Illinois Rural Development poised for ‘historic investment’

CHAMPAIGN, Ill. — Rural Illinois stands to benefit from increased funding and changes in the Rural Energy for America Program.

U.S. Agriculture Secretary Tom Vilsack recently announced that $300 million, including $250 million from the Inflation Reduction Act, is available nationwide.

“This is an historic investment,” said Betsy Dirksen Londrigan, Illinois State Rural Development director. “The amount being made available this year compounds our capabilities. It’s a program that in Illinois is consistently oversubscribed. It means we’re going to be able to help more people.”

REAP provides farmers and small rural businesses with grants and guaranteed loans to develop renewable energy systems and to improve energy efficiency. The application deadline for fiscal year 2023 is March 31.

Callie Heidbreder, Illinois Rural Development business programs specialist and rural energy coordinator, explained that REAP applicants previously could apply for up to 25% of total eligible project costs, but that has increased to up to 40% of those costs thanks to the additional funding.

In addition, maximum grant amounts have also doubled, Heidbreder said, from $250,000 to $500,000 for energy efficiency improvements. Likewise, the maximum for a renewable energy system request has increased from $500,000 to $1 million.

“There are definitely greater thresholds available and an ability to take more dollars out to the applicants in Illinois,” Heidbreder said.

The rural energy coordinator anticipates Illinois Rural Development may receive more project applications sparked by the amount of available funding.

Heidbreder related she was speaking with a farmer focused on an energy efficient grain dryer. Although he also had been considering a solar project, the farmer wasn’t aware of the additional funding available.

“He said, ‘Does it make sense to look at solar?’” she recalled. “I think we will see more examples like that as people, who have been thinking about these types of projects, needed an extra nudge to pull the trigger and make those possible for their operations.”

Dirksen Londrigan pointed out important REAP changes now apply to cooperatives. Electric and telephone cooperatives may now receive direct payment in lieu of federal tax credits for installation of certain renewable energy projects, the state director said.

For example, if a cooperative is installing a solar project, it may apply for REAP and potentially receive a direct payment, reducing the overall payback of the system.

“Typically, (cooperatives) don’t have a tax liability. This is an incentive because they can receive a direct payment. That’s an important change,” Dirksen Londrigan said.

Heidbreder offered three examples of Illinois REAP projects funded in fiscal 2022.

The Lacon Rehab and Nursing LLC in Lacon operates a skilled nursing and sub-acute rehabilitation facility. It received funding to buy and install a 556-kilowatt solar array to help power the business and save more than $41,300 annually.

A Bureau County farmer received funding to buy and install an energy efficient electric irrigation motor. The farmer anticipates saving more than $4,300 each year and replacing 110,898 kilowatt hours or 59% annually.

A McHenry County farmer received funding to buy and install an energy efficient grain dryer and will save more than $52,300 per year in energy costs and replace 1.113 million kilowatt hours or 39% annually.

Heidbreder encouraged interested applicants to email her at Callie.Heidbreder@usda.gov to ensure they and the project they are considering are both eligible “before they get too far down the road.” Information also is available online.

In addition, state and local governments, federally recognized tribes, land-grant universities or other higher education institutions, rural electric cooperatives, public power entities and Resource Conservation and Development Councils may apply for grants to conduct energy audits and provide development assistance.

This story was distributed through a cooperative project between Illinois Farm Bureau and the Illinois Press Association.