Solar energy has received a boost with the help of a successful Farm Bill Clean Energy grant and loan guarantee program.

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.