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The Rural Energy Savings Program (RESP), run by the U.S. Department of Agriculture (USDA) Rural Utilities Service (RUS), provides rural electric cooperatives and other rural utilities with zero-percent loans to launch or expand energy efficiency financing programs for their members. RESP is also available to green banks, community development finance institutions, state agencies, and nonprofits that provide services in rural areas. Beneficial electrification and renewable energy projects are also eligible. The updated rulemaking for the program was released in April 2020.
Applications are accepted on a rolling basis and reviewed in the order they are received. There is approximately $100 million available per year.
During the application window, interested utilities must submit a Letter Of Intent (LOI) that provides basic utility information and sketches out how the funds would be used. The application window is currently open. RUS reviews the LOIs on a first-come, first-serve basis. RUS then invites selected applicants to proceed with a full application. EESI offers application assistance to utilities at no-cost.
The Environmental and Energy Study Institute (EESI) is a nonprofit that provides no-cost assistance to rural electric co-ops, other utilities, green banks, and state agencies offering services in rural areas. EESI’s project team can help with all aspects of a RESP application including: Letter of Intent (LOI) templates, case studies, and lessons learned from past applicants and awardees.
EESI also assists utilities to develop, green banks, and state agencies on-bill financing programs – those backed by RESP capital and those that are not. EESI is currently working with several electric co-ops, rural municipal utilities, and green banks to design on-bill programs, secure financing, and develop technical documents.
RESP supports the creation and expansion of on-bill financing programs (including on-bill tariff programs), where energy investments are repaid via the utility bill with no upfront costs, to help rural utility members/customers access and afford clean energy upgrades and beneficial electrification. The loans can be used for a variety of measures, including building envelope upgrades, on- and off-grid renewable energy systems, lighting, water and waste efficiency, irrigation and permanently installed energy storage devices. Beneficial electrification projects are also eligible.
Newer on-bill financing programs are designed to broaden accessibility from traditional financing programs by assigning the loan or charge to the meter, allowing the investment to transfer to the next occupant. These programs approve applicants through bill payment history instead of credit scores, and prioritize cost-effectiveness and flexibility.
RESP loans can be used for a variety of measures, providing the utility or eligible borrower can justify the cost-effectiveness of the measures for the end-user.
Utilities can even apply for funds to fully replace manufactured homes.
Rural electric cooperatives, rural utilities, and a group of rural utilities serving a census-designated place with a population of 50,000 or less are the main recipients of RESP funds.
Rulemaking in 2020 expanded eligible RESP borrowers to include nonprofits, green banks, community development financial institutions (CDFIs), credit unions, state agencies, state housing financing authorities, and for-profits that provide services in rural areas. In 2022, the Hawaiʻi Green Infrastructure Authority (HGIA) became the first green bank in the country to secure a RESP loan. The $20 million loan helped HGIA expand its current Green Energy Money $aver (GEM$) on-bill program to include battery storage, heat pumps, energy efficiency measures, and electric vehicle supply equipment, in addition to solar energy.
Beneficial electrification is a term for replacing direct fossil fuel use (e.g., propane, heating oil, and gasoline) with electricity in a way that reduces overall emissions and energy costs. RESP has already funded several beneficial electrification projects – including ones that finance heat pump conversions and electric vehicle charging infrastructure. However, RESP funding cannot be used to finance electric vehicles themselves.
EESI developed the Beneficial Electrification Toolkit, as a free online resource, to help utilities and stakeholders turn a general interest in beneficial electrification into a concrete program.
Created by the 2014 Farm Bill, and launched in 2016, RESP helps rural households and small businesses achieve energy cost savings by implementing sustainable, cost-effective energy measures. RESP was reauthorized by the 2018 Farm Bill. The reauthorization included the following changes:
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