million).

The application process may take 30 days or more, depending mostly on the energy audit/feasibility study schedule.

Applications for 2010 funding are now be accepted and the application deadline has not yet been announced.

Only costs of eligible improvements purchased and installed after the date of complete application being received by USDA-RBCS (Rural Business-Cooperative Service) state office are eligible for grant reimbursement, assuming the grant is eventually funded.

Applications go through a national competitive process and final approval is based on how your application competes against others across the United States. Approval is not guaranteed and final word of funding status may not be received for several months after making application. An applicant may begin their retrofits as soon as the final grant application is sent to RBCS. However, incurring expenses prior to funding approval would be at applicant’s own risk.

All interested Mid-South applicants should contact Ag Energy Resources, e-mail AER@msrcd.org, 601-748-2622. Leave your name, complete mailing address, at least one phone number, and an e-mail address if applicable.

AER will assist interested agricultural producers and rural small businesses in the grant application process. This assistance includes conducting the required energy audit.