Incentives aid greenhouses and nurseries in implementing energy efficiency practices

USDA Rural Development REAP application due soon!

October 12, 2018 - Author:

To help foster the implementation of energy efficiency practices, government agencies and utilities offer incentives to make them more affordable for greenhouse and nursery operations. A brief explanation of each incentive program is as follows:

USDA Rural Development Rural Energy for America Program (REAP)

REAP provides grant funding and guaranteed loan financing to agricultural producers and rural small businesses to purchase or install renewable energy systems or make energy efficiency improvements. Growers with at least 50 percent of their gross income coming from agricultural operations and small businesses in eligible rural areas can apply for REAP funding. Examples of projects that can be funded with REAP dollars include:

  • Biomass (for example: biodiesel and ethanol, anaerobic digesters, and solid fuels)
  • Geothermal for electric generation or direct use
  • Small and large wind generation
  • Small and large solar generation
  • High efficiency heating, ventilation and air conditioning systems (HVAC)
  • Insulation
  • Lighting
  • Cooling or refrigeration units
  • Doors and windows
  • Electric, solar or gravity pumps for sprinkler pivots
  • Switching from a diesel to electric irrigation motor
  • Replacement of energy-inefficient equipment

Since 2010, the Michigan agricultural industry has experienced tremendous success in securing REAP dollars due in large part to the quality of energy audits conducted by individuals certified by the Michigan Farm Energy Program. A list of these auditors can be found at http://maec.msu.edu/farmenergy/. Growers interested in applying for a REAP grant and/or low interest loan should talk to a Business Specialist at their nearest USDA Rural Development Center. REAP applications are due Oct. 31, 2018.

USDA Natural Resources Conservation Service Environmental Quality Incentives Program (EQIP) On-farm Energy Initiative

The EQIP On-Farm Energy Initiative helps growers make voluntary improvements that can boost energy efficiency around the greenhouse and nursery operation.  Financial assistance is available to inventory and analyze farm systems that use energy and identify opportunities to improve efficiency through the development of an Agricultural Energy Management Plan (AgEMP). AgEMP, or energy audit, is completed by NRCS-certified Technical Service Providers. Once an AgEMP or other qualifying energy audit has been completed, eligible growers can apply for EQIP assistance for the purchase, installation, or retrofit of certain buildings or equipment to improve energy efficiency.  Examples of items eligible for energy efficiency improvements include:

  • Lighting
  • Plate coolers
  • Ventilation and fans
  • Irrigation pumps
  • Grain dryers
  • Greenhouse improvements
  • Maple syrup evaporators
  • Heating and refrigeration units
  • Insulation and building envelope sealing
  • Motor controls and variable speed drive

Contact your local NRCS conservation planner or go here for information about the EQIP On-Farm Energy Initiative.

Utility and Electric Co-op Rebates

Utility and electric co-ops offer growers rebates to replace energy inefficient equipment. Many of the same practices approved for REAP and EQIP On-farm Energy Initiative are approved by the utility and co-op rebate programs. Obtaining rebates is a simple and low hassle process. Go here for information on rebates offered by Consumers Energy, here for information on DTE rebates, and here for information on rebates offered by electric co-ops. Utilities are highly motivated to reduce energy consumption because energy savings means they don’t have to spend money on new power generation facilities.

Impact of Energy Savings

Table 1 shows the potential impact of implementing audit-recommended energy conservation practices for various types of agricultural operations. For example, from 2010-2016 auditors certified through the Michigan Farm Energy Program conducted 35 audits on greenhouse operations across the state. Cumulatively, the audits revealed there is significant energy savings to be realized by implementing recommended energy conservation measures. Of all operation types, greenhouses saw the greatest potential reduction in kWh utilized. Other than poultry operations, greenhouses saw the greatest potential average annual savings. What the audits show is there are significant financial rewards for greenhouse operations to implement energy conservation measures.

Table 1. Summary of potential energy efficiency savings from energy audits conducted from 2010-2016.

Number of audits conducted

Type of  Operation

Savings (kWh)

% Savings

Total Annual Savings ($)

Average Payback Time (years)

Potential Average Annual Savings ($)

133

Dairy Farms

11,190,946

35

 1,214,725

2.3

         9,133

57

Grain Drying

14,302,450

28

      999,482

6.8

      17,535

35

Greenhouse

27,762,764

34

1,106,753

4.4

      31,622

27

Food/Fruit Process

2,371,934

38

      338,023

4.0

      12,519

19

Irrigation

4,433,969

51

      418,839

3.7

      22,044

12

Crops

375,529

4

         53,583

2.4

         4,465

5

Beef

69,076

14

           9,913

2.0

         1,983

4

Hogs

198,264

14

         18,002

3.3

         4,501

2

Poultry

12,618,901

62

      567,365

3.6

    283,683

36

Rural Business

13,706,260

36

      768,458

2.5

      21,346

1

Integrated Farm

11,358

94

           1,693

2.1

         1,693

3

Fish Hatcheries

2,085,817

13

         93,610

2.2

      31,203

334

Audit Total

89,127,267

34

   5,590,446

3.9

      16,738

Incentives to implement energy efficiency measures are available to all Michigan agricultural operations. Government agencies and utilities want growers and producers to take advantage of them. If you have questions about conducting an audit or applying for an incentive, feel free to contact Charles Gould at 616-994-4547 or gouldm@msu.edu.


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