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'Free' Money! Federal Program Offers Grants for Energy Efficiency
A provision in the 2008 Farm Bill sets aside grant money for agriculture operations to improve energy efficiency or convert to sustainable energy sources. Two NYS greenhouses have already been successful in receiving 25% matching funds.
What is the Grant Program?
The U.S. government has a program that provides money to agriculture operations and rural small businesses to help them improve their energy efficiency and save on energy costs. This program has been in existence since the 2002 Farm Bill - it was originally Section 9006 Renewable Energy Systems and Energy Efficiency Improvements Program. With the passing of the 2008 Farm Bill last year, this provision is now replaced by Section 9007 Rural Energy for America Program (REAP). The new Farm Bill greatly increases funding for the REAP program. In 2006, $22.8 million was allocated to the program, while in 2009 $55 million is set aside; this will increase to $70 million in 2011 and 2012. Of the dollar amount set aside each year, 20% is designated to be used for grants less than $20,000.
The current program provides money for 1) installing a renewable energy source for your operation (wind, solar, geothermal, biomass, etc.) or 2) making improvements to a facility that increases your energy efficiency (retrofitting existing buildings, installing a more efficient heating system, replacement of equipment to improve energy efficiency).
How much money can I get?
The program works a few different ways, it can provide 1) 25% matching funds for the total eligible project costs, 2) a loan guarantee for up to 75% of the project costs, or 3) a combination of up to 25% matching funds and up to 50% loan guarantee (up to a total of 75% of project costs).
The minimum/maximum amount that can be applied for depends on the project. For renewable energy projects, the minimum grant is $2,500 (i.e. total eligible project costs would be $10,000 or more) and the maximum grant is $500,000. For energy efficiency projects the minimum grant amount is $1,500 and the maximum grant amount is $250,000. The amount of a guaranteed loan can range from $5,000 up to $25 million for both renewable energy and energy efficiency projects.
Have other greenhouses/horticulture operations been successful in the program?
Yes, nationwide several greenhouses/horticulture operations have been successful. For greenhouses, grants have ranged from $3,000 up to $500,000 (see link below for the Greenhouse Grower article on the $500,000 grant). Some of the greenhouse projects that have been funded include: installation of geothermal units, biomass boilers, corn furnaces, hot water boilers, and thermal curtains. The two successful NYS greenhouse projects were to install thermal curtains and to convert a greenhouse heating system from forced air to radiant hot water heat. Some other examples of agricultural projects that have been successful include: installing energy efficient lighting, photovoltaic solar systems, and wind turbines.
Do I qualify for the program?
There are several eligibility requirements and individuals considering this program should check with their regional USDA Rural Development office BEFORE they begin the application process to ensure they meet the requirements. Some of the eligibility requirements include: the facility needs to have a majority ownership by US Citizens or permanent residents; agricultural producers should receive at least 50% of their gross income directly from ag production; rural small businesses need to meet SBA size standards; and the project must be located in a "rural area". A "rural area" is any area other than a town or city with a population over 50,000; and not in an urbanized area adjacent to such a city or town. Much of New York State qualifies as a rural area; you can check your location using an eligibility map available online at: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do Click on the link for Business Programs on the left side, then click on the top link for the energy program, and enter your address.
When are applications due?
It is not known when applications will be due for 2009. The federal government has not published the Notice of Funding Availability (NOFA) for 2009 REAP projects. The NOFA is expected to come out sometime in March 2009. As an example, in 2008 the NOFA was released on March 7th and there were two grant cycles - applications were due April 15th, 2008 and June 16th, 2008 with half of the money allocated to each cycle. Because of the quick turn around time growers are advised to get a head start working on the application and not wait until the NOFA comes out. This year a separate NOFA will provide funding for energy audits and feasibility studies.
A successful NYS applicant provided the following tips for getting a head start on the application process: 1) decide what project to pursue; 2) contact suppliers to find out the cost of the project 3) get an energy audit (which may be available free or at a reduced cost from NYSERDA - schedule now), the energy audit (or assessment) will be required for the application to demonstrate the feasibility/practicality of the project. It should be noted the project itself cannot be started before the application is submitted; applicants can implement projects before grant money is awarded, but at their risk; to date this has been a nationally competitive program and funding is not assured.
What does the application process look like?
Filling out the application is not for the weak of heart. One NYS grower estimated he spent 200 hours on the entire application process. Some operations applying for large grant amounts have used professional grant-writing firms. Many sections are required in the application, such as: financial information, a technical report (including agreements, permits, an energy audit or assessment, design and engineering, project economic assessment, equipment procurement, installation, operation and maintenance), and several forms/certifications (equal opportunity agreement, drug-free workplace, etc.). Applications for projects with total costs less than $200,000 are less difficult to complete and receive extra points in the scoring process.
Where can I find more information about the application process?
Your regional New York USDA Rural Development office can help answer your questions about the process; information online at http://www.rurdev.usda.gov/NY/, or you can contact Scott Collins (phone: 315-477-6409) at the state office who will refer you to the appropriate location. USDA Rural Development program specialists will offer guidance, review draft applications if they are received at least a week ahead of the deadline, and answer applicants' questions.
The Iowa USDA Rural Development office website has comprehensive information on the program, which includes templates for the application forms and technical reports. http://www.rurdev.usda.gov/ia/rbcs_RE-EE_Section_9006.html NOTE: this website was developed by the Iowa USDA Rural Development office, where Iowa is referenced be sure to contact the New York USDA Rural Development office.
Instructions for the old application form (Section 9006) are available online at: http://www.rurdev.usda.gov/regs/regs/pdf/4280b.pdf These instructions provide a guide as to what will be required in the new REAP application form; it is not expected that the application will be much different from last year so following this format can give you a head start. Just be sure to follow this year's instructions once they become available. The technical report requirements should not change at all; growers should first focus their efforts on that part of the process, since it's the most detailed and time-consuming component of the application
An excellent 4-page factsheet of the program, discussing eligibility and grant amounts is available at: http://www.rurdev.usda.gov/TX/BP/Energy%20Programs/9007%20factsheet.pdf NOTE: this bulletin was released by the Texas USDA Rural Development office, where Texas is referenced be sure to contact the New York USDA Rural Development office.
The USDA does have a formal webpage for the Rural Energy for America Program (REAP) available, but there is not much content here while the website is being updated: http://www.rurdev.usda.gov/rbs/farmbill/index.html
Greenhouse Grower magazine ran an article on alternative fuels: http://www.greenhousegrower.com/magazine/?storyid=1822 and an article on Pleasant View Gardens in NH, which received a $500,000 grant to install a biomass burner: http://www.greenhousegrower.com/magazine/?storyid=1759
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