USDA backs small rural firms with $55M in grants, loan guarantees

By Stephen Davies

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WASHINGTON, July 11, 2016 - USDA is providing nearly $55 million in grants and loan guarantees to help 821 small businesses in rural areas save on energy costs.

The latest round of grants awarded under the Rural Energy for America Program total about $11.6 million; loan guarantees add up to approximately $43.2 million, USDA said.

“Since 2009, the Rural Energy for America Program has helped roughly 15,000 small businesses and farms save enough energy to power about 730,000 homes and reduce greenhouse gas emissions by more than 5 million metric tons annually,” Agriculture Secretary Tom Vilsack said in a release. “These investments in clean energy are good for the environment, are good for each business' bottom line and they support the broader rural economy by encouraging the production of renewable energy sources.”

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One of the grants is going to Delaney's Landscape Center in Polson, Montana, which will receive $10,298 to install a geothermal renewable energy system to heat its greenhouse. “The system is expected to save the business nearly $2,000 per year and generate more than 15,000 kilowatts of energy,” USDA said. “The project also supports USDA's StrikeForce for Rural Growth and Opportunity by investing in a high-poverty area.”

Another example: The Sundry Store in Etowah, Tennessee, which provides home improvement tools and household items, is receiving $15,565 to replace its fluorescent- and incandescent-based lighting system with a light-emitting diode (LED) system. The business expects to save more than $13,000 and cut its energy use by 136,766 kilowatts annually - enough to power 13 homes.

There are a host of other grants, from small (Postma Brothers Maple Syrup in Michigan, $2,211 to make energy-efficient improvements in the maple syrup process) to large (Umatilla Electric Cooperative Inc. in Oregon, $250,134 for a solar energy system).

A couple of the larger loan guarantees went to McDonald Solar Farm in Indiana ($4.6 million to buy and install a solar energy system) and Pastime Farms (also Indiana, $4.45 million for the same purpose). Lakeview Biodiesel in Missouri will receive a loan guarantee of $3.9 million to buy a biodiesel production facility.

Congress created REAP in the 2002 farm bill. Its success prompted Congress to reauthorize it in the 2014 farm bill with guaranteed funding of at least $50 million annually for five years.

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One example of its success, said USDA, is Silverleaf Family Farms of Corrales, New Mexico, which used a $4,522 REAP grant in 2014 to install a 6.1 kilowatt photovoltaic array system. “The system generates about 10,600 kilowatts per year, replacing 33 percent of the farm's energy usage,” USDA said. “The savings have allowed the owners to reinvest in their hydroponic vegetables business. Silverleaf subsequently received a $44,068 USDA Value Added Producer Grant to expand vegetable sales into additional farmers' markets and grocery stores.”

Taking other programs into account, USDA has invested $38 billion in electric loans and more than $1 billion for smart grid technologies since 2009, “helping build more than 185,000 miles of transmission and distribution lines serving approximately 5 million rural customers annually,” the department said. “Today, more than 2,200 USDA wind and solar renewable electricity generation projects power more than 130,000 homes.”

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