Trump Budget Eviscerates Rural Clean Energy Programs

On May 23, 2017, the White House released their recommended fiscal year 2018 budget, reflecting their priorities and policies for the nation. And the message clearly states they do not support farm-based clean energy production as a way to invest in rural America. This budget would unravel the legislative deal struck in the 2014 Farm Bill.

The Trump budget eliminated funding for the most effective programs of the Farm Bill Energy Title. Additionally, for several programs the budget eliminated funding that had been carried forward from previous years, which means they went beyond cutting annual funding to even eliminate residual funds.

The Rural Energy for America Program (REAP) has supported over 15,000 energy saving and clean energy producing projects in rural areas in every state. The 2014 Farm Bill provided mandatory funding of $50 million per year. The Trump budget would eliminate all of that funding, and also remove $8 million carried forward from previous years, essentially killing REAP.

The Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance program provides loan guarantees for plants that can use agricultural residues and other forms of biomass to produce a range of energy and non-energy projects. The Trump budget claws back the $175 million in accumulated program funding.

The Biomass Crop Assistance Program (BCAP) would be get the same treatment as in previous years – capped at $3 million.

A statement from the Chairs of House and Senate Agriculture Committees indicate they will pursue a more independent path on appropriations, though they did not specifically mention energy programs.

The following chart provides an over view of changes. Note that the negative numbers mean mandatory funding would be eliminated and reserve funds would be taken away.

President’s FY2018 Farm Bill -Clean Energy Programs with mandatory funding
Section Section name 2018 Mandatory President’s 2018 Request
9002 Biobased Markets 5  No change
9003 Biorefinery Assistance Program  $           –  $    (175.0)
9004 Repowering Assistance Program  $           –  No change
9005 Bioenergy Program for Advanced Biofuels  $        15.0  No change
9006 Biodiesel Fuel Education Program  $         1.0  No change
9007 Rural Energy for America Program  $        50.0  $        (8.0)
9010 Biomass Crop Assistance Program  $        25.0  $         3.0

 

Explanation of appropriations terms

Mandatory funding — The amount authorized in the five-year Farm Bill by Congress is available unless limited to smaller amounts in the annual appropriations process; if appropriators do not act, the amount that was authorized is provided to the program.

Discretionary funding – Programs that require annual funding to be passed by the Appropriations Committees.

 

 

New REAP Funds for FY2017 Now Available

(October 18, 2016) The USDA released a notice of solicitation of applications (NOSA) for the Rural Energy for American Program (REAP). The funding notice for fiscal year 2017 provides guidance for applicants including to online resources at FarmEnergy.org and from the USDA.

This notice includes grants and loan guarantees for renewable energy and energy efficiency projects. Eligible recipients for these projects include agricultural producers and rural small businesses. Residences are not included.

Awards are made on a competitive basis, as determined by the point scoring system also described in the NOSA. Applications can be submitted at any time but the following deadlines apply:

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Rural Areas Benefit from new REAP Awards

The USDA announced another round of awards for the Rural Energy for America Program (REAP) in mid-July, bringing benefits to 56 states and territories and to a wide range of agricultural sectors. REAP continues to help reduce costs, protect and increase jobs and to produce homegrown clean energy.

Flagshooter hybrid wind/ solar project.The July 2016 round of awards reflect broad interest in cutting energy costs with energy efficiency, the highest number and dollar value of grants. There were 470 awards for a total of $6.5 million in grants.

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REAP Grants for Energy Audits & Renewable Energy Development

On May 10th, 2016 the USDA announced the award of 26 grants, totaling nearly $2 million, to provide help to rural small businesses and agricultural producers to find ways to conserve energy and develop renewable energy systems.

The REAP grants  (pdf) were awarded to universities and state and local governments to provide energy audits and renewable energy development assistance to agricultural producers and rural small businesses. The services help these firms to invest wisely to cut energy waste and to find ways to generate renewable energy.

Agriculture Secretary Tom Vilsack said, “Nationwide, Americans are lowering their carbon footprint and energy bills by being more energy efficient and switching to renewable energy, and USDA investments make more of these options available. The Rural Energy for America Program also helps businesses create jobs in their communities through the development and installation of energy efficiency and generation projects.”

The 2014 Farm Bill allowed resource conservation and development districts (RC&Ds) to receive these grants. RC&Ds are regional groups created decades ago to provide direct assistance to farmers for conservation and other activities. Congress cut all funding to them in 2011 and many are struggling or are now defunct.

REAP provides grants and loan guarantees for renewable energy systems and energy efficiency improvements, grants for energy audits, and grants for renewable energy planning and development to service providers who work with farmers and rural small businesses. Thanks to investments like these, enough renewable energy has been produced to power more than 959,000 American homes annually, or more than 10.4 billion kWh worth of electricity. In addition, USDA has provided almost $345 million in grants and $430 million in loan guarantees to agricultural producers and rural small business owners from 2009 to 2015.

The list of award recipients is available here.

 

Harvesting Sunshine More Lucrative Than Crops at Some U.S. Farms

For more than a century, Dawson Singletary’s family has grown tobacco, peanuts and cotton on a 530-acre farm amid the coastal flatlands of North Carolina. Now he’s making money from a different crop: solar panels.

Singletary has leased 34 acres of his Bladen County farm to Strata Solar LLC for a 7-megawatt array, part of a growing wave of solar deals that are transforming U.S. farmland and boosting income for farmers.

Farmland has become fertile territory for clean energy, as solar and wind developers in North America, Europe and Asia seek more flat, treeless expanses to build. That’s also been a boon for struggling U.S. family farms that must contend with floundering commodity prices.

“There is not a single crop that we could have grown on that land that would generate the income that we get from the solar farm,” said Singletary, 65.
The rise in solar comes as the value of crops in the Southeast — with the exception of tobacco — has dropped. Cotton prices have fallen 71 percent in the last five years. Soybeans are down 33 percent and peanuts have slipped 16 percent.

Solar companies, meanwhile, are paying top dollar, offering annual rents of $300 to $700 an acre, according to the NC Sustainable Energy Association. That’s more than triple the average rent for crop and pasture land in the state, which ranges from $27 to $102 an acre, according to the U.S. Agriculture Department.

The economic incentives spurring solar will be discussed at a Bloomberg New Energy Finance conference in New York starting April 4.

“Solar developers want to find the cheapest land near substations where they can connect,” said Brion Fitzpatrick, director of project development for Inman Solar Inc. of Atlanta. “That’s often farmland.”

Developers have installed solar panels on about 7,000 acres of North Carolina pasture and cropland since 2013, adding almost a gigawatt of generating capacity, according to the NC Sustainable Energy Association. Georgia has added 200 megawatts on fields and cleared forests over the same period, much of it farmland, according to the Southface Energy Institute of Atlanta.
The number of megawatts developers can generate per acre of farmland varies, based on weather patterns, size of the panels and contours of the land. On Singletary’s farm, Strata Solar installed 21,600 panels, each about 6 feet by 3 feet (1.8 meters by 914 centimeters). Combined, they can power as many as 5,000 local homes.

Long-Term Contracts

Farmers typically lease a portion of their land, signing 15- to 20-year contracts with developers who install the panels and sell the power to local utilities. In rare cases, farmers have leased their entire property to solar companies.

Singletary signed a 15-year lease in 2013, with two 10-year extension options, and Chapel Hill, North Carolina-based Strata sells the power to Duke Energy Corp. He declined to disclose financial terms.

Government incentives have played a key role in the spread of solar farms built on real farms. North Carolina granted developers tax credits equal to 35 percent of their projects’ costs though a program that expired at the end of 2015, helping make the state the third-biggest U.S. solar market. In Georgia, the Public Service Commission passed a bill in 2013 requiring the state’s largest utility, Southern Co.’s Georgia Power, to buy 525 megawatts of solar by 2016. Both policies sent companies scouring for open space to build.

Solar panels have buoyed tax bases in impoverished rural counties, said Tim Echols, a member of the Georgia Public Service Commission. They also let farmers diversify their income with revenue that’s not subject to markets or unpredictable weather patterns.

‘Stable Income’

“Solar and wind farms have become a new stable income stream for farmers — and they don’t fluctuate with commodity prices,” said Andy Olsen, who promotes clean energy projects in rural areas for the Chicago-based Environmental Law & Policy Center.

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Press Release: Iowa Electric Co-op Sets Standard for Rural Solar

Contact: Katie Coleman, (312) 795-3710

Solar Shines for Rural Electric Co-Ops
Announcement Sets New Iowa Record for Solar from Rural Electric Co-ops

Iowa’s Central Iowa Power Cooperative (CIPCO) and its member cooperatives announced a major investment in solar energy today, unveiling plans to build 5.5 megawatts of new solar energy at six locations across its service territory. This will be Iowa’s largest solar project from a rural electric co-op, and it represents a 20% increase in Iowa’s total solar capacity (27 MW as of 2015, according to the Solar Energy Industries Association).

CIPCO is Iowa’s largest cooperative energy provider, serving nearly 300,000 residents and about 12,000 commercial/industrial accounts in its 300-mile territory stretching diagonally across Iowa and touching Des Moines and Cedar Rapids.

The announced projects will be built by Azimuth Energy LLC of St. Louis, MO.

According to the Solar Energy Industries Association (SEIA), Iowa installed a total of 6 MW of solar energy in 2015.  That means this project alone is just shy of that annual total.

“CIPCO has taken a great step forward in providing their members access to solar energy,” said Josh Mandelbaum, Staff Attorney of the Environmental Law & Policy Center in Des Moines. “CIPCO was clear that this effort is just the first phase of the rural electric cooperative’s long-term plan to incorporate solar as an additional pollution-free resource within its energy portfolio.”

Brad Klein, Senior Attorney at the Environmental Law & Policy Center, said the CIPCO announcement sends a strong signal to rural electric cooperatives across the Midwest. “The enormous potential for solar energy in states like Iowa, Illinois, Minnesota and Wisconsin is just now beginning to be realized, and rural electric cooperatives, which have strong relationships with their members, have an opportunity to lead the way.”

To learn more about the CIPCO announcement visit: http://www.cipco.net/content/cipco-launches-iowas-largest-utility-based-solar-project