The U.S. government will provide $1 billion in grants to help agricultural producers and rural small businesses invest in renewable energy systems and make energy efficiency improvements.

The grants will be provided under the Rural Energy for America Program (REAP) and funded by the Inflation Reduction Act (IRA). The U.S. Department of Agriculture (USDA) said it has started accepting grant applications starting April 1.

USDA will set aside at least 20% of the available funds until June 30 of each year for grant requests of $20,000 or less, including the grant portion of a combined grant and guaranteed loan request. This is intended to help promote smaller projects.

The maximum federal share of funding in a project will be up to 50% of the total cost for all energy-efficiency projects and zero-emissions renewable energy systems.

An award of up to 50% of the total project cost is also available for any project in a designated energy community and/or submitted by an eligible tribal entity.

All other projects can apply for grants of up to 25% of the total project cost. The maximum grant is $1 million for renewable energy systems and $500,000 for energy-efficiency projects.

USDA will hold competitions quarterly through September 30, 2024. The funding will also include the creation of the first underutilized technology fund in the REAP program, with $144.5 million available in dedicated funding.

The grants would be offered to projects that will help rural communities recover economically through better market opportunities and improved infrastructure, reduce climate pollution and increase resilience to the impacts of climate change, conserve and protect farmland, and invest in underserved communities.

USDA Secretary Tom Vilsack said, “When we invest in rural communities, we are supporting hard work that sends a ripple effect across our country. Clean energy is critical to the future of our economy, and the IRA provides the Biden-Harris Administration with the resources to build a more prosperous rural America while tackling the climate crisis and lowering energy costs.”

A recent report by the Energy Information Administration found that renewable energy sources, including wind, solar, hydro, biomass, and geothermal, exceeded coal-fired power generation in the sector for the first time in 2022 in the U.S.

The Indian government recently said that its policy to promote renewable energy use in fallow land and agricultural pumps had benefited over 200,000 farmers till now.