I’ve been working on a side project for one of the ranches I work with to install some form of renewable energy. Due to the ranch’s location, we have opted to install a photovoltaic (PV) solar energy production system. The ranch gets lots of sun every year, and less predictable wind.
Many of you with livestock are probably familiar with small scale PV systems that charge the batteries that electrify your cattle/livestock fences. Some of you might also have small solar panels on metering and reporting systems for outlying wells, your RTK systems, or weather stations. In my case, we are looking at a much larger system for the entire ranch including 3 homes and a large implementation and equipment barn.
Why Go to the Hassle?
Its simple; you don’t have to be a big environmentalist for a PV system to make sense on your farm or ranch. All you need is a willingness to making long term investments that improve your operations bottom line. (I’ve never met a farmer that didn’t make long term investments in his/her operation) PV systems eventually lead to “free power” after they pay for themselves and a typical system can last 25 to 30 years. With current incentive programs, PV systems are more affordable than ever which leads to quicker payoffs. This means a short period of time until the system actually starts providing free power to your agribusiness or farm enterprise. In some cases we are talking about 4 to 6 year pay offs.
Depending on the overall cost of your system, due to your needs, and depending on the some interesting incentives programs, PV has become relatively cheap. Part of what contributes to the “cheapness equation” is your local power costs. These have been historically low in the US, but as we know from last year’s fuel prices, the US really isn’t in control of our energy costs. Much of the power generated in the US is created by burning fossil fuels that we buy from foreign nations.
USDA Grants REAP Rewards
If you are contemplating a similar alternative renewable energy system installation for your farm or ranch, you should know that the Rural Development division of the USDA is currently accepting applications for grant money and guaranteed loans under programs called REAP/RES/EEI. (Rural Energy For America Program Grants/Renewable Energy Systems/Energy Efficiency Improvement Program) The deadline is July 31 2009, so you’re going to have to get moving on this one.
According to the USDA, “REAP/RES/EEI Grants Program will provide grants for energy audits and renewable energy development assistance. It also provides funds to agricultural producers and rural small businesses to purchase and install renewable energy systems and make energy efficiency improvements.”
How much are the REAP grants?
The grants are awarded on a competitive basis and can be up to 25% of total eligible project costs. Grants are limited to $500,000 for renewable energy systems and $250,000 for energy efficiency improvements. Grant requests as low as $2,500 for renewable energy systems and $1,500 for energy efficiency improvements will be considered. At least 20% of the grant funds awarded must be for grants of $20,000 or less.
Who is eligible?
The program is designed to assist farmers, ranchers and rural small businesses that are able to demonstrate financial need. All agricultural producers, including farmers and ranchers, who gain 50% or more of their gross income from the agricultural operations are eligible. Small businesses that are located in a rural area can also apply. Rural electric cooperatives may also be eligible to apply.
What kinds of projects are eligible?
Most rural projects that reduce energy use and result in savings for the agricultural producer or small business are eligible as energy efficiency projects. These include projects such as retrofitting lighting or insulation, or purchasing or replacing equipment with more efficiency units. Eligible renewable energy projects include projects that produce energy from wind, solar, biomass, geothermal, hydro power and hydrogen-based sources. The projects can produce any form of energy including, heat, electricity, or fuel.
For all projects, the system must be located in a rural area, must be technically feasible, and must be owned by the applicant.
How does the B&I Guaranteed Loan Program compare to the Rural Energy for America Program Guaranteed Loan and Grant?
How Can I Apply
To apply for funding for the REAP Grant Program, please contact your Rural Development State Office.
Combined Incentives = Big Savings
Combine the REAP program with other existing federal incentives and state programs (state programs vary) and you might just get a system for pennies on the dollar. As a result of the recent stimulus legislation, there is currently a 30% federal incentive which can be taken as a tax credit or in a cash rebate form. The rebate is to be paid by the Treasury within 60 days of the date on which the solar equipment is installed or the date the owner submits an application, whichever is later. Installation must occur prior to 2011. -If you haven’t looked at solar in a while, this is a big new change! There are also interesting equipment depreciation benefits. Also, be sure to check with your state government to see what they are offering. Many states are racing right now to be called the “greenest” and are coming out with some substantial buyer’s incentive programs
In the case I am working on, the Fed is providing for 30%, the state is providing 35% and IF the REAP incentives are granted (questionable in our case) the rancher will receive an additional 25% incentive which combines to a total of 90% off the purchase and installation price. Wow!
• For more information on the REAP program, contact your local Energy Coordinator
• For more information on State Programs visit http://www.dsireusa.org
• For more information on Federal Programs visit http://www.energy.gov/taxbreaks.htm
This post original appeared on Alex Tiller’s blog.
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