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March 26, 2014 © 2014 Solar Energy Industries Association® 1
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Public Webinar - The 2014 Farm Bill's Effect on
#Solar and the Rural Energy for America Program
this Thurs: http://seia.us/1nUUaOI
Use #Solar and #FarmBill when
mentioning today’s webinar:
Solar and the Rural Energy for America
Program
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March 26, 2014 © 2014 Solar Energy Industries Association® 2
Solar and the Rural Energy
for America Program
Anthony Crooks, Ph.D, Renewable Energy Policy Specialist, U.S. Department of
Agriculture, Rural Development
Katherine Stainken, Manager, Government Affairs, SEIA
Solar and the Rural Energy for America Program
Tony Crooks
USDA, Rural Development
U.S. Renewable Resources
Source: AEO2014 Early Release Overview
States with Renewable Portfolio Standards and
Renewable Mandates in 2009
$1.1 billion to leverage renewable energy industry
investments in new technologies and feedstocks
• Biomass Crop Assistance Program (BCAP) – $70 M
• Biomass Research and Development Initiative -- $118 M
• Biorefinery Assistance -- $75 M (’09), $245 M (’10)
• Bioenergy Program for Advanced Biofuels -- $300 M
• Rural Energy for America Program (REAP) -- $255 M
• Biobased Markets Program -- $9 M
• Biodiesel Fuel Education Program -- $5 M
• Biofuels Infrastructure Study -- $1 M
• Repowering Assistance -- $35 M
Food, Conservation, and Energy Act ’08Energy Title Programs with Mandatory Funding
• Rural Energy for America Program: $50 million each year FY 2014-18
• Biorefinery Assistance Program: $200 million available until expended
• Repowering Assistance: $12 million available until expended
• Bioenergy Program for Advance Biofuels: $15 million each year FY 2014-18
• BioPreferred Program: $3 million each year FY 2014-18
• Biomass Research and Development Initiative: $3 million each year FY2014-18
• Biomass Crop Assistance Program: $20 million each year FY 2014-18
Agriculture Act of 2014Energy and Bioeconomy Programs with Mandatory Funding
• Increasing economic opportunity in rural America
• Improving the quality of life of all rural Americans
2008 Farm Bill – Title IX Renewable energy programs administered by
USDA Rural Development
• Biorefinery Assistance Program
• Repowering Assistance Program
• Advanced Biofuels Payment Program
• Rural Energy for America Program (REAP)
FLAGSHIP
Rural Energy for America
Section 9007 -- Rural Energy for America Program (REAP)
Formerly Section 9006 – Renewable Energy Systems and Energy
Efficiency Improvements Program.
Establishes a grant and loan guarantee program to assist agricultural
producers and rural small businesses in purchasing renewable energy
systems and making energy efficiency improvements.
Establishes a grant program for energy audits, renewable energy
development assistance, and feasibility studies.
Rural Energy for America Program (REAP)Continued
• Grant Limits:
– $500,000 for Renewable Energy Systems (or 25% of Total Project Costs);
– $250,000 for Energy Efficiency Improvements.
• Loan Guarantee Limits:
– $25 Million Cap;
– Cap Federal share at 75% of project costs.
• Mandatory Funding:
– FY 09 - $55 Million + $5 million discretionary;
– FY 10 - $60 Million + $39 million discretionary;
– FY 11 - $70 Million + $5 million discretionary;
– FY 12 - $70 Million (Actual $22 M mandatory + $2.5 M discretionary);
– FY 13 - $44.3 Million + $3.1 million discretionary.
Rural Energy for America Program (REAP) Notice of Interim Rule Making published April 14, 2011
• The inclusion of flexible fuel pumps that dispense blended liquid
transportation
• Clarifying language to accommodate Section 17 corporations (DOI).
• The removal of citizenship requirements provided the proposed project
is located in a State and the applicant has a place of business located in a
State.
• The modification of the rural area requirement for projects proposed
by agricultural producers to allow such projects to be located in non-
rural areas.
• The addition of a new paragraph to clarify how the Agency addresses
changes in equipment for energy efficiency improvements for
determining eligible project costs.
What projects are eligible?
Requirements for eligible renewable energy or energy efficiency projects:
– Must be located in a rural area, unless for agricultural producer;
– Must be for commercially available and replicable technology;
– Must be technically feasible;
– Must have sufficient revenues to provide for operation and maintenance.
The applicant must be the owner and control the operation and maintenance of the proposed project.
What are Eligible Costs?
• Post application purchase and installation of equipment, except agricultural
tillage equipment and vehicles;
• Post application construction or project improvements, except
residential;
• Energy audits or assessments;
• Permit fees;
• Professional service fees, except for application preparation;
• Feasibility studies;
• Business plans;
• Retrofitting;
• Construction of a new facility – same purpose, same size,
provides more energy savings than improving an existing facility.
What costs are NOT eligible?
• Residential improvements;
• Energy efficiency improvements related to new construction;
• Agricultural tillage equipment;
• Vehicles;
• Applicant in-kind contributions;
• Any expense incurred prior to application submittal.
Guaranteed Loan limitations
Guaranteed Loan request must not exceed 75% of project
costs (including grant funds, if applicable)
– Renewable Energy:
• Minimum request: $5,000;
• Maximum request: $25,000,000 .
– Energy Efficiency
• Minimum request: $5,000;
• Maximum request: $25,000,000.
Grant limitations
Grants request must not exceed 25% of project costs
– Renewable Energy
• Minimum grant request: $2,500
• Maximum grant request: $500,000
– Energy Efficiency
• Minimum grant request: $1,500
• Maximum grant request: $250,000
Fees
• Guarantee Fee up to 1 percent of loan;
• Renewal Fee up to 0.5 percent of loan.
Consolidated Energy Holdings, LLCPollock, Louisiana
Loan guarantees and grants totaling over $10 million.
To refinance of short-term debt, purchase of a feedstock holding tank, and install a feedstock pretreatment system and methanol recovery column, to complete the biodiesel facility.
Results:
• Equipped plant with several newly developed components.
• Allowed production of biodiesel from yellow grease and other waste organic products
• Lowered production costs on 12 million gallons of biodiesel per year.
• Modified port facility to sell, blend, ship, and receive fuel and feedstock.
• Enhanced operating cash flow
• Provided 29 jobs and saved 4 jobs in the Lower Mississippi Delta Commission area.
Berkshire East Ski Area Charlemont, Mass.
Ski Area Powered by Renewable Energy
• USDA Rural Development provided a $1,588,613 Renewable Energy for America Program Loan Guarantee to assist the ski resort in the purchase and construction of a 900KW wind turbine.
Benefits to the ski resort business and the environment.
• Provides power for the entire business’s needs --snow making equipment, lodge, lifts, and canopy tour business.
• Reduces the use of fossil fuels to the ski area.
• Excess energy capacity -- resort completely sustainable and provides renewable energy credits to local non-profits.
• Reduced energy costs make the resort competitive. Berkshire East Ski Area’s 900KW Wind Turbine
Greenhouse curtain saves 2.2 million Btu and $30,000 a yearDS Cole Growers of Loudon, New Hampshire
• 150,000 square foot commercial
greenhouse wholesaler to the regional
nursery trade.
• Awarded $40,318 REAP grant to assist
in a $161,271, Energy Efficiency
Improvement project to install energy
curtains in the grow houses.
• Reduces dependence on fossil fuel, 2.2
million Btu, and cuts heating costs by
$30,000 a year.
• Demonstrated Simple Payback of 5.3
years!
Greenhouse curtain
Biomass Co-generation (1.5 MW)$500,000 grant $2,350,000 loan guarantee
Rough and Ready Lumber CompanyCave Junction, Oregon
3 full-time jobs at the lumber company.
• 7-10 jobs forest stewardship and harvest
contractors.
• 1.5 megawatts generated from biomass.
In 2007, Rough and Ready Lumber Company wanted to
increase their output of dried, ready-for-market
lumber. Their kilns, however, were powered by a
35-year-old boiler that was not up to the job.
The total cost of the project amounted to $6 million. In
addition to the assistance provided through REAP,
the cost was further offset by a State of Oregon
$1.675 million Business Energy Tax Credit.
Another $1.7 million will be paid by the Energy Trust
of Oregon at a rate of $42 per megawatt-hour as the
company produces power over the 5 years of
production.
Payback reduced from 15 yrs to 5 yrs!
AgPower Jerome, LLCLincoln, Idaho
Anaerobic Digester$500,000 Grant$21.2 million Total Project Costs
AgPower Jerome, LLC, of Lincoln County
is one of four similar projects in Idaho
that are partnering with ID dairymen.
AgPower partners with large dairy herds
to provide high quality bedding
material and nutrient management
services in return for the opportunity
to generate significant renewable
energy revenues from the manure
collected on the premises.Will generate 29.9 megawatts per year
• Maxwell Farms an 850 cow, 1,000 acre dairy farm in rural Newport, Vermont, recognized that controlling operating costs—particularly energy, bedding, and soil nutrients—was critical to future sustainability.
• Renewable Energy System Grant, $357,988, and L/G $326,767 to complete the construction of a $1.6 million dollar 212 kW methane digester project.
• Joined the Central Vermont Public Service (CVPS) Cow Power program, becoming the fifth farm to install an anaerobic digester; receives $0.16/kWh feed in tariff from CVPS.
Neighborhood Energy, LLCNewport, Vermont
Anaerobic Digester$357,990 Grant$326,770 Loan Guarantee
Project benefits:
• High value animal bedding
• Nutrient solids
• Net Income ~ $225,000/year
Pacific Outdoor Equipment of Bozeman, Montana
manufactures sporting goods.
Company President Greg Garrigues has looked for ways
to offset the energy used in the mfg. process.
With a $4,599 REAP grant, some funds provided by the
Northwestern Energy, and assistance from Montana
Community Development Corporation, Garrigues
constructed a grid-tied solar array that sits atop the
company warehouse on the north side of town.
The solar array offsets 30 percent of POE’s energy use
and is an expression of the company’s commitment
to be a responsible member of the global
community.
Pacific Outdoor Equipment Bozeman, Montana
Solar Array $4,599 Grant
“Pulling the Switch” on 3,715 kWh/year
Wampler’s Farm SausageLenoir City, Tennessee
• Wampler’s Farm Sausage
Company is family owned for three
generations; in business since 1937.
• REAP Guaranteed Loan of
$1,230,585 to install solar panels;
• 2,240-panel, 502 kilowatt array;
• Displaces 12-15 percent of the
company's electricity consumption;
• Believed to be the state's largest
industrial installation. Photo courtesy: MICHAEL PATRICK/NEWS SENTINEL.
Running on 100 percent solar powerMaster Paints & Chemicals, Guayanila, Puerto Rico
• A rural paint manufacturer that
employs 260 people; Master Paints is a
significant economic engine for Puerto
Rico.
• Average electricity expenses exceeded
$180,000/year.
• REAP grant of $210,176, combined
with Puerto Rico Green Energy Fund
grant of $380,787 helped install a
286,000 kW “Grid-Tie” photovoltaic
system.
• Total Project Cost -- $843,562.
• Master Paints has now offset 100
percent of its annual energy costs.
286,000 kW “Grid-Tie” rooftop photovoltaic system
Addison Solar, LLCFerrisburgh, Vermont
$1.5 million loan guarantee from TD Bank through the Rural Energy for America Program.
Total project costs: $5.7 million.
Impact:
• 3,800 solar panels erected on a 16 acre tract.
• Production of 1 Megawatt of solar energy enough to power 170 average VT homes.
Results:
• Neighborhood high school structuring a science curriculum around the solar project.
• Grand opening allowed students and community leaders to discuss the “how’s and what’s” of alternative energy.
2013 REAP Loan Guarantees
• Mahoning Creek
Hydroelectric, PA,
$7.5M, 19.8 MWh;
• Duplin County Solar,
NC, $5 M, 35 MWh;
• Barrington Power Solar,
NH, $300,331 (Combo),
1 MWh.
Rural Energy for America Program Investments, 2003-13
YearNumber
of Projects
Grant AmountLoan
Guarantee Amount
Leverage Total Project Cost
2003 114 $21,707,373 $0 $545,381,487 $567,088,860
2004 167 $22,812,049 $0 $136,984,587 $159,796,636
2005 156 $22,237,268 $10,100,000 $193,511,453 $225,848,721
2006 395 $21,209,435 $24,158,862 $190,332,768 $235,701,065
2007 436 $19,123,191 $57,270,743 $243,396,339 $319,790,273
2008 764 $34,239,666 $15,566,169 $158,032,939 $207,838,774
2009 1487 $50,994,075 $57,522,141 $160,884,046 $269,400,262
2010 2377 $83,932,404 $73,699,020 $292,173,011 $449,824,426
2011 1888 $57,443,982 $34,072,816 $320,493,367 $412,010,165
2012 844 $20,365,148 $14,278,112 $122,923,334 $157,566,593
2013 1,423 $40,082,065 $32,557,550 $250,715,746 $323,355,361
Total 10,051 $394,146,656 $319,225,413 $2,614,829,077 $3,328,221,136
REAP Investments by Technology, 2003-13
TechnologyNumber of
ProjectsGrant
Amount
Loan Guarantee
Amount
Leverage Amount
Total Project Cost
ENERGY EFFICIENCY 6,729 $151,986,389 $52,602,860 $581,586,032 $786,175,281
SOLAR 1,703 $59,069,648 $31,960,953 $293,177,283 $384,207,884
WIND 646 $69,619,301 $45,422,876 $730,071,189 $845,113,366
BIOMASS 498 $94,743,134 $159,512,842 $131,788,582 $386,044,558
GEOTHERMAL 281 $6,438,306 $1,136,443 $34,187,500 $41,762,249
FLEXIBLE FUEL PUMP 98 $5,623,485 $0 $20,535,232 $26,158,717
HYBRID 40 $1,871,556 $328,459 $8,599,994 $10,800,009
HYDROELECTRIC 33 $2,992,068 $19,704,500 $82,454,277 $105,150,845
10,026 $392,343,887 $310,668,933 $1,882,400,090 $2,585,412,909
EA/REDA 85 $7,998,559 $5,089,011 $13,087,570
FEASIBILITY STUDY 183 $4,460,484 $14,907,741 $19,368,224
268 12,459,043 19,996,752 32,455,794
REAP Solar Investments, 2003-13
YearNumber of
ProjectsGrant Amount
Loan Guarantee Amount
LeverageTotal Project
Cost
2003 7 $1,225,566 $0 $5,676,702 $6,902,268
2004 4 $181,814 $0 $876,602 $1,058,416
2005 10 $861,718 $0 $2,984,694 $3,846,412
2006 16 $769,678 $0 $2,379,458 $3,149,136
2007 19 $379,882 $15,057 $1,057,413 $1,452,352
2008 65 $2,496,136 $457,333 $7,049,408 $10,002,877
2009 169 $6,125,527 $3,473,539 $17,561,046 $27,160,112
2010 298 $13,373,602 $8,356,177 $43,884,293 $65,614,072
2011 492 $14,720,253 $6,157,406 $55,121,639 $75,999,298
2012 214 $6,543,523 $3,647,900 $52,383,031 $62,574,454
2013 447 $14,222,909 $10,182,000 $120,294,400 $144,699,309
Total 1,740 $60,900,608 $32,289,412 $309,268,686 $402,458,706
REAP Solar Investments, 2003-13
$0
$5
$10
$15
$20
$25
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
1.2 0.2 0.9 0.8 0.4 2.5
6.1
13.4 14.7
6.5
14.2
-- - - 0.0
0.5
3.5
8.4 6.2
3.6
10.2
Grant Amount Loan Guarantee Amount$ Millions
High Energy Cost grants
The Rural Utilities Service (RUS)
High Energy Cost Grant Program
awarded $3 million to Sacred
Power Corporation to install
hybrid solar photovoltaic (PV)
power stations for remote tribal
homes in the Navajo Nation in
Arizona.
Rural Electric Loan Guarantee program
Southern Maryland Electric
Cooperative; 5.5-megawatt solar
farm (8,700 MWh).
At maximum production, enough
clean energy to power 600 homes
and offset the pollution of 1,600
cars.
$20 million project -- 1,078 fixed
arrays, 33 acres of 47-acre site; a
onetime tobacco farm purchased by
SMECO at the turn of the century.
30% TPC Treasury 1603 (ARRA);
60% RUS G/L (25 years).
Tom Dennison, left, of Southern Maryland Electric
Cooperative and SunEdison project manager Jay Marx
at SMECO’s solar farm in Hughesville, MD. Photo courtesy of Tin Nguyen/Maryland Independent.
Wealth creation
Multiplier effect --
USDA leveraged investments create a multitude of
secondary and tertiary employment opportunities
and business startups in rural areas and serve as an
incubator to new green technologies.
USDA Energy Partnerships
USDA
FSA NIFA FS NRCSOCE -
OCS
ARS
National
Labs
DOE
EERE
Biomass Program
National Labs
EPA
RFS2 AgSTAR
Environmental Quality Improvement Program
• Eligible program participants receive
financial and technical assistance to
implement conservation practices, or
activities like conservation planning,
that address natural resource
concerns on their land.
• Payments are made to participants
after conservation practices and
activities identified in an EQIP plan
of operations are implemented.
Contracts can last up to ten years in
duration.
Solar powered irrigation pumps deliver
300 gallons per minute from a depth of 68
feet to irrigate pecan trees in Arizona.
FSA Loan Guarantee Program
• FSA guaranteed loans provide lenders (e.g., banks, Farm
Credit System institutions, credit unions) with a guarantee
of up to 95 percent of the loss of principal and interest on
a loan. Farmers and ranchers apply to an agricultural
lender, which then arranges for the guarantee.
• FSA guaranteed loans are for both Farm Ownership and
Operating purposes. Like the Direct Loan Program, a
percentage of Guaranteed Loan funds are targeted to
beginning farmers and ranchers and minority applicants.
Thank you!
Tony Crooks
USDA, Rural Development
202-205-9322
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March 26, 2014 © 2014 Solar Energy Industries Association® 47