Incentives for Agricultural Energy

Gerry Palano, Renewable Energy Coordinator, MDAR

EBC Renewable Energy Seminar

Sustainable Regional Agriculture through Renewable Energy

Springfield, MAMarch 19, 2009

Funding Terminology

• Grant – means you are competing with others and funds will be disbursed based on the best proposals, i.e., those best meeting the program requirements and intent. Generally periodic offerings.

• Rebates – generally means first- come, first-served till the funds run out. Need to meet the program requirements to be approved. Generally rolling, on-going offerings.

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Generic Guide for Programs

• Local – contact your town office – property tax breaks• State – administer energy programs

– Utilities – most utilities offer some form of energy efficiency program – all local distribution companies (LDCs) do, not all Municipal Power & Light companies do.

– Renewable Energy Trust (RET) for renewable technologies

• Federal – USDA probably most prevalent but NRCS has also provided incentives

• Others – funded agencies or groups in your state, e.g., Berkshire-Pioneer Resources Conservation Development Areas (BPRC&D)MA Farm Energy Program

Invaluable Internet Resource

• http://www.dsireusa.org/

• Database of State Incentives for Renewables & Efficiency

• DSIRE is a comprehensive source of information on state, local, utility, and federal incentives that promote renewable energy and energy efficiency.

Massachusetts

–   State Grant Program – MTC - Clean Energy Pre-Development Financing Initiativ

e (Grants)– MTC - Large Onsite Renewables Initiative (LORI) Grants– MTC - Matching Grants for Communities

–   State Loan Program – MTC - Clean Energy Pre-Development Financing Initiativ

e (Loans)

–   State Rebate Program – MTC - Commonwealth Solar Rebates– MTC - Small Renewables Initiative (SRI) Rebates

Massachusetts– Utility Rebate Program

• Bay State Gas - Commercial Energy Efficiency Program• Bay State Gas - Residential Energy Efficiency Programs• Belmont Municipal Light Department - Residential Energy Efficiency Rebate Program• Berkshire Gas - Residential Energy Efficiency Rebate Program• Chicopee Electric Light - Residential Energy Efficiency Rebate Program• Chicopee Electric Light - Solar Rebate Program• Concord Municipal Light Plant - Energy-Efficient Lighting Rebate Program• Concord Municipal Light Plant - Residential Energy Efficiency Rebate Program• Mansfield Municipal Electric Department - Residential Energy Efficiency Rebate Program• Marblehead Light Department - Residential Energy Efficiency Rebate Program• National Grid - Commercial (Electric) Energy Efficiency Incentive Programs• National Grid – Commercial (Gas) Energy Efficiency Programs• National Grid – Residential (Electric) Energy Efficiency Incentive Programs• National Grid – Residential (Gas) Energy Efficiency Programs• National Grid - Small/Mid-Sized Business Energy Efficiency Program• National Grid - Solar Thermal Rebate Program• New England Gas Company - Energy Saving Rebate Programs• NSTAR - Commercial Energy Efficiency Rebate Programs• NSTAR - Construction Energy Solutions Program• NSTAR - Residential Energy Efficiency Programs• Reading Municipal Light Department - Business Lighting Rebate Program• Reading Municipal Light Department - ENERGY STAR Appliance Rebate Program• Shrewsbury Electric - Residential Energy Efficiency Rebate Program• Unitil - Commercial and Industrial Energy Efficiency Programs• Unitil - Residential Energy Efficiency Programs• Wakefield Municipal Gas & Light Department

Generic Utility Programs• Provide electric & natural gas related energy audits at no cost; may provide

more in-depth technical assessment @ cost share with upper limit• Focus on energy efficiency although NGRID/Keyspan will assist in solar

thermal• Energy efficiency measures could include:• Electric Utilities:

– Improved ventilation fan efficiencies – Refrigeration efficiency improvements – Motor replacements– Variable Speed Drives– Lighting– Automatic Temperature Controls

• Natural Gas Utilities: – Higher efficiency boilers & furnaces (condensing if applicable)– Distribution piping insulation – Other thermal envelope improvements such as thermal blankets– Automatic Temperature Controls– Combined heat & power

MA Renewable Energy Trust (RET)

• Commonwealth Solar – provides rebates for photovoltaic projects up to 500 kW in size

• Large On-site Renewable Incentives (LORI) – being redesigned; offers feasibility studies and design/construction grants.

• Small Renewables Incentives (SRI) – rebate program for small hydro and wind, < 10 kW projects.

MDAR

• Massachusetts Department of Agricultural Resources (MDAR) – AEEP, AICG and FVEP are all annual competitive cycles, not energy programs per se but have funded energy related projects and/or programs within the context of the program’s charter.

Farm Energy Discount Program – administered by MDAR, discount from respective utility

AEEP – Agricultural Environmental Enhancement Program

AICG – Agricultural Innovation Center

FVEP – Farm Viability Enhancement Program

Farm Energy Discount

• As a result of the utility restructuring, all eligible farm ratepayers will enjoy a mandated ten percent reduction on their energy bills for electricity and natural gas from their local distribution company (LDC).

MDAR

• AEEP – Agricultural Environmental Enhancement Program – competitive, dedicated to mitigation of air & water pollution

• Grants typically range from $5,000 - $25,000, will pay up to 95% of materials, no labor costs

• Will consider biomass thermal projects• 2007-08 Awardees included Volante Farms

(New Greenhouse) and Mann Farms (Cranberry) for Energy Efficiency Projects

• 2007-08 Awardees included Cider Hill and Caretaker Farms for Photovoltaics (PV) Projects

MDAR

• FVEP – Farm Viability Enhancement Program, competitive, dedicated to assisting farms create and implement business plans to diversify and sustain agriculture

• Two offerings – 5 year commitment with $25,000 funding; 10 year commitment with $50,000 funding

• Some past recipients had energy related equipment identified and purchased as part of the business plan

MDAR

• AICG – Agricultural Innovation Center Grant, annual competitive, uses grants to build partnerships with MDAR and industry support & trade organizations to develop agricultural enterprises that are economically viable and environmentally sustainable.

• Funding has varied from $5,000 to over $1,000,000• 2007-08 awardees included one devoted to developing

and implementing a business model for producers (growers) and end users (nurseries/greenhouses) using kernel corn as a solid fuel

Federal

• USDA Section 9007: Renewables & Energy Efficiency Grants & Loans –Value-Added Producer Grants

• DOE/USDA/EPA – various grants throughout the year, including R&D, Demonstration Projects and Conservation Innovation Grants

USDA RD 9007 ProgramRenewable Energy & Energy Efficiency

• Eligibility is key – need to be in USDA defined rural area & must be a USDA defined agriculture or small business

• Provides grants & guaranteed loans• Provides funding for technical assistance audits – first time• Grants up to 25% of total project cost

– Renewables from $2,500 - $ 500,000– Energy Efficiency from $1,500 - $250,000– Renewables – biomass, anaerobic digesters, geothermal,

hydrogen, small and large wind & solar– Energy Efficiency Improvements - verified by an energy audit or

assessment• Projects under $200,000 use simplified application process• Loan guarantees up to 75% of total project costs

– Range from $5,000 - $10,000,000 per project

USDA’s Value-Added Producer Grants

• Eligibility Requirements:– Applicant – independent producer, farmer or rancher

cooperative, agricultural producer group, majority-controlled producer-based business venture

– Product – change in physical state, differential production or marketing, product segregation, farm-based renewable energy

– Purpose – planning & working capital – Matching - % matching funds required

• Planning Activities (e.g. feasibility study, business plan, marketing plan) $100,000 maximum

• Working Capital (e.g. labor, inventory, advertising) $300,000 maximum

• Matching Funds @ least 50%• March 31, 2008 deadline

Others

• State RC&Ds - New MA Farm Energy Program (MFEP)

Services Available through theServices Available through the

Massachusetts Farm Energy ProgramMassachusetts Farm Energy Program Informational Meeting for USDA Rural Energy for America

Program (REAP) - E. Wareham, MA Feb. 4, 2009

The MFEPThe MFEP• 2008-2009 pilot project, funded by NRCS & MDAR, to

establish a statewide program

• streamline technical & financial assistance

• provide energy audits and/or renewable energy assessments

• provide technical assistance & financial incentives for implementation of audit recommendations

• develop best management practices for farm energy systems

MFEP ServicesMFEP Services

• Technical assistance for:

Massachusetts Farm Discount Program (MDAR)Massachusetts Farm Discount Program (MDAR)

Public utility energy efficiency programsPublic utility energy efficiency programs

Massachusetts Technology Collaborative programsMassachusetts Technology Collaborative programs

• Technical Support & Grant Writing for:

USDA-RD 9006/9007 grants & loan guaranteesUSDA-RD 9006/9007 grants & loan guarantees

• Financial assistance for:

MFEP Audits & IncentivesMFEP Audits & Incentives

MFEP Technical Assistance for USDA-Rural MFEP Technical Assistance for USDA-Rural Energy for America (REAP)Energy for America (REAP)

Program materials for Section 9007 of the 2008 Farm Bill are not yet available, Program materials for Section 9007 of the 2008 Farm Bill are not yet available, however, we assume they will be similar to the 9006 program (formerly called the however, we assume they will be similar to the 9006 program (formerly called the Renewable Energy Systems and Energy Efficiency Improvements Program)Renewable Energy Systems and Energy Efficiency Improvements Program)

• Berkshire-Pioneer RC&D and Mass Woodlands InstituteBerkshire-Pioneer RC&D and Mass Woodlands Institute (MWI)(MWI) are partners in this grant support initiative for 2009

• Primary clients are projects <$200,000 but will assist some >$200,000

• Must meet USDA-Rural Development eligibility

• Must be farming-related business, including forest products

• Apply on-line through BPRC&D webpage

• BPRC&D screens applicants & provides on-going technical support for environmental compliance, energy audit, technical worksheets, environmental compliance, energy audit, technical worksheets, scoringscoring, …

MFEP Audits & IncentivesMFEP Audits & Incentives• “Targeted” audits for other fuels to augment existing public utility

programs

• Full “targeted” audits to farms with municipal utilities

• “Targeted” renewable energy assessments or consultations

• BPRC&D energy contractors to provide audits at negotiated rates

• Incentives to implement at least 50% of MFEP and public utility MFEP and public utility audit recommendationsaudit recommendations &/or renewable energy recommendations

1.1. MFEP financial incentives based on energy savingsMFEP financial incentives based on energy savings

2. USDA-REAP technical assistance

3. Referrals to other programs to “leverage” additional funds

Requirements for MFEP Audits & IncentivesRequirements for MFEP Audits & Incentives• Be an agricultural producer - a person or corporation principally &

substantially engaged in ag. for commercial purpose. (MA-DAR)

• Complete the on-line application & possible follow-up interview

• Meet the NRCS Environmental Quality Improvement Program (EQIP) eligibility rules

• Provide energy use records for up to the last 3 years to BPRC&D

• Provide reports to BPRC&D from past energy audits & renewable energy assessments and other info. important for "targeting" audit

• Provide 25% cost-share to BPRC&D prior to receiving services

• Plan to implement at least 50% of the audit recommendations

• Obtain the necessary approval from the Agricultural Preservation Restriction (APR) program, or any other land restriction program,

• Provide follow-up energy savings information after implementation

MFEP Audits & IncentivesMFEP Audits & Incentives

MFEP incentives based on projected energy MFEP incentives based on projected energy savings from energy efficiency & renewable savings from energy efficiency & renewable energy systems *energy systems *

$0.150 incentive per kWh electricity$0.150 incentive per kWh electricity

$2.50 incentive per therm natural gas$2.50 incentive per therm natural gas

$2.75 incentive per gal propane$2.75 incentive per gal propane

$3.00 incentive per gal fuel oil$3.00 incentive per gal fuel oil

*subject to change as needed to meet the intent of the program

MFEP Audits & IncentivesMFEP Audits & Incentives

Energy Efficiency Groups (EEG)Energy Efficiency Groups (EEG) – greater MFEP incentives to

farmers with less access to other audit & incentive programs

• EEG 1:EEG 1: Eligible for neither public utility electric nor gas energy efficiency programs – municipal utility customers

• EEG 2:EEG 2: Eligible for either electric or gas energy efficiency programs

• EEG 3:EEG 3: Eligible for both electric and gas energy efficiency programs

MFEP Audits & IncentivesMFEP Audits & Incentives

Energy Audit/assessment MFEP cost Farmer costFarmer cost

Efficiency cost at 75% at 25%at 25%

Group

EEG1EEG1 $1000-2000 $750-1500 $250-500

EEG2EEG2 $1000 $750 $250

EEG3EEG3 $400-700 $300-525 $100-175

Note: Consultations can be provided in lieu of audit, likely at the EEG rate

MFEP Audits & IncentivesMFEP Audits & Incentives

Renewable Energy Groups (REG)Renewable Energy Groups (REG) – greater MFEP incentives to

farmers with less access to other renewable energy programs

• REG 1:REG 1: Eligible for neither MTC programs nor USDA-REAP

• REG 2:REG 2: Eligible for USDA-REAP and/or eligible for MTC competitive grants (No MFEP Incentives if awarded MTC grant)

• REG 3:REG 3: Eligible for MTC rebates, but not eligible for USDA-REAP (No MFEP incentives)(No MFEP incentives)

• REG 4: REG 4: Eligible for both MTC rebates & USDA-REAP (No MFEP incentives)(No MFEP incentives)

MFEP Audits & IncentivesMFEP Audits & IncentivesRenewable Assessment/ MFEP cost Farmer costFarmer costEnergy Consultation cost at 75% at 25%at 25%Group

REG1REG1 assess assess $1000-5000 $750-3750 $250-1250REG2 REG2 consultconsult $400-700 $300-525 $100-175

As funding is limited for renewable projects, MFEP will pay 75% of the cost of “targeted” assessments or consultations for applicants or projects not eligible for MTC rebates, i.e. REG 1 and REG 2 applicants.

Estimates for renewable energy assessments can vary widely and are provided above but the actual amount will be determined by BPRC&D prior to the assessment.

MFEP MFEP AssistanceAssistance & Contacts & Contacts• Webpage

http://www.berkshirepioneerrcd.org/mfep/index.phphttp://www.berkshirepioneerrcd.org/mfep/index.php

• Information Sheet with links

““What you can do to start saving money and prepare for the Mass Farm Energy Program – at What you can do to start saving money and prepare for the Mass Farm Energy Program – at no cost to you!”no cost to you!”

http://www.berkshirepioneerrcd.org/mfep/docs/what_you_can_do.pdfhttp://www.berkshirepioneerrcd.org/mfep/docs/what_you_can_do.pdf

• Web-based questionnaire for capturing energy use & project plans, follow-up suggestions and referrals via phone & email

http://www.berkshirepioneerrcd.org/mfep/forms/questionnaire.phphttp://www.berkshirepioneerrcd.org/mfep/forms/questionnaire.php

• Technical Assistance for USDA REAP

http://www.berkshirepioneerrcd.org/mfep/forms/grant_writing_req.phphttp://www.berkshirepioneerrcd.org/mfep/forms/grant_writing_req.php

• MFEP Audits & Incentives

http://www.berkshirepioneerrcd.org/mfep/energy.phphttp://www.berkshirepioneerrcd.org/mfep/energy.php

Darlene Monds, Coordinator, USDA/NRCS Ann Gibson, Program Assistantdarlene.monds@ma.usda.gov agibson@berkshirepioneerrcd.org

Phone 413.256.1607Fax 413.253.5542