Get Your Fair Share
Looking to reduce your energy bills? There's never been a better time to pursue grants and incentives for energy efficiency and renewable energy investments.
January 19, 2011
The solar energy systems Blooming Nursery and Iwasaki Brothers put in are inspiring and the returns are really attractive. While they're located in Portland, a progressive metro area, you don't have to live in Oregon to take advantage of a wealth of state and federal grants and incentives to dramatically improve your energy efficiency or switch to renewable fuels. Now is the time to explore funding programs.
The most common energy efficiency projects for growers are lighting upgrades, energy curtain systems and new heating systems. Many utility companies offer incentives and assistance because 30 of 50 states have renewable portfolio standards that require energy providers to draw a percentage of their energy from renewable sources. A number of states also set aside federal American Recovery and Reinvestment Act money for programs that help businesses invest in energy systems, too.
One easy-to-use, comprehensive source of information on state, local, utility and federal incentives and policies is DSIREUSA.org. Funded by the U.S. Department of Energy, DSIRE stands for Database of State Incentives for Renewables and Efficiency.
Many growers have secured competitive grants through USDA's Rural Energy for America Program (REAP), which covers up to 25 percent of the total eligible project costs. In addition to the grants, REAP loan guarantees can help finance an additional 50 percent of eligible project costs. The maximum grant available is $500,000 for renewable energy projects and $250,000 for energy efficiency improvement projects. Projects seeking less than $20,000 were a priority last year.
Sustainable Energy Financing (SEF), a new company that bought grant-writing firm Viability in Holland, Mich., has helped 30 growers navigate the process with a 60-percent success rate on competitive grants. The key to landing competitive grants is understanding the scoring system, SEF founder Dan Kuipers says. "We have a historic baseline of what type of score is needed to get funds. We can prescore potential applicants by having them answer 8-12 questions, give a likely score and see if it makes sense to pursue the grant."
For instance, energy efficiency projects that conserve at least 50 percent of the energy used receive more points than energy replacement and energy generation projects under REAP. "Last year, a tremendous number of grain dryer projects in Iowa and Illinois received grants because they score so well," Kuipers says.
USDA is expected to announce the next REAP cycle in March or April and then applicants will have 60 days to apply. Submissions will be evaluated over the summer with funds awarded in the fall. Growers should piece proposals together leveraging multiple state and federal sources and treat the REAP grant more as a bonus. For instance, Iwasaki applied for REAP with a different grant writer and didn't get it, but that didn't harm the project.
Renewable energy incentives are most promising, Kuipers says. The Department of Treasury's 1603 program is a federal tax credit of 30 percent of the project's cost or a cash grant upfront. After-market incentives are renewable energy credits that can be sold and selling electricity back to utility grids. There are two revenue streams - the sale of electricity and the sale of renewable attributes.
"The value of a solar renewable energy credit is three times as valuable as the electricity savings," Kuiper says. "Growers who aren't landlocked can become solar farmers and use land not being used for greenhouses to farm the sun. Depending on the state you're in, you can sell the energy or just use the electricity."
These types of incentives apply to wind-powered energy investments, too. Biomass heating systems continue to be a hot area, as well. Now is the time to look into it. Visit DSIREUSA.org or contact Sustainable Energy Financing at 616-396-6101.