Federal government increases solar grants for farms, small businesses

Funding for the Rural Energy for America Program (REAP) has quadrupled to more than $2 billion through 2031. Farmers and small businesses are eligible for additional and larger grants to become more energy independent.

“Funds are anticipated to support renewable energy and energy efficiency projects for more than 41,500 farms and small businesses,” says Bobby King, Minnesota state director for nonprofit Solar United Neighbors, headquartered in Washington, D.C. “It also ensures the benefits of our transition to renewable energy are shared with rural communities.”

The expansion of REAP means solar projects are eligible for grants to cover up to 50% of the cost of installing a system to help farmers and small businesses power their operations with the sun.

There are four application cycles a year, up from two, and projects in disadvantaged communities receive additional bonuses. Maximum grants for renewable energy systems are now $1 million, up from $500,000.

Since not all farmers and small businesses are grant application specialists, Solar United Neighbors has put together a new guide to the process.

“REAP funds ensure that farmers and rural small businesses benefit from this transition by allowing them to install and own solar directly,” King says. “As soon as they go solar they become renewable energy producers, lowering their energy cost and their carbon footprint.”

King adds that dollars awarded go right into the pockets of farmers and small businesses who hire local installers to put in their solar arrays.

MORE FROM FORBESThe Inflation Reduction Act Will Bring Some Manufacturing Back To The U.S.

The program funds smaller arrays, up to 40 kilowatts in Minnesota, for example, based on the state. A typical project in Minnesota is around $120,000.

“They are often on the roof of buildings or barns, though they can also be put in pastures where livestock are able to graze around them,” King says.

He adds: “This distributed solar, meaning solar placed where the power is used, creates a more resilient power grid and distributes the economic benefits while addressing climate change.”

For a farmer or small business owner, the new REAP opportunities are bright.

“It’s just a matter of farmers and these small businesses carving out the time (to apply),” he says. “I think what’s going to happen is: This next round is coming in at 50%. Those farmers and business are going to talk to their neighbors.”

So far, Solar United Neighbors (aka SUN) has seen almost 2,000 downloads of its application guide, and more than 800 people RSVPed for a February webinar.

As a general example, a REAP grant combined with tax credits and other incentives can cover at least 80% of the cost of a $100,000 solar array, King says, with an end cost of $20,000 by the time you factor in a 50% grant, 30% federal tax credit and other incentives.

“This makes the payback period on this solar very quick and is a strong financial incentive to go solar,” he says. In many cases, that ‘very quick’ translates to five years or less for a solar system with a 25-year warranty.

And once the solar is up and running, farmers and small businesses will know what their price per kilowatt hour is for the power they produce. It allows a user to take control over an input cost they once had little control over, supporters say.

Even before REAP was boosted by the Inflation Reduction Act of 2022, the program received praise.

A list of “REAP Success Stories” from the Environmental Law and Policy Center (ELPC), a conservation organization in Illinois, notes that the program has sparked investment in more than 22,000 renewable energy and energy efficiency projects since its inception in 2002 as part of the Farm Bill.

Those include a 35-kilowatt solar array at Wildtype Nature Plant Nursery in Mason, Michigan, and a 220-killowatt installation at Bowman & Landes Turkey Farm in New Carlisle, Ohio.

“ELPC has been a champion of REAP since its inception,” the group says on its website, “and we’re excited to see new federal funding to support this bipartisan program moving forward, but we have also provided a series of recommendations for improving REAP in the next Farm Bill.

“The whole United States benefits from reduced pollution, stronger rural economies, and increased farm incomes. REAP has a bright future, and we look forward to helping it get even stronger in the years ahead.”

King says there hasn’t been much publicity about the recent increase in program funding. People are learning about it through word of mouth and groups like SUN.

“When people learn about it, it seems too good to be true. And that’s something to overcome, too, but it’s not too good to be true.”


Leave a Reply

Your email address will not be published. Required fields are marked *