Transcript Rural Development Renewable Energy Systems and Energy

Rural Development’s
Rural Energy for America Program
(REAP)
Grants and Loans Guarantees
&
Renewable Energy Feasibility Studies
June 5, 2009
Two Purposes
1. Program is designed to promote energy efficiency and
renewable energy development for agricultural
producers and rural small businesses through grants
and loan guarantees for the purchase of these systems.
2. Program is designed to help fund feasibility studies
for agricultural producers and rural small businesses
interested in the installation of renewable energy
systems.
Rural Development’s Role
Grant Assistance
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25% of the project’s eligible costs
$250,000 Maximum for Energy Efficiency Projects.
$500,000 Maximum for Renewable Energy Projects.
Grant assistance is taxable. A 1099 will be sent to the grant
recipient.
REAP Grant cannot be used with grants from other Federal
Sources.
Loan guarantees
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85% loan guarantee for loans under $600,000
$25,000,000 maximum loan amount
Expected Available Funding
Fiscal Year 2009
• 2008 Farm Bill provided for increased funding
over previous years.
– Fiscal year 2008 funding levels were $16 Million for
grants and $208 Million for Loan Guarantees.
– Fiscal year 2009 funding levels are expected to be
$31 Million for grants and $303 Million for Loan
Guarantees.
Types of projects eligible for USDA
Assistance
• Renewable Energy
• Energy Efficiency
• Biomass and Bioenergy Projects
– Biodiesel, Ethanol
– Wood pellet manufacturing
– Boilers fueled by biomass
• Anaerobic Digester Projects
• Wind
– Small - less than 100kw and under 110’hub height
– Large – Over 100kw
• Geothermal
• Solar – Electric Projects
– Small (less than 10kW) and Large
• Solar – Thermal Projects
– Small (240 gallons storage or less) and Large
• Energy Efficiency Improvements
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Grain Dryer Replacements
Freezers & Coolers
Lighting Improvements
Efficiency improvements per energy audit
• Small Hydropower
Applicant Eligibility
Grants and Loan Guarantees
Applicant:
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must be an agricultural producer (Greater than 50% of
income from farming operation).
rural small business as defined by the SBA.
must be citizens of the U.S.
must not have federal judgments or delinquent federal
taxes
Must demonstrate financial need (Grants and Grant and
Loan Guarantee Combinations only)
Project Eligibility
Grants and Loan Guarantees
Project:
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Must be for the purchase of a renewable energy system
Must be to purchase energy efficiency improvements.
Must be for commercially available and replicable
technology
Must have technical merit
Must be located in a rural area
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Cannot be used for residential improvements.
Eligible Project Costs (Grants)
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Post-application purchase and installation of equipment,
Post-application construction or project improvements,
Permit Fees
Retrofitting (Post- Application)
Professional Service Fees, except application preparation
Feasibility Studies (required prior to application submission)
Business Plans (required prior to application submission)
Energy Audits (required prior to application submission)
– Program cannot be used for projects already installed.
Guaranteed Loans
• Provides a federal loan guarantee to banks on loans
made to customers intending to finance energy related
projects.
• Guaranteed loan cannot exceed 75% of total eligible
project costs.
• This Federal Assistance is intended to provide “gap”
financing for energy related projects.
– Minimum cash equity injection into the project will range
from 15% up to 25% of eligible project costs.
Lender Benefits
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Risk mitigation
Increased Profits
Increased Confidence of Banking Regulators
Increased Liquidity
Customer Benefits
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Longer Term Loan
Better Interest Rate
Improved Cash Flow
Helps to ensure a successful project.
Application Contents
• Project description
• Application forms
• Grant or guaranteed loan forms (Or both)
• Grant recipient Certifications
• Financial Information
• Quantity of financial information is dependent on the size of
the grant and/or guaranteed loan request.
• Project’s Technical Requirements
Application Contents
• Project Technical Requirements- All projects will be required to
address the following ten items within the projects technical report.
1. Qualifications of key project service providers
2. Agreements, permits, and certifications
3. Resource assessment
4. Design and engineering
5. Project development schedule
6. Project economic assessment
7. Equipment procurement
8. Equipment installation
9. Operations and maintenance
10.Dismantling and disposal of project components
Start to complete this information NOW!!
Examples
• Replacement lighting for Manufacturer County.
• Savings kWh 121976; Annual Savings $9,758; Payback of 2.5 Years
• Grain Dryer Replacement - Energy Savings
• Electric savings of 47%
• Propane savings of 37%
• Cost savings of $8,124 per year
• Small Greenhouse Application improvements included
• Thermal curtain, root zone heating and Solar window film
• 34% Energy Savings and Annual Savings of $11,143
Examples
• Wind Turbine Installation for Existing Greenhouse
– Proposed electricity production is 81,600 kWh/ year
– Energy Production as a percentage
26%
– Expected cost savings
$7,344 /yr.
• Anaerobic Digestion System - to resolve odor and runoff
problems and create a renewable energy to offset farm
electrical use and generate renewable energy sales
– Expected electrical production 6,970,000 kWh
– Return on Investment
Expected costs of $2,270,000 / Expected income of $528,000 = 4.3 yrs
Renewable Energy Feasibility Studies
• Same applicant eligibility requirements as the Renewable
energy systems requirements.
• Grant funding is capped at $50,000 or 25% of the project
whichever is less.
• Description of the Feasibility study to be conducted.
Application Time Line
• All Applications must be received by:
July 31, 2009
• Contact Randy Monhemius at 614/255-2424 or at
[email protected] to discuss the
application process.
• http://www.rurdev.usda.gov/ia/rbcs_RE-EE_grants.html