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GDS Associates, Inc.ENGINEERS & CONSULTANTS
AGRICULTURE ENERGY EFFICIENCY AND RENEWABLE
ENERGY PROGRAMS
OVERVIEW
State & Utility Programs
Federal Programs USDA – REAP (Rural Energy for America)
NRCS – EQIP (Environmental Quality Incentive Program)
Agriculture Energy Audits
Other Types of Financing/Tax Benefits
Past Project Examples
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STATE/UTILITY PROGRAMS
Vary by state/utility
Prescriptive and/or custom
Incentives 10-30% of project cost
Often only for electric and/or natural gas savings –
not LP, fuel oil, biomass, etc., but not always the
case
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STATE/UTILITY EFFICIENCY PROGRAMS
Typical offerings: Incentives/rebates EE equipment
No cost level 1 audit Possibly no cost upgraded audits
Sometimes payments/rebates for producer to hire
professional to complete Level 2 energy audit
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STATE/UTILITY EFFICIENCY PROGRAMS
Example Statewide programs Wisconsin Focus on Energy
Colorado Agriculture Energy Efficiency Program
Utility Based programs Xcel Energy Community Conservation Program Touchstone Energy Cooperative Energy Sense Program
MidAmerican Rebate Program
Consumers Energy
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STATE/UTILITY ENERGY AUDIT PROGRAMS
Energy audit programs and rebates Michigan State University
$2,000 of energy audit cost Consumers Energy
$500 rebate for qualifying energy audit
Great River Energy
Rebate up to $2,500 for qualifying audit
Colorado Energy Office
Free energy audit
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STATE/UTILITY RENEWABLE ENERGY PROGRAMS
Example Statewide programs Wisconsin Focus on Energy Renewable Energy Competitive
Incentive Program Prescriptive Renewable Incentive
Example Utility Based program Xcel Energy Solar Rewards Program - MN
Performance Based Incentive
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FEDERAL PROGRAMS
USDA - REAP
NRCS- EQIP
CSP – Conservation Stewardship Program
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USDA-REAP: RURAL ENERGY FOR AMERICA PROGRAM
Grants up to 25%
Loans guarantee for loans up to 75%
Eligibility:
Agriculture producers (at least 50% of income from
ag)
Rural Small Businesses in eligible areas
Energy efficiency and renewable energy
Existing operations and new construction
All energy types (electric, NG, LP, biomass)
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USDA-REAP: RURAL ENERGY FOR AMERICA PROGRAM
Grants up to 25% of project costs
Energy Efficiency Projects
$2,500 minimum
$500,000 maximum
Renewable Energy Projects
$1,500 minimum
$250,000 maximum
Loan Guarantee up to 75% project costs
$5,000 minimum loan
$25 million loan limit
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USDA-REAP: RURAL ENERGY FOR AMERICA PROGRAM
Energy audit required for energy efficiency
projects
Must be conducted by qualified individual
Must meet ASABE S612 standards
Audit is specific to equipment only
Feasibility study required for renewable projects
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USDA-REAP: RURAL ENERGY FOR AMERICA PROGRAM
Grant writer for projects over $80,000 cost
Competitive process
Applications accepted year round, but only
ranked a few times per year
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USDA-REAP: RURAL ENERGY FOR AMERICA PROGRAM
Examples of eligible projects
Renewable (PV, wind, GSHP, biomass)
Lighting
VFD’s
Improved pumping plant
Grain dryers
Improved processing equipment
Heating/cooling equipment
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NRCS - EQIP: ENVIRONMENTAL QUALITY INCENTIVE
PROGRAM
What is EQIP?
Program to assist producers with conservation practices
On Farm Energy Initiative
All energy types (energy efficiency only)
Technical and financial assistance
Conservation Activity Plans (CAP)
Implementation of EE practices within a qualifying CAP
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NRCS – EQIP ON FARM ENERGY INITIATIVE
History:
2008 WI Pilot
2009 – 29 states piloted
2010 available as option in all states
2012 required as available in all states
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NRCS – EQIP ON FARM ENERGY INITIATIVE
Financial assistance for development of Ag Energy
Management Plan (AgEMP)
Intended to cover up to 75% audit cost
Must be completed by a certified TSP
Financial assistance for recommendations made in
AgEMP
Up to 75% of project cost
Must have audit complete and apply for funding
and be approved before purchasing equipment
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NRCS – EQIP ON FARM ENERGY INITIATIVE
All type of farms eligible
Dairy
Hog
Greenhouse
Grain Drying
Poultry
Irrigation Systems
Etc.
Program does not work with new construction
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NRCS – EQIP ON FARM ENERGY INITIATIVE
Types of recommendations that may be eligible for
implementation payments
LED lighting
Irrigation pumps
HE Motors
Automated controls
Maple syrup evaporators
Plate coolers
Commercial washer/extractor
Thermal curtains
VFD’s
Insulation
Water Heaters
Grain Dryers
Perforated Bin Floors
HE Fans
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NRCS – EQIP: DOES NOT INCLUDE RENEWABLES
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IMPLEMENTATION PAYMENTS
Each state sets their own payment rates
State level payment rates can be found at the NRCS
website.
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ENERGY AUDIT
Energy audit process Two options:
Option 1: Apply for NRCS funding
Option 2: Pay audit cost out of pocket
(may utilize state or utility funding assistance if available)
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ENERGY AUDIT
Option 1: Apply for NRCS funding (AgEMP)
Producer applies for funding to hire qualified auditor
Producer contracts with listed Technical Service Provider
(TSP) to complete AgEMP
AgEMP completed by TSP per ASABE Tier 2 standards and
submitted to producer for review and NRCS.
Producer is reimbursed for up to 75% of audit cost
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ENERGY AUDIT
Option 2: Producer pays out of pocket
Producer contracts directly with qualified auditor
May allow farm to move to implementation sooner
Typically payments for implementation justify cost of the
energy audit
Good option for producers looking to upgrade equipment
sooner than later
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ENERGY AUDIT
After qualified energy audit
Producer can apply for conservation activities
If approved producer signs contract with NRCS
Recommendations implemented and then payment from
NRCS is issued Payments are not issued until installation is complete and verified by
NRCS
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WHAT IS ASABE TIER 2 REPORT?
Detailed energy audit report for farm operation
Considers all major activities and components
Provides specific EE recommendations
Excludes residential buildings
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WHEN DO ENERGY AUDITS MAKE SENSE?
If the cost makes sense
The larger the farm the better the opportunities
Heated/cooled greenhouses in varying climate
High utility bills
Looking to upgrade equipment
If farm has experienced a recent increase in production
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BENEFITS OF AN ENERGY AUDIT
Provides ‘big’ picture awareness
Helps identify large energy users
Saving energy means reduced costs
Helps find “big bang for buck projects”
Prioritizes energy savings opportunities
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COST OF AGRICULTURE ENERGY AUDIT
Online Tools
Phone interviews
On-site audit
State and utility programs –often audit is free or low cost
ASABE Tier 2 range from $1,000 to over $5,000
Depends on type of enterprise, acreage, herd size,…
Average $2,000-$3,500
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QUESTION
True or False:A producer will always receive 100% funding for an
agricultural energy audit?
False:
Depends on if producer is approved for funding
Cost of an audit is determined by the energy auditor
NRCS, state and utility payment rates are set amounts
and may not cover the entire cost of the audit
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COMMON PROGRAM RECAP
Utility/State USDA - REAP NRCS - EQIP
Audit reimbursement Variable 25% Up to 75%
Implementation
reimbursement
Typically 10-30% 25% Up to 75%
Energy types eligible Electric and/or natural
gas
Any Any
Apply for incentives
before or after
installation
Depends:
prescriptive = after
Custom = before
Must have application
in prior to purchase and
install. Can install
before hearing if
approved as long as
application is in
Before, must have
approval prior to
purchase and install
TSP required to do
audit?
No, but may require
other certification
No, but must be a
qualified auditor
Yes
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OTHER AVAILABLE PROGRAMS
PACE – Property Assessed Clean Energy Program
Federal Renewable Tax Credits
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PROPERTY ASSESSED CLEAN ENERGY (PACE)
FINANCING
Newer financing option via special assessment on
taxes
EE upgrades, water efficiency improvements, and
RE installations
Typically 5 – 25 year financing
Not available in all states
32
FEDERAL RENEWABLE ENERGY TAX BENEFITS
Business Energy Investment Tax Credit (ITC)
Not commonly taken advantage of by Ag producers
Tax credit allows for deduction of the cost of install
Not all types of systems get the same tax credits
(Solar vs. Wind)
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FINDING FUNDING ASSISTANCE
www.dsireusa.org
Database of energy efficiency and renewable
programs
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PROJECT EXAMPLE – DAIRY FARM LIGHTING
2,300 cow dairy light upgrade
Project quote entire farm to LED =
$92,000
Calculated annual $ savings = $15,454
Xcel Energy incentive = $23,952
EQIP payment = $48,684
6 year simple payback before incentives
1.3 year payback after incentives
35
PROJECT EXAMPLE – IRRIGATION PUMP MOTOR/VFD
2 - 120 Acre Center Pivots/1 Pumping
Plant
Premium Efficiency Motor and VFD
Project quote = $28,346
Calculated annual $ savings = $3,719
Electric Cooperative Incentive= $5,200
EQIP payment = $4,820
7.6 year simple payback without
incentives
4.9 year payback after incentives
36
PROJECT EXAMPLE – MAPLE SYRUP REVERSE OSMOSIS
Wisconsin based maple syrup
operation
RO system to reduce amount of wood
consumed in evaporator
Project quote = $7,600
Annual $ savings = $1,386
Estimated EQIP payment = $5,700
5.5 year simple payback without
incentives
1.3 year payback after incentive
37
PROJECT EXAMPLE – GRAIN DRYER
Grain Dryer Upgrade
35 or 40 Year old cross flow dryer
Project quote = $112,600
Annual $ savings = $7,807
Estimated EQIP payment = $47,925
14.4 year simple payback EQIP
8.3 year payback with EQIP
38
CONCLUSION
Most common EE and RE programs used in Ag Utility/State Programs
USDA - REAP
NRCS - EQIP
Some programs may an require audit
Other programs/tax benefits may be available
Beneficial for the farm to take advantage of all
available funding to offset costs.
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THE END
QUESTIONS?
40
FOR MORE INFORMATION, CONTACT:
Gary Gilles, CEM
608.354.0199
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GDS Associates, Inc.ENGINEERS & CONSULTANTS
