Rural America’s New Cash Crop: Renewable Energy
A winery with a solar array in rural Oregon. A greenhouse in Montana tapping geothermal energy. A farm in Kansas that deployed an energy-efficient irrigation system. These are just a few of the more than 15,000 small businesses and family farms around the country that have received a clean energy boost from an unexpected source: the United States Department of Agriculture.
The funding to make these projects a reality comes in part from the USDA’s Rural Energy for America Program, which offers small businesses and farms—often left on the sidelines when it comes to new technology—the opportunity to invest in either renewable energy sources or energy-efficient equipment.
Collectively, the REAP projects installed to date have reduced the greenhouse emissions of these rural businesses by more than 5 million metric tons per year. “That’s the equivalent to removing more than a million cars from the year annually,” said Samuel Rikkers, administrator of the USDA Rural Business-Cooperative Service, which runs the program.
Many of these projects may not have been possible without REAP assistance. Jason Delaney, landscape project manager at Delany’s Landscape Center in Polson, Montana, said the geothermal heat pump the company installed at its new retail building at first looked prohibitively expensive. “The grant and all of the rebates from the power company made it so that it’s actually a really good thing for us,” he said. The system costs about $50 a month in electric costs, compared with $200 to $300 a month for a propane-fueled boiler. The system is expected to pay for itself in four to five years, compared with 10 years without REAP assistance.
“It’s good for the business and good for the environment,” Delaney said.
REAP isn’t a “free ride,” Rikkers pointed out. Program grants can cover up to 25 percent of a project’s cost; the recipient must provide the rest. Loan guarantees address 90 percent of a project’s funding, which enables banks to offer lower rates and longer repayment terms. All told, REAP has provided more than $345 million in grants and $430 million in loan guarantees since President Barack Obama took office in 2009.
Rikkers said REAP helps to make sure that rural businesses have the same opportunities as urban businesses to invest in renewable energy. Filling that need is important, he said, not just for the climate but for the rural companies. “Too often folks might see the issues of renewable energy or energy efficiency as a cultural one,” he said. “I don’t think it is. I spend a lot of my time in small, rural spaces, and folks really care about the environment where they live. They care about saving money for their businesses. So the farming family that might not self-identify as politically liberal will be one of the first to tell you how much business sense it makes and how important it is for the land they’ve been working on to have solar panels all over their chicken farm or highly efficient heating and air-conditioning equipment throughout their facility.”
Pattie Björnson, co-owner of Björnson Vineyard in Salem, Oregon, said the winery has installed a hybrid solar system that generates electricity and hot water. “Heating and cooling a winery is extremely expensive,” she said. “It was a lot of work writing the grant application, but it was worth it.” She said the local energy utility buys the energy produced by the winery’s solar photovoltaic system, which pays the vineyard’s entire electric bill during summer months.
Rikkers said rural farms and companies are a natural fit for renewable energy. For one thing, they have a lot of land that can be devoted to solar arrays or wind turbines. For another, they may have great quantities of biomass—either crops or animal waste—that can be converted into electricity. He said several farms he had visited had installed anaerobic digesters and now convert so much manure into electricity that all their power demand is met. “They are capturing energy as opposed to using it,” he said. “It’s super exciting.”
He added that the investment in new technologies helps to boost small-town economies at a time when many young people are leaving for cities. “It keeps these rural towns and communities really vibrant, so we’re not a country dotted by these very empty places,” he said.
Although it hasn’t drawn much publicity on a national level, REAP has proved popular enough that it can’t quite fulfill demand. “The program has been oversubscribed for years now,” Rikkers said. “In the 2015 fiscal year, there were nearly 1,000 applications totaling more than $50 million that we couldn’t fund for the grant program.”
Rikkers added that he’s been excited to see the REAP program do so well because he comes from a small town and spends so much time visiting rural communities. “Renewable energy and a commitment to energy efficiency are not an urban issue or a rural issue,” he said. “They’re both.”