The U.S. Department of Agriculture announced Tuesday it will provide $9.7 billion in grants for rural electrification, and $1 billion in partially forgivable loans for renewable energy projects in rural communities.
“This represents the single largest investment in rural electrification since President Franklin D. Roosevelt signed the Rural Electrification Act into law in 1936,” the USDA said in a news release.
The funding comes from the Inflation Reduction Act. The $9.7 billion will be administered under the Empowering Rural America, or New ERA program, and will provide funding to rural electric cooperatives to reduce greenhouse gas emissions by deploying renewable energy, zero-carbon systems and carbon capture technology.
According to the Department of Energy’s Interagency Working Group on Coal & Power Plant Communities & Economic Revitalization, the funding can also be used for generation and transmission efficiency improvements.
The National Rural Electric Cooperative Association on Monday praised the program after guidance for access to the funding was posted in the Federal Register. CEO Jim Matheson called it an “exciting and transformative opportunity for co-ops and their local communities.”
“USDA has smartly structured this program in a way that will help electric co-ops leverage new tools to reduce costs and keep energy affordable while meeting the future energy needs of their rural communities," he said.
The $1 billion in partially forgivable loans is available under the Powering Affordable Clean Energy, or PACE program. Up to 60% of loans will be forgiven for renewable energy storage projects and generation projects that use large-scale solar, wind, hydropower, geothermal or biomass.
Both programs require applicants to submit a letter of interest to the USDA. Applications for the New ERA program funding can be submitted from July 31 to Aug. 31, and applications for the PACE program funding can be submitted from June 30 through Sept. 29.