REAP Funding Extended to 2025

The Rural Energy for America Program (REAP), designed to apply government funds to help small businesses in rural communities get the financing they need to improve operations, has been renewed for 2025!

13 Independent Grocers Alliance (IGA) members have already submitted applications for $6.6 million in projects and roughly $3 million in grant funding. More than $1 million in funding has been approved so far for the 2024 fiscal year,* and more funding approval is expected by December 31, 2024. With the renewal for 2025 fiscal year confirmed, nearly 2,000 IGA members have the opportunity to receive some of the $2 billion allocated for the program to upgrade their stores.

Common projects include refrigeration system upgrades, lighting upgrades, HVAC upgrades, solar projects, and even envelope (doors, windows, ingresses and egresses).

"Funds can be used for any project where an energy reduction can be substantiated or for renewable energy projects, which is why we recommend considering REAP if you plan any remodel or retrofit in next 36 months," said Jonathan Tan, co-founder of Ratio Institute, a non-profit that works with over 1,000 grocery stores and chains to create store-level and enterprise sustainability solutions, said. "Thus, upgrading refrigeration systems, refrigerants, and equipment can not only reduce operational costs, but it can help address pending action from the AIM Act (2020), which orders the production of HFCs to be phased down 79% by 2029 and 85% by 2036."

Tan encourages retailers to submit their applications by December 31, 2024 if possible.

"There is a national pool of monies held over from last fiscal year," he said, adding that if retailers cannot get into the December 31, 2024 pool, they should aim to get something in prior to September 30, 2025 (the end of REAP's 2025 fiscal year).

Are you eligible?

The REAP grant is for stores in communities of less than 50,000 people, so plug in your store address to the USDA-eligible rural area map here. You should have less than 500 employees and less than $40 million in annual revenue per store location.

How do you apply?

1. Perform an Energy Audit

If your store is eligible, the next step is to complete an energy audit. As IGA’s sustainability partner, Ratio Institute can do that at a reduced cost for Independent Grocers Alliance members ($500 invoiced by IGA). They will identify where your store is consuming the most energy and propose solutions to solve them. Complete this form to access a benchmarking survey, which takes about 15 minutes, and provide us with a minimum of 12 months’ worth of the following bills:

• Electric bills
• Gas (heating) bills
• Water and sewer bills
• All solid waste and recycling bills or credits
• Any other municipal services bills

After Ratio Institute receives the assessment and bills, they will calculate:

• Realized savings: value in dollars and avoided greenhouse gas (GHG) of existing in-place items
• Potential savings: value in dollars and GHG of process and/or upgrades to employ or deploy
• Best practices: value of additional technologies and refrigerant improvements in dollars and GHG
• Operational comparisons: how your store compares to a typical store of your size, plus other insights and recommendations based on these metrics

2. Get a Scope of Work from Your Contractor

Once the energy audit is complete, you can deliver it to your contractor to estimate a quote for recommended services. Ratio Institute can assist in the Scope of Work (SOW) development and consult with your contractor/vendor as part of the process to create the best project specific to each retailer's needs.

3. Submit Application to USDA

Finally, you will submit the energy audit and scope to the USDA via the application. Alternatively, Ratio Institute can submit the grant application on your behalf (Ratio Institute charges $1,000 for this service, which covers the $500 for the report and $500 for the initial application, plus 10% of the project costs based only on grant approval).

By the Numbers

While early adopters have jumped at the chance to use the grant funding to upgrade their stores, not all IGA members have taken advantage of this opportunity. Here's the current standing of IGA stores in the REAP application process:

• 47 IGA stores have completed the assessment 
• 13 applications for IGA stores have been submitted
• $6.6 million in projects submitted for $3 million in grant funding
• Over $1 million awarded this year to IGA members

Unique Opportunity

Retailers in certain locations may be able to receive free energy assessments due to unique funding opportunities secured by Ratio Institute. According to Tan, the organization has funding to pay for assessments and REAP applications before December 31, 2024 in the following states (the assessment and application funding here is first come, first served):

• Arkansas (9 stores)
• Florida (9 stores)
• Maryland (7 stores)
• Vermont (4 stores)

They also have funding to cover the cost of energy assessments for a few stores by December 31, 2024 in the following states:

• New Mexico
• Oklahoma
• Texas

If you're planning to remodel or retrofit any appliances in your store in the next 36 months, install solar or other renewable energy, adhere to HFC refrigerant legislation, or simply want to reduce costs through energy efficient operations, complete this form to get started with the energy assessment process.

*The REAP 2025 fiscal year runs October 1, 2024–September 30, 2025.