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No free lunch, but incentives help

Mike Ontrop Published on 08 June 2010

There’s a famous saying that there’s no such thing as a free lunch, and they – whoever “they” is – are right.

And while it’s a well understood cliché, in this recession, most people would be happy with a free appetizer. Or maybe a free drink – anything to help offset the costs of the overall meal.

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Now, apply that logic to energy efficiency projects on your farm. Sure, it’s unlikely someone’s going to drop an energy-efficient motor or pump at your front door, but there are ways you could get some of the costs reimbursed for your energy-saving efforts.

Granted, deploying energy-efficient technology is lucrative regardless of whether you receive incentives, since you’ll be significantly reducing energy consumption and costs.

Some dairy producers who have installed energy-efficient lighting, for example, have cut their light-related energy costs by 50 percent while receiving more light. Most projects that entail replacing inefficient lighting with energy-efficient technology are paid off in less than two years.

Many utilities, state programs and the federal government offer rebates and incentives to farmers who install energy-efficient technologies or renewable energy sources. And if a government program or utility wants to help you pay for this technology that will save you money, it’s a no-brainer.

One such program available to help offset the costs of energy efficiencies or renewable energy projects is the USDA’s Rural Energy for America Program or REAP.

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Grants through REAP can fund up to 25 percent of qualifying project costs, including projects like installing energy-efficient grain dryers, installing energy-efficient lighting or replacing inefficient heating and cooling systems.

Qualifying programs also include renewable projects, like installing solar or wind technology on site to generate clean electricity.

Available loans can provide funding for up to 75 percent of the project. Grants and loans can be paired to pay for the projects but cannot exceed 75 percent of the project costs.

According to the Environmental Law and Policy Center, “REAP has helped thousands of farmers, ranchers and rural small businesses tap into the clean energy resources on their lands and cut energy waste in their operations. REAP is extremely successful, with over 3,000 project awards in all states.”

From 2003 to 2009, a variety of technologies and renewable energy sources have been funded in part through the REAP program, according to the Environmental Law and Policy Center, including:

• Energy efficiency: 29 percent
• Wind: 27 percent
• Biomass: 21 percent
• Anaerobic digester: 15 percent
• Solar: 6 percent
• Hybrid: 1 percent
• Geothermal: 1 percent
• Hydropower: 1 percent

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Not only does the federal government offer incentives for energy-efficiency and renewable energy projects, but states also often provide rebates and incentives.

In Wisconsin, Focus on Energy, a state program designed to promote energy efficiency for businesses, residents and agricultural operations, offers a variety of rebates and incentives to farmers.

Josh Kaurich, an energy adviser for Focus on Energy, says the grants and rebates are available to promote energy efficiency through financial incentives.

The program routinely offers funds to help offset the costs associated with installing energy-efficient technologies, whether it be lighting, milk chillers, pumps or fans, Kaurich says. The program also provides rebates for renewable energy projects, like solar, wind or hydropower.

Efficiency Vermont, a Vermont provider of energy efficiency services, is offering rebates in 2010 for energy-efficient lighting when replacing inefficient high-intensity discharge lighting. In addition, Efficiency Vermont is offering incentives for efficient scroll compressors for dairy farmers.

Jennifer Osgood, dairy farm project manager for Efficiency Vermont, says without the incentives, energy-efficient technologies would likely not be installed and therefore the energy would not be saved. Saving energy will decrease the farmer’s operating costs but also has positive effects for society as a whole and of course the environment.

“Farmers are struggling in Vermont, especially dairy farmers with low milk prices,” Osgood says. “Coming up with the money to cover the upfront cost of equipment – like new lights, plate coolers or variable frequency drives – is often out of their reach.”

Osgood says the program is “very popular” with farmers in Vermont. The program started in 2000, and the number of projects completed ranges from 50 to 150 annually.

While many states offer rebates and incentives, not all do. Call your utility to determine whether your state or utility offers any grants or loans. Grants, rebates, loans and other incentives can widely vary by state.

Many incentives are doled out annually and are subject to change every year. At Wisconsin’s Focus on Energy, the incentives are reviewed annually and sometimes amended based on emerging technologies available or existing funding.

Efficiency Vermont reviews its rebates and incentives regularly. Osgood says the group considers whether the proposed technology has any hurdles or benefits – like maintenance reduction – and cost effectiveness. If the project is deemed cost-effective, Efficiency Vermont can cover up to 80 percent of the total cost. PD

For more information about the USDA’s Rural Energy for America Program and a list of state contacts, visit www.rurdev.usda.gov/rbs/farmbill/index.html , and click on the “Energy Coordinators Contacts” link at the bottom of the page.

Mike Ontrop
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