REAP the rewards of government funding

Though the USDA Rural Energy for America Program (REAP) has been awarding energy grants and guaranteed loans since 2007 (estimates say approximately $57 million worth), there remains an intimidation factor that prevents many from even considering applying for funding.

Yet greenhouses offer some of the best potential, both in payback and successful grant applications.

“Greenhouses use a lot of power, so energy grants are something they really should look at,” says David Thigpen, USDA energy coordinator for North Carolina.

Agricultural producers with 50 percent or greater gross income from agriculture and rural small businesses are eligible. Don’t be misled by the “rural” label either — producers in metropolitan areas also qualify.

“You can be eligible even if you’re near a large city,” says Thigpen. “This particular program says if you’re an agricultural producer, you don’t have to be in the country.”

Rather, look at the type of project. Two kinds can qualify. One is energy efficiency – for example installing energy curtains, retrofitting heaters or lighting, adding insulation, or purchasing or replacing equipment and motors with more efficient units. The other is renewable energy – including projects that produce energy from wind, solar, biomass, geothermal, anaerobic digester, hydrogen, ocean, and hydroelectric.

Grants are available for up to 25 percent of project costs. In other words, a $100,000 project could receive a $25,000 grant. The maximum grant for energy efficiency is $250,000 and $500,000 for renewable energy. Most project costs, including the energy audit, are eligible. Greenhouse employee labor is not an eligible cost. An important note as labor can be about one-third of the cost, and the grant is effectively a 25 percent discount on outsourced installation labor.

It’s well worth the effort; in fact, you may be surprised to learn some of the ins and outs of the process.

Look at what you’re doing
You’re probably already doing a lot of the things you need to do to qualify. At the core of the energy grants process is understanding and managing your facility’s energy use, something you should already be doing.

Tracking your energy use, understanding your peaks and valleys for usage patterns, are all things successful growers live and breathe every day.

A simple energy audit provides much of the missing detail, and helps enhance your knowledge and your potential for energy savings.

For the grant application you’ll need to provide an energy profile of the area you’ll be modifying, as well as suggest additional ways to manage and potentially save energy. Whether tightening a loose vent, co-locating crops to avoid overheating or taking advantage of off-peak utility rates, small changes can lead to big rewards.
 

Plan ahead
You must apply for the grant before beginning the project. This is a key point in the grant application process. USDA guidelines dictate that to be eligible, construction on the project must not have begun yet.

This actually makes great sense, as experts say planning ahead is key to any successful grant application.

“Since the requirements for submission include detailed technical reports and energy audits, we encourage all applicants to begin the process as soon as possible,” says Dan Kuipers, whose Michigan-based firm, Sustainable Energy Financing, provides grant application assistance for growers.

Once the application is made you may proceed with projects that were intended to be done anyway. You do not have to wait for approval to begin.

Apply
Applying may be simpler than you think.

“There are a lot of forms to be signed, but they often look more intimidating than they are,” says Thigpen. “They’re often certifications and things like that can be completed quickly.”

If you receive a grant, you must report to USDA for three years on how the project performs. This includes providing details on energy savings and energy generated, to help track the program’s success and total energy savings generated.

“There are not a lot of requirements other than that,” says Thigpen.

Get help
You don’t have to do it alone. Your USDA office should explain the process thoroughly. Some offices provide more help than others, but it is a project that can be done internally if you choose.

Understanding the process can be daunting. Suppliers like Ludvig Svensson’s Kurt Parbst have also been working with outside grant writing vendors to make it easier for growers to take advantage of the REAP program.

“We know it’s important for growers installing energy curtains to gain payback on their capital investments quickly and easily,” he says.

Working with Sustainable Energy Financing, they’ve been able to help growers complete the process in as little as 30 days.

Other growers have also seen the benefits of working with grant-writing firms. Pleasant View Gardens was awarded a half-million-dollar, renewable energy grant toward installation of a biomass boiler at its Pembroke, N.H., location.

“With an under five-year projected payment, alternative power was a no-brainer,” says President Henry Huntington. “Working with a grant writing firm to go through the painstaking grant process was also a natural choice.”

The company formed a five-person internal committee and worked with Michigan-based grant writing firm Viability LLC, product vendors and its local USDA office to complete the application. Ultimately, they earned the largest grant of its kind the industry has ever seen.

Local USDA offices can provide invaluable help as well, says Thigpen.

“We answer questions on eligibility, help with paperwork, do site visits, help growers figure out what they need, put together a list of requirements for them,” he says.

Whatever route you decide to embark on, help is out there.

In the right market
Greenhouses are some of the best candidates, and a wide range of energy project possibilities exist for greenhouses.

“Some greenhouses install biomass boilers; others replace inefficient motors on pumps, put in better lighting or upgrade old heaters,” says Thigpen.

Some of the biggest rewards, both in grant awards and energy savings, say experts, come from energy curtain-installation projects.

“Because these projects generally have very short paybacks and a high percentage of energy savings — two major scoring components in the grant review process — they have typically done very well in the REAP program,” says Kuipers.

Greenhouse curtain projects score very well in that the increased insulation saves a lot of energy. Single curtain layers often pay back in less than three years and in some cases less than two. Some growers find attractive payback on multiple curtain layers.

Depending on your climate, crop, growing season and fuel expense, investments like greenhouse energy curtains stand alone as good investments without the grants. Still, the grants are incentives the federal government has put in place to encourage energy consumption reduction, and growers should take advantage of them as long as they exist.

“My experience is that growers find it very satisfying to be the recipient of a check from the federal government rather than the typical direction,” says Parbst. “It is a case of tax dollars for work in our industry.”

Whatever type of project you choose, consider the possibility of an energy grant to supplement your costs. Coupled with energy savings and performance rewards, the results could surprise you.

USDA energy coordinators are available all over the country and in Puerto Rico and the Virgin Islands. To find a coordinator in your area, visit www.rurdev.usda.gov/BCP_Energy_CoordinatorList.html.

Joli A. Hohenstein is marketing and PR specialist for Pen & Petal Inc., a marketing, advertising and public relations agency for the green industry.