Once again, demand for this program outstrips funding by a wide margin. Over 1,100 applications were received for a total of over $112 million in grants and over $70 million in loan guarantees. Of those, 769 projects were awarded a total of $34 million in grants and $15.5 million in loan guarantees. The overall program budget was $36 million and this demand is equivalent to a budget of $120 million.

Awards were distributed among forty-three states and the Virgin Islands. Nebraska had the largest number of awards at 170. The other states in the top five for number of awards were Iowa, Minnesota, Georgia, and North Carolina. Iowa received the most grant funding with $8.5 million, followed by Minnesota, Wisconsin, Nebraska, and New York. (See charts below).

Energy efficiency projects were also way up with 569 projects awarded almost $13 million in grants. Solar projects nearly doubled compared to all previous years with 59 projects totaling over $2.3 million in grants.

Since 2003, 2,034 projects have been awarded in all 50 states and the Virgin Islands totaling over $140 million in grants and over $88 million in loan guarantees. Applications have exceeded awards by 40% over these six years.

Nebraska has had the most awards with 485 over six years, followed by Iowa, Minnesota, Wisconsin, and North Carolina. Minnesota has received the most grant money with over $23 million, followed by Iowa, Wisconsin, New York and Illinois.

Distributed among technologies, wind has received the most grant money with over $44 million, followed by biomass, energy efficiency and anaerobic digesters. Energy efficiency has had the most awards with 1331, followed by wind, biomass and solar.

The results show that the USDA emphasis and prioritized resources dedicated to guaranteed loans is not met by public interest. The USDA sought to provide $205 million in loan guarantees but only one-third of that ($71 million) was sought and the USDA only awarded $16 million, or 8% of their target. Perhaps it’s time for USDA to drop the preference for loan guarantees?

The 2007 cycle of the program can be combined with many federal and state tax credits to make solar energy even more appealing to many prospective customers.

The program, introduced in the 2002 Farm Bill, is formally titled the “Energy Efficiency and Renewable Energy Improvements Program,” or simply “Section 9006″ for short. Eligible recipients include farmers, ranchers and rural small businesses.

These businesses often have electric demand in locations distant from the
power grid that warrants using solar electric. Many of these businesses, such as dairies, ethanol plants and food processing, have significant hot water needs and are suffering from the high cost of fossil energy. (Please note residences are not eligible under the program).

To date, this program has helped launch 40 solar projects in 20 states, with total funding to solar just over $2,200,000. Winning applications have included solar thermal, solar space heating and solar electric. The top states with six projects each include Hawaii, North Carolina, and California,
followed by New York, Wisconsin, New Jersey and Arizona.

These numbers are respectable, but contrast with wind where just over $33,000,000 has been awarded to 168 projects as a result of an organized push by the community wind industry. The most awarded is $500,000 and the least is $4,981. Farmers have has also used this program to own the utility-scale wind turbines on their land, providing greater economic benefits to rural communities.

Renewable energy grants can range from $2,500 to $500,000 (with a cap of 25% of total project costs). Loan guarantees can cover 50% of a project’s loan amount, up to $10 million. If you have a large solar project, (or a hesitant banker) you could combine both grants and loan guarantees up to 50% of project cost. $23 million in federal funding has been set-aside for this competitive program, and efforts are underway to increase this in the next Farm Bill.

Winning these funds under this competitive program requires careful
application preparation that can be a burden for many busy professionals. Solar businesses can benefit by borrowing a page from other firms that have used the program to sell energy efficiency improvements. Firms have successfully tapped the program by preparing generic template materials that are tailored as needed for each prospect. It’s worth noting that a simpler application is now available for projects under $200,000.

The Environmental Law & Policy Center (ELPC) also provides application templates, checklists, tip sheets and worksheets at www.farmenergy.org.
We’ve prepared solar-specific materials as well as case studies for
successful solar thermal projects. While the USDA has not yet announced
this program, the rules for 2007 are expected to be the same as for
2006, so applicants can refer to last year’s program to start planning.

Section 9006, in its current form, will expire with the current Farm Bill. Due to efforts by ELPC and others, the program has received broad support from the agricultural community, who increasingly know that rural renewable energy is not longer limited to ethanol. We expect this program to be reauthorized, possibly at $250 million per year or higher.

The solar industry has Farm Bill grants to help build solar energy capacity with real projects in rural areas. Learn how you can put these innovative energy programs to work. Check out www.farmenergy.org for a program overview, application templates, checklists and other helpful application tools and contact the Energy Coordinator at your state USDA office.