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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. Beneficial electrification and renewable energy projects are also eligible. The updated rulemaking for the program was released in April 2020.
The current application window opened in December 2020 with approximately $90M in loan capital available. The funds are available until expended.
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. 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 on-bill financing programs – those backed by RESP capital and those that are not. EESI is currently working with several electric co-ops 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 afford energy upgrades and beneficial electrification.
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 can justify the cost-effectiveness of the measures for the end-user.
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.
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 through 2023 by the 2018 Farm Bill. The reauthorization included the following changes:
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