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  • Writer's pictureTom Kenny

New USDA PACE Program - Powering Affordable Clean Energy

The Powering Affordable Clean Energy (PACE) program is part of the Inflation Reduction Act, which represents the largest investment in rural electrification since President Franklin Delano Roosevelt signed the Rural Electrification Act into law in 1936. With $1 billion in funding, PACE helps make clean, affordable, and reliable energy accessible to the people of rural America. Under PACE, USDA Rural Development’s Rural Utilities Service (RUS) will forgive up to 60 percent of loans for renewable energy projects that use wind, solar, hydropower, geothermal, or biomass, as well as for renewable energy storage projects. PACE funding makes it more affordable for rural Americans to use clean, reliable energy to heat and cool their homes, run their businesses, and power their cars, schools, and hospitals.

The PACE program is available to eligible applicants that generate electricity for resale to residents in both rural and nonrural areas. However, at least 50 percent of the population served by your proposed renewable energy project must live in communities with populations of 20,000 or fewer. Eligible entities include: Corporations, states, and territories, along with their subdivisions and agencies Municipalities Utility districts Cooperatives Nonprofits Indian Tribes Alaska Native, regional, or village corporations Limited Liability Companies or other for-profit entities organized under the laws of any U.S. state or territory We will only accept one application from each eligible entity. However, eligible groups can collaborate to package their proposed projects into one joint letter of interest.

You must demonstrate that your proposed project is: Eligible Financially and technically feasible Securable Reliable and resilient (can recover quickly following an unexpected disruption) Affordable Able to be completed within the allotted timeframe

How can we use PACE program funds? You can use PACE funds to finance wind, solar, hydropower, geothermal, or biomass renewable energy projects. Energy storage projects related to a renewable energy project are also eligible. Projects must be based on bankable power purchase agreements (PPAs) or through a financial guarantee that ensures the financial feasibility of the project. Energy must be sold for resale to eligible off-takers which can include both utility and non-utility customers. The technologies used must be commercially available. PACE funding cannot support merchant power projects.

Provided the project is otherwise financially feasible, loan terms are the shorter of: 35 years the useful life of the equipment financed the term of the PPA, or the term of any leased real property

To be considered for funding, you must first submit a letter of interest (LOI). The application window is open June 30 – September 29, 2023, with applications processed on a rolling basis. Your LOI must arrive before September 29, 2023 We will evaluate LOIs as they are received If we invite you to submit an application and it meets all program requirements, your project will be considered for funding.


Grant Management Associates has years of experience with opportunities like this one. Contact us today for a consultation.

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