A Guide to U.S. Department of Agriculture (USDA) Financing Opportunities for Clean Technology and Renewable Energy Projects


With decades of loan guarantee experience, in-depth knowledge of the rural and agricultural markets central to many renewable energy projects, and relatively stable congressional funding, the U.S. Department of Agriculture (USDA) is poised to play a pivotal role in financing renewable energy projects in 2011 and beyond.

USDA's financial assistance programs have something for everyone, from biofuels and biopower to solar, wind, tidal, geothermal, and energy efficiency projects. The 2008 Farm Bill (the Food, Conservation, and Energy Act of 2008) authorized several USDA programs that provide grants and loan guarantees of interest to developers of renewable energy and energy efficiency projects. The programs, often referred to by the Farm Bill sections in which they are found, include the following:

*Section 9003: Biorefinery Assistance Loan Guarantee Program – Loan guarantees for the development and construction or retrofitting of commercialscale biorefineries to produce advanced biofuels. Size of guaranteed loan can be up to $250 million.

*Section 9005: Payments to Eligible Advanced Biofuels Producers Program – Payments to producers of advanced biofuels to encourage expanded production of such biofuels.

*Section 9007: Rural Energy for America Program (REAP) – Loan guarantees for the development and construction of renewable energy systems or energy efficiency improvement projects. Also includes grants for energy audits and renewable energy development assistance and feasibility studies. Loan size is limited to $25 million and grant size is capped at $500,000. Applicants must be rural small businesses or agricultural producers.

*Section 9008: Biomass Research and Development Program – Grants for research consortia (which can include companies) to study feedstock development, biofuels and biobased products development, and biofuels development analysis for up to four years.

*Section 9011: Biomass Crop Assistance Program (BCAP) – Payments to agricultural and forest land owners and operators to assist with the collection, harvest, storage, and transportation of eligible biomass 1 material for use in a biomass conversion facility; and payments to producers of eligible biomass crops used for conversion to bioenergy in selected BCAP project areas.

Additionally, USDA’s longstanding Business & Industry (B&I) Guaranteed Loan Program provides credit enhancement for small- and medium-sized rural commercial projects that might not qualify under the Farm Bill programs listed above. In most cases, the B&I program limits the eligible loan size to $25 million, but it may be combined with other USDA assistance (e.g., the REAP program).

Finally, USDA’s Rural Utility Service provides loan guarantees to rural power supply providers such as cooperatives to finance distribution, transmission, and renewable energy projects, including solar, wind, hydropower, biomass, and geothermal projects.

The table below serves as a guide to program eligibility by clean energy sector, with further information on each program included in subsequent sections of this booklet.

Please see full publication below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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