It Pays to be Rural

Central Oahu doesn’t feel like it’s out in the sticks. But in the U.S. Department of Agriculture’s mind, it is, as least if you are a small business. Whether you are in Pearl City or Molokai, you are eligible for the same grants and loans.

The USDA’s Renewable Energy Systems and Energy Efficiency Improvements Program (Section 9006) awards loans and grants to rural small businesses installing environmentally conscious projects. Small businesses are defined by the Small Business Administration’s guidelines and its rural designation decided by the U.S. Census Bureau. In Hawaii, that’s everywhere except for Honolulu, from Red Hill to Makapuu Point, south and west of the Koolaus.

For renewable energy projects, grants are up to $500,000, but cannot exceed 25 percent of the total project cost. Loans are up to $10,000,000, but cannot exceed 50 percent of the total project cost. Projects can combine a loan and a grant, but, in that case, the combination cannot exceed 50 percent of the total cost. For example, a $100,000 solar energy project is eligible for a $250,000 grant and a $250,000 loan. Current renewable energy systems supported by the program include biomass, anaerobic digester (waste into energy), geothermal, hydrogen, wind and solar installations.

Grants are selected in a nationwide competition for funds, while loans are available at any time. Separate applications are required for each project and can be submitted only once per year.

Timothy O’Connell, assistant to the state director and rural energy coordinator for the USDA’s Hawaii State Office, says most people forget that the program supports energy-efficiency improvement programs. These can include installations of CFL light bulbs and energy-efficient air conditioners. With a combination of both programs, in one year, a business can receive $500,000 for a renewable energy project and $250,000 for an energy-efficiency project.

Businesses that have participated in the program include the Molokai Drug Store and Hotel Honokaa on the Big Island.

For more info, visit: www.rurdev.usda.gov/rbs/farmbill

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