Farmers asked to comment on federal support for renewables
WASHINGTON, DC, US, 2004-10-13 (Refocus Weekly)
The U.S. Department of Agriculture will implement a program to provide grants, loan guarantees and direct loans to farmers and ranchers to purchase renewable energy systems.
The Farm Security & Rural Investment Act of 2002 established the
Renewable Energy Systems & Energy Efficiency Improvements Program to help
farmers, ranchers and rural small businesses to reduce energy costs and
consumption. USDA’s Rural Business-Cooperative Service is seeking comments on
the proposed rule before November 4, and the 30-day comment period is shorter
than the traditional 60-day period because stakeholders are already familiar
with the program being proposed.
The federal administration has committed US$45 million in grant assistance to
farmers, and release of the proposed rule is to formalize the guidelines handing
loan and grant applications. Eligible technologies include biomass, bioenergy
and digesters, geothermal electric, earth energy, hydrogen, solar, wind and
energy efficiency improvements.
Grant funding is limited to 25% of eligible costs and is limited to farmers who
demonstrate financial need. Loans are limited to 50% of project costs, and the
department will consider the estimated quantity of energy to be generated by the
renewable energy system, its expected environmental benefits, the extent to
which the system will be replicable; the demonstrated energy savings to be
derived from the project, and other appropriate factors.
Due to time constraints for implementing the program, only the grant portion was
instituted last year, and 114 of the resulting 147 applications were funded.
Limitations of available funds means the department will propose criteria to
score and rank eligible projects, and proposes to limit maximum grant levels to
$500,000 and a minimum of $2,500. Maximum funding for energy efficiency
improvements is $250,000. For loans, the maximum funding level would be $10
million.
“There exist thousands of agricultural producers and rural small businesses
engaged in meeting the needs of the nation's growing population,” explains the
rule. “The potential contribution of this group toward meeting the national
goal of conserving and reducing energy usage nationwide is great.”
Renewable energy projects of $100,000 will require a feasibility study that must
analyse the market, financial, economic, technical and management feasibility of
the project, and include an opinion and recommendation by an independent
consultant.
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