Federal rural energy program supports solar projects

WASHINGTON, D.C. – The installation of solar panels has become one of the most popular activities financed in part by the U.S. Department of Agriculture's Rural Energy for America Program (REAP).

A webinar sponsored by the non-profit Solar United Neighbors (SUN) informed attendees about the opportunities that REAP offers for farms and small rural businesses. Presenters from five states reviewed the basics of solar energy and shared their experiences in overseeing installations.

SUN's regional field director Autumn Long, who is based in West Virginia, discussed the technology and economics for rooftop and ground-mounted solar systems suitable for barns, shops, homes, and small businesses. She said system warranties from manufacturers usually cover 25 to 30 years.

Funding Opportunities

Long pointed out that funding of $250 million per year is available through 2023 for energy efficiency and renewal projects that include solar installations. In general, the funding is available to property owners who derive at least 50 percent of their gross income from agricultural activities and who live in municipalities with a population of less than 50,000.

The popularity of solar with the REAP funding is indicated by the fact that 31 or 42 projects in fiscal 2019 and 44 of 68 in fiscal year 2020 in Indiana were for solar energy – many of them for grain dryers. In Pennsylvania, 38 of the 50 projects funded in fiscal year 2020 were for solar while in West Virginia solar installations accounted for 90 percent of the REAP projects in the past year.

In southeast Ohio, where Sarah Conley-Ballew is the sustainable energy solutions program director for the state's Rural Action organization, poultry farms and a small trailer sales businesses have been among the recipients. She described the scoring sheet for the competitive grants which can fund up to 25 percent of a project.

The hard copy applications are reviewed in March and October for potential funding. Applicants working with Ohio's Rural Action have enjoyed a 90 percent success rate for funding, Conley-Ballew reported.

Application Challenges

One drawback is the length and extent of the application process, Conley-Ballew acknowledged. The application, often exceeding 100 pages, “is very technical and can be daunting” for anyone not familiar with the process, Prosperity Ag managing partner Christi Southerland agreed.

Based in Indiana, Prosperity Ag has been in business since 2007 to help applicants “save lots of time” through the grant writing service that it offers in 38 states, Southerland stated. “We do dozens of applications per round (March and October).”

It usually takes 60 to 90 days to learn if an application is funded, Southerland noted. She said tax and business documents sometimes create a hurdle in the application.

With federal funding, another surprise for most applicants is the requirement to obtain a DUNS number and a Cage Code that enables direct deposit of funds to a bank account, Southerland observed. She commended the USDA representatives she has worked with for their cooperation on processing the applications.

Minnesota's Cooperative Venture

In Minnesota, clean energy resource steering teams were created to coordinate with REAP funding through a state program titled Property Assessed Clean Energy (PACE), according to program manager Fritz Ebinger of the state's Extension Service.

Ebinger reported than more than 300 loans have been completed under PACE – most of them for farms but also for multi-family housing, an electric vehicle station, non-profit organizations, and a place of worship.

Rather than looking to solar as the first option in addressing energy concerns, Ebinger advises looking at efficiency first by replacing outdated equipment and changing to a different type of lights. He noted that the PACE projects enjoy a accelerated depreciation of five years.

Multiple Entity Projects

In West Virginia, niche farms, Main Street businesses, growing tunnels, greenhouses, and cold storage units have been among the 15 to 30 annual recipients thorugh the USDA's Rural Development program, according to rural business service specialist and energy coordinator Jesse Gandee. “Each of our 55 counties has had a project,” he said.

Whether the application is viewed as “onerous or simple,” Gandee assured potential applicants that “most of them succeed.” He commended banks and credit unions for working with the program and cited the 26 percent federal tax credit that is still in effect along with a federal guarantee of 75 percent to lenders on approved projects.

In Pennsylvania, where Rory Piermattei is the USDA's Rural Development program loan specialist for 12 counties, the recipients have included farms (dairy, poultry, fruits and vegetables), a feed mill, a veterinary hospital, a hydroponic garden, a winery, and an anaerobic digester. He suggested looking at LED lighting for dairy farms, businesses, and factories.

Piermattei predicted the development of solar farms for investors from outside of a local area. He noted farm tillage equipment businesses, golf courses, and gambling casinos are not eligible for the application levels of up to $20,000, $80,000, or $200,000 either from state or national funds.

All of the presenters promised to help applicants who are not in the official territory that they oversee or to refer them to the proper person or office in their home area. Ebinger invited interested persons in Wisconsin and Iowa to contact him for help in considering an application.

To view the webinar, which provides the contact information for all of the presenters, go on the www.solarunitedneighbors.org/REAP website. For more information about the organization, send an e-mail to along@solarunitedneighbors.org.