What to Know About REAP Grants
Most solar projects utilizing REAP solar grants pay for themselves in the first year. That’s one heck of an ROI!
The program application period is now open for fiscal year 2024.
Application Windows:
March 31, 2024 | June 30, 2024 | September 30, 2024
What is the REAP program?
Otherwise known as the Rural Energy for America Program, the USDA REAP grant was started in 2008 to provide funding for installing renewable energy like solar panel systems to eligible rural small businesses and agricultural producers. The USDA instituted the program to increase energy independence in the U.S., decrease the energy expenses for rural agricultural producers and businesses, create skilled jobs, and generate a higher supply of clean energy. In 2023, the budget and scope of the REAP program was dramatically expanded, and agricultural operations and rural businesses can now receive a grant totaling 50% of total project costs to install solar energy systems.
Small businesses (as defined by the SBA for your business type) doing any type of work who are located in communities with under 50,000 people are qualified. Agricultural producers located anywhere (rural or urban) who make at least 50% of their gross income from agricultural operations can also apply for the REAP grant to help cover the cost of installing solar panels. Contact us at Cromwell Solar to see if your business is qualified.
Our 40 years of experience makes us experts in securing solar incentives like tax credits and grants. Cromwell Solar will make sure your project gets all the benefits it is entitled to.
Cromwell Solar has a history of obtaining and maximizing REAP grants for installing solar for our clients dating back more than a decade to the early days of the program. We understand what is needed in the application and how to avoid pitfalls that could get an application disqualified.
What is the Federal Solar Tax Credit?
Recently increased to a value of 30% of the project cost, the Federal Business Energy Investment Tax Credit (Federal Tax Credit aka the ITC) provides a healthy solar tax credit that now can be sold or rolled over to future years if the tax liability doesn’t exist the year the solar is placed in service. The American made solar panels Cromwell Solar uses qualify for an additional 10% tax credit for a total of a 40% solar tax credit. This solar incentive is taken on the full cost of the project before other incentives and is stacked with the REAP grant without losing any value.
What is Bonus Depreciation?
To further encourage solar energy, the government offers enhanced depreciation benefits for solar panels. As with other kinds of bonus depreciation, a business can write off a significant amount of the cost of eligible assets up front. For instance, half of the value of the federal tax credit can be depreciated despite it not being a net cost. For solar panel installations, bonus depreciation allows almost all clients to fully deduct the costs in year one even though the solar system has a 40+ year lifespan.
Always seek advice from your tax professional regarding any tax issues.
There is no obligation and you’ve got nothing to lose… except high energy bills!
What Are the Benefits of Going Solar?
Solar Panels Save Energy. Power generated will pay for the cost of the solar system typically in only 2 years. Meanwhile, the system’s lifespan is expected to be 40+ years. Due to constantly increasing electric rates, the value of the energy you save with solar actually grows every year.
Potential Property Value Increase. Studies by the Appraisal Institute and others show solar energy systems can increase a building’s value.
Good Impression. Solar energy is viewed favorably by many customers, and businesses with solar panels are seen as forward-thinking, technologically savvy, and financially stable.
Attracting and Retaining Clients. Our clients report that installing solar energy helps satisfy both their and their clients’ environmental goals. Proposed federal rules would require federal contractors to provide “climate disclosures” and keep their environmental footprint low to qualify for work. Soon, installing solar on your or your subcontractors’ facilities will be more important than ever.