USDA's PART Energy Program: Up to $100M for Rural Renewable Energy Projects

A Major Loan Opportunity for Rural Energy Projects, With Up to 40% Forgiveness

If you work with a rural electric cooperative, utility, or energy provider, the USDA Rural Utilities Service just opened one of the more attractive financing opportunities we've seen in a while. The Powering Affordable Reliable Technology (PART) Energy Program is making approximately $410 million in budget authority available for rural renewable energy and energy storage projects, with individual awards ranging from $1 million to $100 million.

But here's the part that really gets our attention: up to 40% of these loans can be forgiven. That turns what looks like a loan program into something that functions a lot more like a grant, as long as your project meets the terms.

The deadline to apply is October 9, 2026, but don't let that date lull you into complacency. RUS is reviewing Letters of Interest on a rolling basis, in the order they're received. Earlier submissions get earlier attention.

What Projects Qualify?

The PART Program funds two types of projects under the Inflation Reduction Act of 2022:

• Power generation projects using Renewable Energy Resources (RER), such as solar, wind, or other eligible sources listed under Section 317 of the Rural Electrification Act
• Energy Storage Systems (ESS) that support those renewable energy projects

This isn't a program for fossil fuel upgrades or general utility infrastructure. The focus is squarely on renewables and the storage systems that make them reliable. Think solar-plus-storage installations, wind generation facilities, and hybrid systems designed to keep rural communities powered even when the sun isn't shining or the wind isn't blowing.

Understanding the Two Loan Types

The PART Program distinguishes between Project Loans and System Loans, and the cost-sharing rules are different for each.

Project Loans

For most applicants, PART will finance up to 75% of the total capitalized costs of a project. You'll need to bring at least 25% as cash or equity, and that match cannot come from debt instruments. So if you're planning to borrow money to cover your match, that won't work here.

There's an important exception worth knowing about: projects that benefit Substantially Underserved Trust Areas (SUTA) may be eligible for up to 100% financing. If your project serves tribal lands or similar underserved areas, definitely flag that in your application.

System Loans

PART System Loans can cover up to 100% of total project costs. These are structured differently from Project Loans and may be the right fit depending on how your project is organized and who owns the system.

The 40% Loan Forgiveness: What You Need to Know

This is the headline number, and it deserves a closer look. Up to 40% of the loan can be forgiven, but only if the awardee and the project meet all applicable terms and conditions for forgiveness. The program notice doesn't spell out every condition in plain language, which means your legal and financial teams need to read the full program guidance carefully before you commit to a project budget.

What we'd suggest: don't build your project's financial model assuming 40% forgiveness is guaranteed. Treat it as a potential upside, structure the project so it works at full loan repayment, and then plan to pursue forgiveness as a bonus. That's a conservative approach, but it protects you from a nasty surprise mid-project.

Who Should Apply?

The PART Program is administered by the Rural Utilities Service, which primarily works with entities that serve rural communities. Eligible applicants typically include:

• Rural electric cooperatives
• Public power utilities serving rural areas
• Certain municipalities and public utility districts
• For-profit and nonprofit entities that qualify under the RE Act's Section 317 provisions

If you're a rural co-op that's been eyeing a solar or storage project but struggling to finance it, this program was essentially designed for you. The combination of low-cost financing and potential forgiveness makes projects viable that wouldn't pencil out with commercial lending alone.

How the Application Process Works

The process has two stages, and you need to get the first one right before you move on.

1. Letter of Interest (LOI): This comes first. Submit your LOI as early as possible, since RUS processes them in the order received. Your LOI signals your intent and gives RUS a chance to assess your project at a high level before you invest time in a full application.
2. Full Loan Application: After your LOI is reviewed, you'll be invited to submit a complete application. This is where the detailed technical, financial, and legal documentation comes in.

One practical tip: start gathering your project documentation now. Energy project applications at this scale typically require engineering reports, environmental assessments, financial statements, and evidence of site control. These take time to pull together, and you don't want to be scrambling after your LOI is approved.

Why This Program Matters for Rural Communities

Rural electricity costs have historically been higher than urban rates, and reliability has lagged in many areas. Projects funded through PART aren't just good for the organizations building them. They translate directly into more affordable, more reliable power for rural households and businesses.

With $410 million available and awards going up to $100 million, this program can fund genuinely transformational infrastructure. A single well-structured project could power thousands of rural homes for decades.

The October 9, 2026 deadline gives applicants time to plan carefully, but the rolling LOI review means there's a real advantage to moving early. Funding at this scale doesn't last forever, and once the $410 million is committed, that's it unless RUS finds additional funds.

Get Started on GovGrantsUSA

Ready to take the first step? Create your free account on GovGrantsUSA to access the full PART Program details, track this opportunity through the application deadline, and get guidance on building a competitive Letter of Interest. Our platform gives you everything you need in one place, so you're not hunting across multiple federal websites trying to piece together requirements.

Rural energy projects are being funded right now. Don't leave $100 million on the table.