Funding Digester Projects thru USDA - Lavin

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Funding Digester Projects thru USDA - Lavin

  1. 1. Rural Development<br />Rural Business and Cooperative<br />Development Service (RBS)<br />Jim Lavin, Area Specialist<br />
  2. 2. Farm Bill Section 9007 – 7CFR 4280-B Rural Energy for America Program (REAP)<br />Grants and Guaranteed Loans for<br /> Farmers, Ranchers, and <br /> Rural Small Businesses<br />
  3. 3. What is Section 9007 ?<br />Created 2002 Farm Bill and amended by section 9001 of the 2008 Farm Bill.<br />Expands and renames the program formerly called the Renewable Energy Systems and Energy Efficiency Improvements Program.<br />Hydroelectric Source Technologies will be added as eligible.<br />Feasibility Studies have been added as an eligible purpose. <br />USDA / RD has published 4280-B program Regulation.<br />Designed to help farmers & small businesses with energy needs & projects.<br />To date, the program has provided $4,016,946 in grants and loans to 36 applicants in CT/MA/RI jurisdiction.<br />
  4. 4. Provides for grants and/or loan guarantees for renewable energy systems and energy efficiency improvements for agricultural producers and rural small businesses.<br />Program demand for Section 9006 exceeded 3 times available funds<br />Funding increased to $255 million over four years <br />Additional $100 million authorized in 5-year discretionary spending<br />
  5. 5. New Component <br />Guaranteed loan limit increased to $25 MM.<br />Federal share including loan increased to 75%. Maximum grant remains at 25%<br />Grants to complete energy audits and renewable energy development assistance<br />Eligible applicants<br />governmental<br />educational<br />electrical cooperative & public power entities <br />other similar organizations<br />
  6. 6. Purpose<br />Purchase renewable energy systems<br />(A process that <br /> produces energy)<br />Make improvements that reduce energy consumption<br />
  7. 7. Basic Technical Eligibility<br />Proposal must be for an eligible technology<br />Renewable Energy<br /> Wind<br /> Solar<br /> Geothermal<br />Biomass<br /> Hydrogen <br /> Hydroelectric <br />
  8. 8. Other Requirements<br />To qualify for funding, projects must pass:<br />Technical Review (USDA, DOE, NREL)<br />National Environmental Policy Act Review<br />
  9. 9. Biomass Projects<br />Utilize any organic material that is available on a renewable<br />or recurring basis.<br /> Include:<br /> - agricultural crops<br /> - trees grown for energy production<br /> - wood waste and wood residues<br /> - plants<br /> - residues<br /> - fibers<br /> - animal wastes, and<br /> - fats, oils and greases<br />
  10. 10. Biomass Projects(continued)<br />Bioenergy Projects(examples):<br /> - Waste-wood fired furnaces<br /> - Pellet(fuel) production<br /> - Biodiesel plants<br /> - Biorefineries<br /> - Ethanol plants<br /> - Co-firing for electric/heat generation<br />
  11. 11. Past AD Projects<br />Grant Loan kWh/yr<br />FY # Amt. Amt. Generated<br />2003 33 7,518,530 0 138,934,992<br />2004 37 9,508,946 9,830,000 133,553,644<br />2005 14 5,018,017 0 51,424,869<br />2006 11 2,915,457 1,065,850 34,970,391<br />2007 15 5,468,815 3,259,027 34,787,904<br />2008 10 10,165,952 4,981,440 55,423,731<br />Totals 121 40,595,717 19,136,317 449,095,531<br />
  12. 12. Energy Efficiency Projects<br />Improvements to a facility, building, or process that<br />reduces energy consumption, or reduces energy<br />consumed per square foot.<br /> - Compressed Air Systems<br /> - Building Envelope<br /> - Greenhouse Thermal Blankets<br /> - Lighting<br /> - Motors<br /> - Pumps<br /> - HVAC <br />
  13. 13. Projects that are NOT Eligible<br />- Residential improvements<br />- Energy efficiency improvements related to<br />new construction<br />- Agricultural tillage equipment<br />- Vehicles<br />
  14. 14. Who Is Eligible?<br />Rural Small Business<br />Agricultural producers<br />At least 50% of gross income must be from their agriculture business.<br />Must be either citizens or legally admitted.<br />Must not be debarred or have federal delinquency.<br />Applicant must be site owner & responsible for project O&M <br />
  15. 15. Demonstrated Financial Need<br />The demonstration by an applicant that the<br />applicant is unable to finance the project<br /> from its own and commercially available<br /> resources without grant assistance, or that<br /> the project proposed by the applicant<br /> cannot achieve the income and cash flows<br /> to sustain it financially over the long term<br /> without grant assistance.<br />Self-Certification for Small Projects.<br />Additional Documentation for Large Projects.<br />
  16. 16. Applicant Eligibility Cont.<br />Project must be located in rural area. To<br /> make sure your project is in an eligible area<br /> visit our website at:<br />http://www.rurdev.usda.gov/rbs/ and click<br /> on ERS – Rural Area Determinations<br />
  17. 17. What are Eligible Costs?<br />Post application purchase & installation of equipment, except agricultural tillage equipment, used equipment and vehicles.<br />Post application construction or project improvements, except residential.<br />Energy audits or assessments.<br />Permit and license fees<br />
  18. 18. Eligible Costs<br />Professional service fees, except for application preparation.<br />Feasibility studies and technical reports<br />Business plans<br />Retrofitting<br />Construction of a new facility – same purpose, same size, provides more energy savings than improving an existing facility<br />Working Capital and Land Acquisition - Eligible costs for guaranteed loans only.<br />Capital Improvements to an existing Renewable Energy System – Eligible costs for guaranteed loans only.<br />
  19. 19. Some Projects Funded in MA/CT/RI Jurisdiction<br />Dove and Boar Farm; $29,397 renewable energy grant. Purchase and installation of a 15.6 KW Grid Connected Photovoltaic system at applicant’s farm in Hampton, CT<br />S & D Farm; $49,751 renewable energy grant. Purchase and installation of a 50 KW Wind Turbine at applicant’s farm in Lisbon, CT.<br />Smith Country Cheese: $48,000 renewable energy systems grant. Purchase and installation of a 20 KW Grid Connected Photovoltaic system at applicant’s farm in Winchendon, MA. <br />
  20. 20. What Small Businesses Eligible?<br />Proposed project in a rural area.<br />Demonstrated financial need (grants only).<br />Meets the definition of a small business according to SBA (http://sba.gov/size/index.html)<br />Use the “NAICS search” option<br />A private entity including a sole proprietorship, partnership, corporation, a cooperative, and a governmental electric utility.<br />Nonprofit organizations and public entities are not eligible.<br />
  21. 21. What Projects are Eligible<br />Project must be for the purchase of a renewable energy system or energy efficiency project.<br />Pre-commercial or commercially available and replicable technology.<br />Technically feasible.<br />Located in a rural area.<br />Applicant must be owner of the system and control site for the term of the loan.<br />Adequate revenues for O&M.<br />
  22. 22. What Is Not Eligible?<br /><ul><li>Residential
  23. 23. Agricultural Tillage Equipment
  24. 24. Vehicles
  25. 25. Applicant In-Kind Contributions</li></li></ul><li>Maximum Grant Amount<br />Total Project Costs ________<br />Minus Ineligible Costs ______<br />= Total Eligible Costs ______<br /> x 25%<br />Equal Maximum Grant of ______<br />Total Eligible Costs minus Grant =<br />Matching Funds Required to be Covered by the Applicant<br />Grants cannot exceed $500,000 for renewable energy projects and $250,000 for energy efficiency projects.<br />
  26. 26. Percentage of Guarantee<br />85% Loans of $600,000 or less.<br />80% Loans greater than $600,000 but less than or equal to $5,000,000.<br />70% Loans greater than $5,000,000.<br />
  27. 27. Rates and Terms<br />Interest rate negotiated between lender and borrower. <br />Term: Real estate 30 years Equipment 20 years or useful life.<br /> Working Capital 7 years<br />
  28. 28. Fees<br />Guarantee Fee* 1% maximum<br />Renewable Fee* .5% maximum (.25% for FY 2008) on balance @ 12/31 X guaranteed portion<br />* Fees will be published annually<br />
  29. 29. Tools and Resources<br />Regulation:<br /> http://www.rurdev.usda.gov/regs/regs_toc.html<br />Outreach Materials, Technical and Environmental Guidance:<br />http://www.rurdev.usda.gov/rbs/farmbill/<br /> tools.html<br />
  30. 30. Funding Cycle<br />Annual NOSA/NOFA.<br />Anticipate early 10 issuance.<br />Nationwide competition for funds.<br />Early and final deadlines. Last year 4/15 and 6/16.<br />
  31. 31. Questions?<br />
  32. 32. Contact:Jim LavinArea SpecialistUSDA Rural Development52 Boyden RdHolden, MA 01520508-829-4477 x126james.lavin@ma.usda.gov<br />

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