With energy costs ranking as one of the top concerns for greenhouse growers, it makes sense to take advantage of energy-efficient equipment and technology. But the cost of retrofitting or adding new equipment can be cost-prohibitive, and it’s often difficult to come up with the capital, even though the savings will be greater in the long-term.
This is where government utility-based incentives can play a role. These programs are designed to provide and incentive and make it more feasible for businesses to make investments in energy-saving technology, thus helping to reduce energy consumption overall. Incentives come in several forms. In order to take advantage of incentives, growers need to become educated about how to apply and what types of projects are usually funded.
Types Of Incentives
“There are three types of incentives,” says Dan Kuipers, solar sales manager and grant specialist with TrueLeaf Technologies, a supplier of heating, irrigation and other greenhouse control systems. Kuiper previously has spent five years as owner of Sustainable Energy Financing (SEF), a consulting firm that helps growers with financing strategies for energy-efficiency, renewable-energy or water-conservation projects.
“There are federal tax credits and other benefits that vary state by state. There are also rebates, or what I call the utility-based incentives, which are offered by individual utility companies. They’re usually driven by state legislation or the state public service commission, which mandate that utilities offer incentives programs based on renewable and energy-efficient technology.”
Kuipers says rebates are usually fairly easy to get. Growers should talk with their utility company and see what is available in their area. The Database of State Incentives for Renewables and Efficiency (DSIRE) at dsireusa.org lists available rebates by state and utility.
The third incentive category is grants.
“Grants can offer a very significant injection of cash into a project,” Kuipers says. “The problem with grants is that they usually require a lot of paperwork. Sometimes they need to involve third parties to do energy audits. But the biggest thing is that they’re competitive in nature. They’re not guaranteed.”
Look At The Big Picture Before Applying
“Usually the larger the project in terms of dollars, the more complicated the grants get, and the more difficult it is,” Kuipers says. “There are companies that will guide people through the process. It’s an art form. In my opinion, growers need to focus on what they do best, and that’s grow things, not try to become an author. Grant reviewers can be very picky, and certain components need to be included. Missing what may appear to be minute details may have some broad-reaching implications. Reviewers look for reasons to really distinguish between those applicants that get funded and those that don’t.”
Kuipers says one big mistake growers commonly make is starting to build the project or putting a down payment on equipment, and then applying for a grant hoping to get some extra funds. If you’re looking at a project related to energy, environmental improvement or water conservation, it’s important that growers evaluate and apply for incentives before spending any money.
“The goal of a grant is to make projects possible that wouldn’t happen otherwise,” Kuipers says. “The thinking is, ‘Why do you need an extra boost from us if you’ve already purchased the equipment? There are other applicants more deserving.’”
Choose Projects Carefully
Determining the benefits is key to deciding whether you should invest the time in applying for a grant, Kuipers says. “I always encourage people to apply for grants if it fits within their timeline and if they have a good project — one that has a realistic chance of being funded.”
However, the tantalizing idea of a grant can also be detrimental. Growers sometimes hold off on projects that would have immediate benefits, hoping for a grant to offset even more of the cost.
“The downside of that is they might find out six or nine months later they didn’t get funded,” Kuipers says. “So a grower may get into a cycle where maybe they go two or three heating seasons using equipment they know they shouldn’t be using because they’re waiting for a grant to sweeten the deal. And in that three years they’ve lost a lot of money on the efficiency side.”
Do The Homework
Projects with a long payback time are the ones that should be funded with grants, Kuipers says. “When you’re looking at technologies that make incremental improvements to efficiency, or less mature technoligies where the cost is still coming down — those generally are the types of projects where grant money is truly needed,” he says. “And that’s when you should hold out and wait to see if you’ve been funded.”
Reviewers are careful about choosing grant recipients, Kuipers says, because they have to do a lot of work as well. “Reviewers want to know what the payback is. They want to make sure that if they’re going to give you a grant or rebate, you have the ability to obtain the rest of your financing. It’s also important that you’re able to talk about co-benefits such as reducing greenhouse gases, job creation and environmental benefits. The Rural Energy for America Program (REAP) program, for example, requires that a letter from your state energy office that says, ‘We are in support of this project because it meets the environmental goals of our state.’”
Kuipers also recommends that growers obtain a third-party energy audit, because it provides an unbiased opinion of the project and how much energy it will save.